Python: feat(python): add as_progressive_tools() to MCPTool for progressive discovery mode

[karthik-0306]

Motivation and Context
Large production MCP servers can expose 50–200+ tools. Today, MCPTool loads and exposes every remote tool schema upfront as individual FunctionTools — injecting all of them into the model's context window on every agent turn. This causes significant token overhead, slower inference, and couples agent prompts to every remote tool shape even when most tools are never used.
This PR adds a progressive discovery mode that lets the model find and call tools on demand, instead of receiving the full tool surface upfront. Fixes #5821.

Description
Adds as_progressive_tools() to the MCPTool base class, returning exactly two FunctionTools:

list_mcp_tools(server?) — a read-only discovery tool that returns the names, descriptions, and parameter schemas of all allowed tools on the server as JSON. Set to approval_mode="never_require" since it performs no side effects.
call_mcp(server, tool, arguments?) — a dispatch tool that validates the requested tool exists in the allowed list, then routes execution through the existing FunctionTool.invoke() path. This preserves all SDK-owned behavior: OTel propagation, isError handling, MCP result parsing, connection retry, and approval middleware.

The method is placed on MCPTool (not just MCPStreamableHTTPTool) because the logic — reading self.functions and routing through invoke() — is fully transport-agnostic. This means MCPStdioTool, MCPStreamableHTTPTool, and MCPWebsocketTool all get progressive mode automatically.

Usage:

Before: exposes all remote tool schemas upfront
agent = Agent(..., tools=[*mcp.functions])

After: model discovers and calls tools on demand
agent = Agent(..., tools=[*mcp.as_progressive_tools()])
10 new unit tests added covering: return shape, custom names, discovery filtering, dispatch routing, argument defaulting, server validation, allowed-tool enforcement, and error propagation.

Contribution Checklist

• The code builds clean without any errors or warnings
• The PR follows the Contribution Guidelines
• All unit tests pass, and I have added new tests where possible
• Is this a breaking change? No — as_progressive_tools() is a purely additive method. No existing interfaces are modified.

[karthik-0306]

@karthik-0306 please read the following Contributor License Agreement(CLA). If you agree with the CLA, please reply with the following information.

@microsoft-github-policy-service agree [company="{your company}"]

Options:

• (default - no company specified) I have sole ownership of intellectual property rights to my Submissions and I am not making Submissions in the course of work for my employer.

@microsoft-github-policy-service agree

• (when company given) I am making Submissions in the course of work for my employer (or my employer has intellectual property rights in my Submissions by contract or applicable law). I have permission from my employer to make Submissions and enter into this Agreement on behalf of my employer. By signing below, the defined term “You” includes me and my employer.

@microsoft-github-policy-service agree company="Microsoft"

Contributor License Agreement

Contribution License Agreement

This Contribution License Agreement (“Agreement”) is agreed to by the party signing below (“You”), and conveys certain license rights to Microsoft Corporation and its affiliates (“Microsoft”) for Your contributions to Microsoft open source projects. This Agreement is effective as of the latest signature date below.

1. Definitions.
   “Code” means the computer software code, whether in human-readable or machine-executable form,
   that is delivered by You to Microsoft under this Agreement.
   “Project” means any of the projects owned or managed by Microsoft and offered under a license
   approved by the Open Source Initiative (www.opensource.org).
   “Submit” is the act of uploading, submitting, transmitting, or distributing code or other content to any
   Project, including but not limited to communication on electronic mailing lists, source code control
   systems, and issue tracking systems that are managed by, or on behalf of, the Project for the purpose of
   discussing and improving that Project, but excluding communication that is conspicuously marked or
   otherwise designated in writing by You as “Not a Submission.”
   “Submission” means the Code and any other copyrightable material Submitted by You, including any
   associated comments and documentation.
2. Your Submission. You must agree to the terms of this Agreement before making a Submission to any
   Project. This Agreement covers any and all Submissions that You, now or in the future (except as
   described in Section 4 below), Submit to any Project.
3. Originality of Work. You represent that each of Your Submissions is entirely Your original work.
   Should You wish to Submit materials that are not Your original work, You may Submit them separately
   to the Project if You (a) retain all copyright and license information that was in the materials as You
   received them, (b) in the description accompanying Your Submission, include the phrase “Submission
   containing materials of a third party:” followed by the names of the third party and any licenses or other
   restrictions of which You are aware, and (c) follow any other instructions in the Project’s written
   guidelines concerning Submissions.
4. Your Employer. References to “employer” in this Agreement include Your employer or anyone else
   for whom You are acting in making Your Submission, e.g. as a contractor, vendor, or agent. If Your
   Submission is made in the course of Your work for an employer or Your employer has intellectual
   property rights in Your Submission by contract or applicable law, You must secure permission from Your
   employer to make the Submission before signing this Agreement. In that case, the term “You” in this
   Agreement will refer to You and the employer collectively. If You change employers in the future and
   desire to Submit additional Submissions for the new employer, then You agree to sign a new Agreement
   and secure permission from the new employer before Submitting those Submissions.
5. Licenses.

