squad init (at any state backend) unconditionally writes squad_state_<hash> to ~/.copilot/mcp-config.json via ensureSquadStateMcpInUserConfig (packages/squad-cli/src/cli/core/init.ts:408). One entry per project accumulates in HOME with no GC.

This contradicts the explicit iter-8 design intent documented at packages/squad-cli/src/cli/core/mcp-root.ts:1-27:

iter-7: wrote squad_state_<hash> into the user's HOME ~/.copilot/mcp-config.json. That polluted HOME with one entry per Squad project and required a stale-entry GC that we never built. It also touched a file outside the project, which is surprising for squad init / squad upgrade.

iter-8 flips it back inside the project: we write squad_state to a repo-root .mcp.json ... No HOME modifications.

But init.ts:408 then turns around and modifies HOME anyway. The accompanying comment // Also pin to user-level config for external 'copilot -p' compatibility claims this is for copilot -p mode, but copilot -p reads .mcp.json from the cwd too — the repo-root write at line 403 is already sufficient for that case.

Repro

`powershell
mkdir C:\temp\squad-home-pollution-repro; cd C:\temp\squad-home-pollution-repro; git init
squad init
(Get-Content ~/.copilot/mcp-config.json -Raw | ConvertFrom-Json).mcpServers.PSObject.Properties.Name | Where-Object { -match '^squad_state_' }

→ squad_state_ ← polluted

`

Impact

• Each new squad init adds another squad_state_<hash> entry; stale entries point at deleted/moved projects
• The keys are opaque hashes, so users have no obvious way to clean them
• squad upgrade (upgrade.ts:738) ALSO calls ensureSquadStateMcpInUserConfig, amplifying the problem
• Defeats the iter-8 goal of "init/upgrade should not modify HOME"

Fix

Remove the two ensureSquadStateMcpInUserConfig calls (init.ts:408 and upgrade.ts:738). The repo-root .mcp.json writes (line 403 / line 728) cover all documented Copilot CLI launch modes including copilot -p from the project root.

For users who do invoke copilot -p from somewhere other than the project root, the right fix is to teach them --additional-mcp-config @.mcp.json (which init.ts:494 already documents as the recommended pattern).

Cleanup helper

A follow-up could add squad doctor --mcp-prune to walk ~/.copilot/mcp-config.json, find squad_state_<hash> entries whose target directory no longer exists, and remove them.

cc: discovered in the v0.10 stabilization weekend session.