Microsoft Foundry: Deploy Hosted Agent command is giving error "cannot create a new Capability Host with name" on VS code AI Toolkit

[karun19]

Does this occur consistently? Yes
Repro steps:

Create an hosted agent(single agent) using Microsoft Foundry: Create new Hosted Agent command on VS code
Deploy agent to foundry using Microsoft Foundry: Deploy Hosted Agent command
Action: deploy-hosted-agent
Error type: 500
Error Message: 500: There is an existing Capability Host with name: agents, provisioning state: Succeeded for workspace: 95d97546-f67e-4555-8f77-8d2cead802c0/msfoundry-poc/roshfoundry@AML/accountcaphost, cannot create a new Capability Host with name: accountcaphost for the same ClientId.

Version: 0.18.0
OS: win32
OS Arch: x64
OS Release: 10.0.26100
Product: Visual Studio Code
Product Version: 1.109.4
Language: en
UTC time: Wed, 08 Apr 2026 05:07:13 GMT

Call stack:
AIFServiceClientV2.handleResponse extension.js:164885:19
AIFServiceClientV2.createCapabilityHost extension.js:164936:21
async ProjectService.createCapabilityHostWithRetry extension.js:184793:24
async ProjectService.tryCreateCapabilityHost extension.js:184758:24
async AgentLifecycleHelper.handleCapabilityHostCreation extension.js:181077:32
async AgentLifecycleHelper.ensureCapabilityHostReady extension.js:181056:16
extension.js:181094:27extension.js:181094:27

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[huimiu]

Hi @karun19, it's a known issue, and we're planning to release a new extension version to fix it. I’ll let you know once the new version is live.

[karun19]

@huimiu Thanks for the response.
May I know the timeline?

[huimiu]

@karun19 sorry for the late reply. We’ve got a new stable version, could you please try it out to see if it works for you?