@@ -280,9 +280,22 @@ function normalizeMcp(input: Record<string, unknown>, encoded: Record<string, un
           normalizeMcpTimeout(value, timeout, path, diagnostics)
           return
         }
-        const server = decodeValue(ConfigMCPV1.Info, value, path, diagnostics)
-        if (server !== undefined)
+        // Try V1 first with a temp diagnostics array so a V1 failure doesn't
+        // pollute diagnostics when the V2 fallback succeeds.
+        const v1Diag: Diagnostic[] = []
+        const server = decodeValue(ConfigMCPV1.Info, value, path, v1Diag)
+        if (server !== undefined) {
           setOwn(legacyServers, name, canonical(ConfigMCP.Server, ConfigMigrateV1.migrateMcp(server)))
+          return
+        }
+        // V2-only shape (e.g. disabled/timeout-object) — V1 decode failed, try V2
+        const v2Server = decodeValue(ConfigMCP.Server, value, path, diagnostics)
+        if (v2Server !== undefined) {
+          setOwn(nativeServers, name, v2Server)
+          return
+        }
+        // Both failed — surface the V1 diagnostic (more actionable for legacy users)
+        diagnostics.push(...v1Diag)
       })
     }
   }
 
@@ -445,6 +445,29 @@ describe("ConfigNormalize", () => {
     expect(unknown.diagnostics.map((item) => [item.kind, item.path])).toEqual([["invalid", ["mcp", "timeout"]]])
   })
 
+  test("accepts V2-only server shape defined directly under mcp (not under mcp.servers)", () => {
+    // timeout as object is V2-only; V1 expects a PositiveInt and fails, triggering V2 fallback
+    const result = normalized({
+      mcp: {
+        "my-server": { type: "local", command: ["run"], timeout: { catalog: 6000 } },
+      },
+    })
+    expect((result.encoded.mcp as { servers: Record<string, unknown> }).servers).toEqual({
+      "my-server": { type: "local", command: ["run"], timeout: { catalog: 6000 } },
+    })
+    expect(result.diagnostics).toEqual([])
+  })
+
+  test("still rejects truly invalid server shapes under mcp", () => {
+    const result = normalized({
+      mcp: {
+        "bad-server": { unknownField: true },
+      },
+    })
+    expect(result.encoded.mcp).toBeUndefined()
+    expect(result.diagnostics.some((item) => item.kind === "invalid" && item.path.join(".").startsWith("mcp.bad-server"))).toBe(true)
+  })
+
   test("merges bounded compaction leaves and omits unsupported leaves", () => {
     const result = normalized({
       compaction: {