Folder named agents.md in a parent directory blocks all instructions (EISDIR): "Instruction initialization blocked by unavailable sources: core/instructions" #52301

Description

When a parent directory of the project contains a folder named agents.md (in my case a git clone of a repository called agents.md), every prompt in that project fails with:

Session failed: Instruction initialization blocked by unavailable sources: core/instructions

V2 searches for AGENTS.md from the project up to $HOME (#41633). On macOS's case-insensitive file system, the lookup for ~/code/org/AGENTS.md matches the folder ~/code/org/agents.md/. Reading it fails with EISDIR, and that single failure blocks every instruction source, so the session cannot run.

Expected: Paths that aren't regular files are skipped, and the session runs normally.

Actual: Every prompt fails. Log:

level=WARN message="failed to load instruction source" source=project
  cause=FileSystem.readFile (/Users/…/code/xxx/agents.md) EISDIR: illegal operation on a directory
level=ERROR message="Failed to drain Session"
  cause="Instructions.InitializationBlocked: Instruction initialization blocked by unavailable sources: core/instructions"

Additional findings:

• After moving the folder away, sessions keep failing until opencode service restart. The failed source is cached in the running service and not retried (no new "failed to load instruction source" line is logged).
• Worked in V1, which didn't search above the project root.

Suggested fix:

1. During AGENTS.md discovery, skip paths that aren't regular files (similar to the EISDIR handling in readFileStringSafe does not catch EISDIR - TUI crashes on every launch with Unexpected server error (exit 133 / SIGTRAP) #32205).
2. Don't let one failing instruction source block all instructions.
3. Retry failed sources instead of caching the failure until the service restarts.

Plugins

No response

OpenCode version

opencode v2.0.20

Steps to reproduce

1. On macOS (case-insensitive file system), create a folder ~/code/org/agents.md/. In my case it's a git clone of a repository named agents.md; an empty folder should do.
2. Start OpenCode in a sibling project, e.g. ~/code/org/some-repo.
3. Send any prompt, and it fails with "Instruction initialization blocked by unavailable sources: core/instructions".
4. Remove or move ~/code/org/agents.md/ and send another prompt. It still fails.
5. Run opencode service restart and send another prompt. It now works.

Screenshot and/or share link

Operating System

MacOS

Terminal

Ghostty