docs(telemetry): disclose telemetry.enabled dependency on propagateTraceContext

Self-review pass on R4 commit 9bdd3bd6f flagged one footgun: both
`docs/developers/development/telemetry.md` and the settingsSchema.ts
description for `outboundCorrelation.propagateTraceContext` describe
the toggle's behavior without noting that the flag is a silent no-op
when `telemetry.enabled` is false. An operator who sets only
`outboundCorrelation.propagateTraceContext: true` and forgets the
telemetry switch gets zero behavior change — no error, no warning, no
traceparent.

Fix: add the dependency disclosure to both surfaces, plus a JSON
example showing both flags wired together for the ARMS+DashScope
cross-process trace continuation use case.

Also fix a minor comment accuracy nit at `sdk.test.ts:683`: said the
SDK installs `W3CTraceContextPropagator` instance when opt-in is true,
but the actual default is `CompositePropagator(W3CTraceContextPropagator
+ W3CBaggagePropagator)` per `@opentelemetry/sdk-node` source.

Vscode-ide-companion settings.schema.json regenerated to reflect the
expanded description string.

🤖 Generated with [Qwen Code](https://github.com/QwenLM/qwen-code)

docs/developers/development/telemetry.md

@@ -327,6 +327,24 @@ for cross-process trace stitching — e.g. ARMS Tracing serving DashScope.
 For most operators the value is `false`; cross-vendor trace continuation
 is niche.
 
+**Depends on `telemetry.enabled: true`.** The OTel SDK only initializes
+when telemetry is enabled, so `propagateTraceContext` only takes effect
+in that state. Setting it to `true` while telemetry is disabled is a
+silent no-op — no SDK, no propagator, no `traceparent` on the wire.
+Verify both flags when wiring an ARMS+DashScope correlation setup:
+
+```jsonc
+{
+  "telemetry": {
+    "enabled": true,
+    "otlpTracesEndpoint": "http://tracing-analysis-...",
+  },
+  "outboundCorrelation": {
+    "propagateTraceContext": true,
+  },
+}
+```
+
 ### Other outbound correlation headers
 
 `X-Qwen-Code-Session-Id` and `X-Qwen-Code-Request-Id` are **not part of

packages/cli/src/config/settingsSchema.ts

@@ -1052,7 +1052,7 @@ const SETTINGS_SCHEMA = {
       properties: {
         propagateTraceContext: {
           description:
-            "Inject W3C `traceparent` header on outbound `fetch` requests (LLM SDK calls, MCP StreamableHTTP, WebFetch, ...). Default: false — trace context stays internal to the operator's OTLP collector and is NOT written onto third-party request streams. Set true only when you want cross-process trace stitching with an OTel-aware LLM provider (e.g. ARMS+DashScope). Note: client HTTP spans are still emitted in either case; this flag only governs the wire `traceparent` header.",
+            "Inject W3C `traceparent` header on outbound `fetch` requests (LLM SDK calls, MCP StreamableHTTP, WebFetch, ...). Default: false — trace context stays internal to the operator's OTLP collector and is NOT written onto third-party request streams. Set true only when you want cross-process trace stitching with an OTel-aware LLM provider (e.g. ARMS+DashScope). Note: client HTTP spans are still emitted in either case; this flag only governs the wire `traceparent` header. Depends on `telemetry.enabled: true` — the OTel SDK only initializes when telemetry is enabled, so this flag is a silent no-op without it.",
           type: 'boolean',
           default: false,
         },

packages/core/src/telemetry/sdk.test.ts

@@ -677,9 +677,10 @@ describe('Telemetry SDK', () => {
       ).mockReturnValue(true);
       initializeTelemetry(mockConfig);
       // textMapPropagator is omitted from NodeSDK options → SDK installs
-      // its default W3C composite propagator. Test asserts the absence
-      // because the actual W3CTraceContextPropagator instance is created
-      // inside @opentelemetry/sdk-node which is auto-mocked here.
+      // its default `CompositePropagator` (W3CTraceContextPropagator +
+      // W3CBaggagePropagator). Test asserts the absence at the constructor
+      // boundary because the default composite is constructed inside
+      // @opentelemetry/sdk-node, which is auto-mocked here.
       expect(getTextMapPropagator()).toBeUndefined();
     });
   });

packages/vscode-ide-companion/schemas/settings.schema.json

@@ -444,7 +444,7 @@
       "type": "object",
       "properties": {
         "propagateTraceContext": {
-          "description": "Inject W3C `traceparent` header on outbound `fetch` requests (LLM SDK calls, MCP StreamableHTTP, WebFetch, ...). Default: false — trace context stays internal to the operator's OTLP collector and is NOT written onto third-party request streams. Set true only when you want cross-process trace stitching with an OTel-aware LLM provider (e.g. ARMS+DashScope). Note: client HTTP spans are still emitted in either case; this flag only governs the wire `traceparent` header.",
+          "description": "Inject W3C `traceparent` header on outbound `fetch` requests (LLM SDK calls, MCP StreamableHTTP, WebFetch, ...). Default: false — trace context stays internal to the operator's OTLP collector and is NOT written onto third-party request streams. Set true only when you want cross-process trace stitching with an OTel-aware LLM provider (e.g. ARMS+DashScope). Note: client HTTP spans are still emitted in either case; this flag only governs the wire `traceparent` header. Depends on `telemetry.enabled: true` — the OTel SDK only initializes when telemetry is enabled, so this flag is a silent no-op without it.",
           "type": "boolean",
           "default": false
         }