[bug] squad-cli cannot access tools due to Copilot CLI (post-v1.0.54) permission contract change #1191

What happened

Squad's CLI (and SDK) are no longer able to grant tool access when the environment has Copilot CLI v1.0.54 or newer. Any permission requests handled by the default handler (for tool use, shell, etc.) are not approved, blocking core functionality.

Why

• The contract changed the expected onPermissionRequest handler return values as of Copilot CLI 1.0.54 and above.
• Instead of { kind: 'approved' }, the SDK now expects { kind: 'approve-once' } or another allowed value (see: references below)
• The current approveAllPermissions handler in packages/squad-cli/src/cli/shell/index.ts and other code paths still return { kind: 'approved' }.
• Type definitions (e.g., SquadPermissionRequestResult.kind) and documented guidance also reference approved and other outdated strings.
• The Copilot CLI (post-v1.0.54) ignores these permission responses, so the squad CLI can't approve any tools.

References:

• Copilot SDK permission handler docs
• Code search: approveAllPermissions handler