• Copyright License. You grant Microsoft, and those who receive the Submission directly or
  indirectly from Microsoft, a perpetual, worldwide, non-exclusive, royalty-free, irrevocable license in the
  Submission to reproduce, prepare derivative works of, publicly display, publicly perform, and distribute
  the Submission and such derivative works, and to sublicense any or all of the foregoing rights to third
  parties.
• Patent License. You grant Microsoft, and those who receive the Submission directly or
  indirectly from Microsoft, a perpetual, worldwide, non-exclusive, royalty-free, irrevocable license under
  Your patent claims that are necessarily infringed by the Submission or the combination of the
  Submission with the Project to which it was Submitted to make, have made, use, offer to sell, sell and
  import or otherwise dispose of the Submission alone or with the Project.
• Other Rights Reserved. Each party reserves all rights not expressly granted in this Agreement.
  No additional licenses or rights whatsoever (including, without limitation, any implied licenses) are
  granted by implication, exhaustion, estoppel or otherwise.

6. Representations and Warranties. You represent that You are legally entitled to grant the above
   licenses. You represent that each of Your Submissions is entirely Your original work (except as You may
   have disclosed under Section 3). You represent that You have secured permission from Your employer to
   make the Submission in cases where Your Submission is made in the course of Your work for Your
   employer or Your employer has intellectual property rights in Your Submission by contract or applicable
   law. If You are signing this Agreement on behalf of Your employer, You represent and warrant that You
   have the necessary authority to bind the listed employer to the obligations contained in this Agreement.
   You are not expected to provide support for Your Submission, unless You choose to do so. UNLESS
   REQUIRED BY APPLICABLE LAW OR AGREED TO IN WRITING, AND EXCEPT FOR THE WARRANTIES
   EXPRESSLY STATED IN SECTIONS 3, 4, AND 6, THE SUBMISSION PROVIDED UNDER THIS AGREEMENT IS
   PROVIDED WITHOUT WARRANTY OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF
   NONINFRINGEMENT, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.
7. Notice to Microsoft. You agree to notify Microsoft in writing of any facts or circumstances of which
   You later become aware that would make Your representations in this Agreement inaccurate in any
   respect.
8. Information about Submissions. You agree that contributions to Projects and information about
   contributions may be maintained indefinitely and disclosed publicly, including Your name and other
   information that You submit with Your Submission.
9. Governing Law/Jurisdiction. This Agreement is governed by the laws of the State of Washington, and
   the parties consent to exclusive jurisdiction and venue in the federal courts sitting in King County,
   Washington, unless no federal subject matter jurisdiction exists, in which case the parties consent to
   exclusive jurisdiction and venue in the Superior Court of King County, Washington. The parties waive all
   defenses of lack of personal jurisdiction and forum non-conveniens.
10. Entire Agreement/Assignment. This Agreement is the entire agreement between the parties, and
    supersedes any and all prior agreements, understandings or communications, written or oral, between
    the parties relating to the subject matter hereof. This Agreement may be assigned by Microsoft.

@microsoft-github-policy-service agree

[Copilot]

Pull request overview

Adds a “progressive discovery” exposure mode for Python MCP servers so agents can discover MCP tools on-demand (via a small stable tool surface) instead of injecting all remote tool schemas into the model context up front—targeting large MCP servers and reducing token overhead.

Changes:

• Added MCPTool.as_progressive_tools() to expose two FunctionTools: a discovery tool (list_mcp_tools) and a dispatcher (call_mcp).
• Added unit tests validating the progressive tools’ basic shape, naming customization, server filtering, dispatch routing, and error propagation.

Reviewed changes

Copilot reviewed 2 out of 2 changed files in this pull request and generated 3 comments.

File	Description
python/packages/core/agent_framework/_mcp.py	Adds as_progressive_tools() with discovery + dispatch FunctionTools backed by the MCPTool’s loaded functions.
python/packages/core/tests/core/test_mcp.py	Adds tests for progressive discovery/dispatch behavior.

[Copilot]

Pull request overview

Copilot reviewed 2 out of 2 changed files in this pull request and generated 2 comments.

[Copilot]

Pull request overview

Copilot reviewed 2 out of 2 changed files in this pull request and generated 2 comments.

[Copilot]

Copilot encountered an error and was unable to review this pull request. You can try again by re-requesting a review.

[Copilot]

Copilot encountered an error and was unable to review this pull request. You can try again by re-requesting a review.

[Copilot]

Copilot encountered an error and was unable to review this pull request. You can try again by re-requesting a review.

[Copilot]

Pull request overview

Copilot reviewed 2 out of 2 changed files in this pull request and generated 1 comment.

[Copilot]

Pull request overview

Copilot reviewed 2 out of 2 changed files in this pull request and generated no new comments.