fix: enhance OAuth token handling in useConnection hook to prevent infinite auth loops

client/src/lib/hooks/__tests__/useConnection.test.tsx

@@ -913,6 +913,35 @@ describe("useConnection", () => {
       expect(headers).toHaveProperty("Authorization", "Bearer mock-token");
     });
 
+    test("replaces empty Bearer token placeholder with OAuth token", async () => {
+      // This test prevents regression of the bug where default "Bearer " header
+      // prevented OAuth token injection, causing infinite auth loops
+      const customHeaders: CustomHeaders = [
+        {
+          name: "Authorization",
+          value: "Bearer ", // Empty Bearer token placeholder
+          enabled: true,
+        },
+      ];
+
+      const propsWithEmptyBearer = {
+        ...defaultProps,
+        customHeaders,
+      };
+
+      const { result } = renderHook(() => useConnection(propsWithEmptyBearer));
+
+      await act(async () => {
+        await result.current.connect();
+      });
+
+      const headers = mockSSETransport.options?.requestInit?.headers;
+      // Should replace the empty "Bearer " with actual OAuth token
+      expect(headers).toHaveProperty("Authorization", "Bearer mock-token");
+      // Should not have the x-custom-auth-headers since Authorization is standard
+      expect(headers).not.toHaveProperty("x-custom-auth-headers");
+    });
+
     test("prioritizes custom headers over legacy auth", async () => {
       const customHeaders: CustomHeaders = [
         { name: "Authorization", value: "Bearer custom-token", enabled: true },