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 },

client/src/lib/hooks/useConnection.ts

@@ -400,11 +400,25 @@ export function useConnection({
       // Use custom headers (migration is handled in App.tsx)
       let finalHeaders: CustomHeaders = customHeaders || [];
 
-      // Add OAuth token if available and no custom headers are set
+      // Check if we need to inject OAuth token
-      if (finalHeaders.length === 0) {
+      // This handles both empty headers and default "Bearer " placeholder headers
+      const isEmptyAuthHeader = (header: CustomHeaders[number]) =>
+        header.name.trim().toLowerCase() === "authorization" &&
+        header.value.trim() === "Bearer";
+
+      const needsOAuthToken =
+        finalHeaders.length === 0 ||
+        finalHeaders.some(
+          (header) => header.enabled && isEmptyAuthHeader(header),
+        );
+
+      if (needsOAuthToken) {
         const oauthToken = (await serverAuthProvider.tokens())?.access_token;
         if (oauthToken) {
+          // Add the OAuth token
           finalHeaders = [
+            // Remove any existing Authorization headers with empty tokens
+            ...finalHeaders.filter((header) => !isEmptyAuthHeader(header)),
             {
               name: "Authorization",
               value: `Bearer ${oauthToken}`,