Add KNOWN-ISSUES.md for Azure MCP Server

[anuchandy]

What does this PR do?

Add a known issues document to track limitations in the Azure MCP Server. The first entry documents tools that do not work with the UseOnBehalfOf authentication strategy due to missing delegated permission scopes in downstream Azure service APIs (monitor, communication, confidentialledger).

Link KNOWN-ISSUES.md from the Feedback and Support section in README.md.

[Any additional context, screenshots, or information that helps reviewers]

GitHub issue number?

[Link to the GitHub issue this PR addresses]

Pre-merge Checklist

• Required for All PRs
  • Read contribution guidelines
  • PR title clearly describes the change
  • Commit history is clean with descriptive messages (cleanup guide)
  • Added comprehensive tests for new/modified functionality
  • Updated servers/Azure.Mcp.Server/CHANGELOG.md and/or servers/Fabric.Mcp.Server/CHANGELOG.md for product changes (features, bug fixes, UI/UX, updated dependencies)
• For MCP tool changes:
  • One tool per PR: This PR adds or modifies only one MCP tool for faster review cycles
  • Updated servers/Azure.Mcp.Server/README.md and/or servers/Fabric.Mcp.Server/README.md documentation
  • Validate README.md changes using script at eng/scripts/Process-PackageReadMe.ps1. See Package README
  • Updated command list in /servers/Azure.Mcp.Server/docs/azmcp-commands.md and/or /docs/fabric-commands.md
  • Run .\eng\scripts\Update-AzCommandsMetadata.ps1 to update tool metadata in azmcp-commands.md (required for CI)
  • For new or modified tool descriptions, ran ToolDescriptionEvaluator and obtained a score of 0.4 or more and a top 3 ranking for all related test prompts
  • For tools with new names, including new tools or renamed tools, update consolidated-tools.json
  • For new tools associated with Azure services or publicly available tools/APIs/products, add URL to documentation in the PR description
• Extra steps for Azure MCP Server tool changes:
  • Updated test prompts in /servers/Azure.Mcp.Server/docs/e2eTestPrompts.md
  • 👉 For Community (non-Microsoft team member) PRs:
    • Security review: Reviewed code for security vulnerabilities, malicious code, or suspicious activities before running tests (crypto mining, spam, data exfiltration, etc.)
    • Manual tests run: added comment /azp run mcp - pullrequest - live to run Live Test Pipeline

[Copilot]

Pull request overview

Adds a first-class “Known Issues” document for Azure MCP Server and links it from the README so users can discover current limitations (notably OBO auth limitations) more easily.

Changes:

• Add KNOWN-ISSUES.md documenting OBO (UseOnBehalfOf) limitations for specific namespaces/tools and a workaround (UseHostingEnvironmentIdentity).
• Link the new Known Issues doc from the “Feedback and Support” section of servers/Azure.Mcp.Server/README.md.

Reviewed changes

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

File	Description
servers/Azure.Mcp.Server/README.md	Adds a “Known Issues” link under Feedback and Support.
servers/Azure.Mcp.Server/KNOWN-ISSUES.md	New documentation describing OBO unsupported tools and workaround guidance.

[joshfree]

Overall the doc is too dense for end-users.

Please rewrite it to be much simpler so that it can be explained in 1-sentence. E.g.,

"The following 3 tools are not supported in HTTP mode:"

[joshfree]

Here's closer to how I'd imagine our Known issues page would be:

https://support.google.com/chrome/a/answer/9813310?hl=en

mostly a table of contents with 1-sentence issues, followed by Option 1,2,3.. and then more-details of the issue. The more-details can be in separate markdown files that we link to so as to not clutter the page even.

[anuchandy]

Thanks @joshfree for the offline brainstorming on making this more concise! I tried to take inspiration from the Chrome issue page you shared, along with the collapsible sections.

Collapsed view:

Expanded view:

I think we can avoid creating a separate linked document for OBO just for this, since we already have a work item for documenting authentication (OBO and hosting environments) in Azure MCP Server - we can link it here once it's ready. I'm fine with even removing that one-liner about "why doesn't OBO work?" if it feels like noise, but it could be a nice quick reference for someone wondering.

[joshfree]

That looks very professional. Great work