Microsoft Copilot Studio Agents: “Actions” Is Now “Tools,” MCP Has Been GA for Over a Year, and Org-Wide Publishing Requires Admin Approval

Microsoft Copilot Studio is one product with two licensing tiers — and the Agent Registry approval step that makes an agent visible org-wide is the step most publishing tutorials end one screen before. This post maps the complete authoring surface: all eight knowledge source types with their verified limits, the "Actions" to "Tools" terminology rename and what changed, MCP integration confirmed GA since May 2025 with the federated-connector distinction explained, and the five-step publishing path to Microsoft 365 Copilot including the admin center approval step makers most often miss.

Declarative Agents vs. Custom Engine Agents: One Needs a Copilot License, One Doesn’t — and Copilot Studio Builds Both

Declarative agents run on Microsoft's orchestrator and require a Microsoft 365 Copilot license for every user — but cost nothing to host. Custom engine agents require you to supply the orchestration layer and pay for hosting — but your users need no Copilot license at all. This post explains the architectural split behind that licensing inversion, shows how to read either agent type from the app manifest, resolves the Copilot Studio taxonomy confusion (Agent Builder always produces declarative agents; the full platform can produce either), and provides a verified decision framework — including three binary differentiators and an eight-question pre-commit checklist — sourced from the official Microsoft 365 extensibility documentation updated August 2026.