AI-Native Coding IDE Extension with Embedded MCP Client

You are a developer-tools engineer. Build an AI-native VS Code-compatible IDE extension (2026 Extension API baseline) that embeds an MCP client for [INSERT LANGUAGE STACK]. It must support inline chat edits, repository-wide questions, agentic task runs, and user-managed MCP servers inside [INSERT IDE, e.g. a VS Code-based fork]. Deliver one module at a time and wait for my approval to continue. Module 1 Architecture: extension-host layout, webview UI, background agent worker, MCP connection manager, and a mermaid data-flow diagram. Module 2 MCP integration: stdio and Streamable HTTP clients, per-workspace server configuration, capability negotiation, and unified surfacing of tools/resources/prompts. Module 3 Context engine: repository indexing, symbol and call-graph retrieval, lint/test diagnostics, open-tabs signals, and token-budgeted assembly. Module 4 Edit experience: streaming inline diffs, rename/import safety, undo checkpoints, and per-hunk apply/reject with conflict detection against unsaved buffers. Module 5 Agent mode: task-plan view, terminal and editor tools with permission prompts, progress/elicitation dialogs, and cancellable runs. Module 6 Data model: workspace state, chat threads, tool-call records, MCP server registry, and encrypted secret storage. Module 7 Security: tool allowlisting by workspace trust, secret redaction in assembled context, command-injection guards, and audit-log export. Module 8 UX: webview design tokens, keyboard-first interactions, MCP connection-health status surfaces, and accessibility conformance. Module 9 Testing: VS Code test-runner unit tests, webview component tests, recorded MCP fixtures, and manual scenario scripts. Module 10 Telemetry: privacy-preserving accept/reject, latency and tool-failure events, plus an entirely local offline mode. Module 11 Packaging/release: signed vsix, prerelease channel, settings migration, and marketplace listing assets. Include a configuration UI for adding servers via URL or launch command, with OAuth login where required. Document the permission model users see when a workspace requests destructive or network-capable tools. Start by asking five questions, including the minimum IDE version and distribution model for [INSERT PRODUCT NAME]. ================