Windows sandbox:  git status  fails with working-directory permission denied despite allowed paths

Empieza reproduciendo la sesión de Windows CLI en un repositorio de la unidad D: y ejecuta el comando git -C "D:<repo>" status --short --branch indicado. Compara el directorio de trabajo heredado, los cambios en los permisos del sandbox dentro de la misma sesión frente a los realizados después de reiniciar, y el acceso a %LOCALAPPDATA%\agency\logs. Se considera terminado cuando se haya identificado la causa y los mensajes de denegación o el comportamiento de la configuración hagan explícitos la ruta requerida y el estado de reinicio.

Describe the bug

Copilot CLI continues to encounter filesystem access denials after I updated sandbox settings to allow access, including  C:\Users\vineset . The effective policy has not been verified, so this may be a sandbox policy-application or process working-directory issue.

Environment: Windows; Copilot CLI  1.0.81-1 .

Steps to reproduce:

1. Open a CLI session in a Git repository on the D: drive.
2. Configure sandbox read/write permissions to allow the required paths.
3. Ask the agent to run  git -C "D:<repo>" status --short --branch .
4. Update the sandbox permissions and retry in the same session.

Expected: Git reads the allowed repository and returns its status.

Actual: Every attempt fails with exit code 128:

fatal: Unable to read current working directory: Permission denied

Supporting observations:

• PowerShell successfully listed the repository and confirmed that  .git  exists.
• An earlier process-launch error reported  C:\  as its working directory, although the session was configured for the repository on D:.
• Plugin management also failed to initialize logging because access to a file under  %LOCALAPPDATA%\agency\logs  was denied.
• The Git error does not identify the blocked path, making it difficult to determine which permission is missing.

Impact: Unable to run even read-only Git status operations; repository updates and plugin management are also blocked.

Please investigate: Whether tool processes inherit the correct working directory, whether sandbox setting changes reach subsequent processes in the current session, and whether an additional restriction overrides the configured allowed paths. If a restart is required, please make that explicit in the settings UI. Denial messages should identify the affected path and policy rule.

Uncertainty: The exact root cause is not established, and reproduction after a full CLI restart has not been confirmed.

Affected version

No response

Steps to reproduce the behavior

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Expected behavior

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Additional context

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