4.7When CLI, When MCP

Microsoft's own guidance reduces to one question: does the agent have filesystem access?

• Agent has a filesystem (Claude Code, Cursor, CI runners): use the CLI. The disk is the context-overflow valve.
• Agent is sandboxed with no filesystem (hosted chat, some web agents): use MCP. Inline state is the only option.
• High-throughput coding agents balancing browser work with codebases, tests, and reasoning: CLI + skills, explicitly per Microsoft's positioning.

There is one honest trade-off, though: reading state from disk adds round-trips, so CLI sessions can be slower in wall-clock time than MCP streaming even while being far cheaper in tokens. Token efficiency and latency are different axes — an architect should name both.