`model` field in `settings.json` is not applied on startup; sessions fall back to default `claude-sonnet-5`

[alistardust]

Describe the bug

When ~/.copilot/settings.json contains a valid, account-enabled top-level "model" value, the CLI does not apply it at startup. Sessions resolve to the built-in default claude-sonnet-5 instead. This is the same top-level model key that the in-app /model picker writes (verified by format, plain model id), so it would be expected to load on startup.

This differs from #3481 and closed #3557, which concern contextTier not being restored. Notably, #3557's description asserts "the model field is loaded correctly" — on 1.0.69 that is not the case. I have not determined when this broke, so I'm not claiming a regression, only current behavior.

Affected version

1.0.69 (macOS, Darwin arm64)

Steps to reproduce the behavior

1. Edit ~/.copilot/settings.json to include "model": "claude-opus-4.8" (matches the format the /model picker writes; I hand-edited it — I did not separately test the picker-save-then-restart path).
2. From a clean shell, run copilot (bare, no flags). Also reproduces with -p and -i.
3. Observe the resolved model via the log line Using default model: claude-sonnet-5, or assistant_usage_events in ~/.copilot/session-store.db.

Expected behavior

Session starts on claude-opus-4.8.

Actual: session starts on claude-sonnet-5.

Additional context

• copilot --model claude-opus-4.8 and COPILOT_MODEL=claude-opus-4.8 copilot both correctly run Opus, so the model is enabled/available on the account; only the settings.json path is skipped.
• Not a write race: settings.json md5/mtime are unchanged across launches.
• Reproduced under a fully sanitized environment (env -i), and in both interactive and -p modes.
• Inferred (from decompiled app.js, not confirmed at runtime): the resolver considers --model > session model > COPILOT_MODEL > settings.json model > default, and the config tier appears skipped, landing on the default claude-sonnet-5. Treat this as a hypothesis, not a verified execution path.