Merge ~/.copilot with <current-working-directory>/.copilot settings

[Tiberriver256]

Describe the feature or problem you'd like to solve

I have a lot of code repositories. The optimal set of MCP servers and configuration changes depending on what repo I'm in. Distributing that to other team members is easy if I can check it into my code.

Proposed solution

Support for a <current-working-directory>/.copilot folder, which can house the same settings as the global/user settings. Repo/local settings merge with global settings and override (since they are more specific) if there is a collision.

Look to how VSCode implements their prompts/instructions/settings/mcp.json/etc. for a great example.

[peterbecich]

I believe an additional way to accomplish this goal is: #146
VS Code already supports project-local configs including PROJECT/.vscode/mcp.json

The use-case of this issue #31 is not explicitly mentioned in that issue, I think.

[examon]

This is now supported. You can check project-level settings into .github/copilot/settings.json, which merges with your global config for a supported subset of repo-level settings. For MCP servers specifically, .mcp.json or .vscode/mcp.json in your project directory are loaded and merged with global MCP config automatically. The path convention differs from the originally proposed <cwd>/.copilot but achieves the same per-repo configuration goal. If you believe this isn't fully resolved, please feel free to reopen this issue.