What
A subagent is a helper agent that Claude starts to work on part of a task, and subagents can start their own subagents. When this nesting reaches its depth limit, Claude Code now removes the Agent tool from the deeper agent, even if that agent's definition lists the tool. Claude Code also records that the tool was withheld for this reason.
Why
This limits how deep chains of subagents can go. An agent that expects to start its own helpers may not be able to when it is already deeply nested.
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The writer flagged doubt
The depth limit is not stated, and it is not clear where the record that the tool was withheld shows up.