[BUG] Context variable references in agent prompts cause errors

[dobesv]

📋 Prerequisites

• I have searched the existing issues to avoid creating a duplicate
• By submitting this issue, you agree to follow our Code of Conduct
• I am using the latest version of the software
• I have tried to clear cache/cookies or used incognito mode (if ui-related)
• I can consistently reproduce this issue

🎯 Affected Service(s)

App Service

🚦 Impact/Severity

Minor inconvenience

🐛 Bug Description

If you write some text like {repo} in your agent prompt you can get an error like:

2026-02-25 19:56:39,014 - kagent_adk.kagent.adk._agent_executor - ERROR - Error handling A2A request: 'Context variable not found: repo.'
  File "/.kagent/.venv/lib/python3.13/site-packages/google/adk/utils/instructions_utils.py", line 131, in _replace_match
    raise KeyError(f'Context variable not found: {var_name}.')
KeyError: 'Context variable not found: repo.'

I don't think there's any practical way to set these context variables in kagent, so this ADK feature should probably be disabled or the {}'s should be automatically escaped.

🔄 Steps To Reproduce

1. Create an agent with a prompt with {repo} or similar in it
2. Try to use it

🤔 Expected Behavior

Does not try to process {...}

📱 Actual Behavior

Error

💻 Environment

No response

🔧 CLI Bug Report

No response

🔍 Additional Context

No response

📋 Logs

📷 Screenshots

No response

🙋 Are you willing to contribute?

• I am willing to submit a PR to fix this issue

[Daniel-Vaz]

+1 for me on this one.
Faced the exact same issue with a system message containing the following text:

      ## LogQL Structure
      **Format:** `{stream_selector} [| pipeline_expression]*`

And got this error:

2026-02-27 16:02:11,520 - kagent_adk.kagent.adk._agent_executor - ERROR - Error handling A2A request: 'Context variable not found: `stream_selector`.'
Traceback (most recent call last):
  File "/.kagent/packages/kagent-adk/src/kagent/adk/_agent_executor.py", line 230, in _execute_impl
    await self._handle_request(context, event_queue, runner, run_args)
  File "/.kagent/packages/kagent-adk/src/kagent/adk/_agent_executor.py", line 392, in _handle_request
    async for adk_event in agen:
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/runners.py", line 561, in run_async
    async for event in agen:
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/runners.py", line 549, in _run_with_trace
    async for event in agen:
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/runners.py", line 778, in _exec_with_plugin
    async for event in agen:
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/runners.py", line 538, in execute
    async for event in agen:
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/agents/base_agent.py", line 294, in run_async
    async for event in agen:
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/agents/llm_agent.py", line 468, in _run_async_impl
    async for event in agen:
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/flows/llm_flows/base_llm_flow.py", line 427, in run_async
    async for event in agen:
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/flows/llm_flows/base_llm_flow.py", line 446, in _run_one_step_async
    async for event in agen:
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/flows/llm_flows/base_llm_flow.py", line 535, in _preprocess_async
    async for event in agen:
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/flows/llm_flows/instructions.py", line 129, in run_async
    await _build_instructions(invocation_context, llm_request)
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/flows/llm_flows/instructions.py", line 110, in _build_instructions
    si = await _process_agent_instruction(agent, invocation_context)
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/flows/llm_flows/instructions.py", line 56, in _process_agent_instruction
    si = await instructions_utils.inject_session_state(
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/utils/instructions_utils.py", line 133, in inject_session_state
    return await _async_sub(r'{+[^{}]*}+', _replace_match, template)
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/utils/instructions_utils.py", line 75, in _async_sub
    replacement = await repl_async_fn(match)
  File "/.kagent/.venv/lib/python3.10/site-packages/google/adk/utils/instructions_utils.py", line 131, in _replace_match
    raise KeyError(f'Context variable not found: `{var_name}`.')
KeyError: 'Context variable not found: `stream_selector`.'