Filesystem server: roots are not working anymore on Windows

[fipro78]

Describe the bug
If I configure the filesystem server in VS Code mcp.json, it automatically sets the workspace folder as root. This worked in the past, but it fails now on Windows with this error (e.g. using C:\temp as workspace folder)

Skipping invalid path or inaccessible: file:///c%3A/temp
No valid root directories provided by client

To Reproduce
Steps to reproduce the behavior:

1. Create a folder C:\temp on Windows
2. Open VS Code in that folder
3. Create a .vscode/mcp.json

"servers": {
    "filesystem": {
      "type": "stdio",
      "command": "npx",
      "args": [
        "-y",
        "@modelcontextprotocol/server-filesystem@latest"
      ]
    },
  },
  "inputs": []
}

4. Start the filesystem server
5. Check the Output of the filesystem server

If you pass a folder manually via the args you will notice that this folder will be used instead of the workspace folder that should be provided as root.

Expected behavior
The workspace folder on Windows should be used as root.

Logs

2026-01-02 14:59:42.734 [info] Starting server filesystem
2026-01-02 14:59:42.735 [info] Connection state: Starting
2026-01-02 14:59:42.735 [info] Starting server from LocalProcess extension host
2026-01-02 14:59:42.747 [info] Connection state: Starting
2026-01-02 14:59:42.747 [info] Connection state: Running
2026-01-02 14:59:44.911 [warning] [server stderr] Secure MCP Filesystem Server running on stdio
2026-01-02 14:59:44.930 [info] Discovered 14 tools
2026-01-02 14:59:44.931 [warning] [server stderr] Skipping invalid path or inaccessible: file:///c%3A/temp
2026-01-02 14:59:44.932 [warning] [server stderr] No valid root directories provided by client