fix: preserve saved environment and login during upgrade

install.sh

@@ -204,7 +204,7 @@ fi
 # MUST run before `agent setup` (`setup agent` on older CLIs): that step registers the MCP server, and it derives the MCP host and
 # registration name from the persisted environment. Switching afterwards would leave the machine's
 # agents pointed at production's MCP server while the CLI talked to staging.
-if [ -n "$ENV_NAME" ]; then
+if [ -n "$ENV_NAME" ] && [ "${INSTA_UPGRADE:-0}" != "1" ]; then
   echo
   if ! "$INSTALL_DIR/$BIN" env use "$ENV_NAME"; then
     # HARD FAIL, deliberately. The environment was requested and could not be applied, so this

src/commands/upgrade.ts

@@ -294,7 +294,7 @@ export async function upgrade(current: string, deps: UpgradeDeps = {}): Promise<
   if (channel === 'npm') {
     await run({ cmd: 'npm', args: ['install', '-g', `insta@${latest ?? 'latest'}`], env: process.env })
   } else {
-    const shellEnv = { ...process.env, INSTA_INSTALL_DIR: installDir }
+    const shellEnv = { ...process.env, INSTA_INSTALL_DIR: installDir, INSTA_UPGRADE: '1' }
     const sh = { cmd: 'sh', args: ['-c', `curl -fsSL ${INSTALL_SH} | sh`] }
     if (!latest) {
       await run({ ...sh, env: shellEnv })

test/upgrade-environment.test.ts

@@ -0,0 +1,57 @@
+import { spawnSync } from 'node:child_process'
+import { mkdirSync, mkdtempSync, readFileSync, rmSync, writeFileSync } from 'node:fs'
+import { tmpdir } from 'node:os'
+import { join } from 'node:path'
+import { fileURLToPath } from 'node:url'
+import { expect, it } from 'vitest'
+import { upgrade } from '../src/commands/upgrade.js'
+
+const installer = readFileSync(new URL('../install.sh', import.meta.url), 'utf8')
+const environmentStep = installer.slice(installer.indexOf('# ---- environment'), installer.indexOf('# ---- agent setup'))
+const repo = fileURLToPath(new URL('..', import.meta.url))
+
+it.skipIf(process.platform === 'win32').each([undefined, 'prod', 'staging'])(
+  'binary upgrade preserves saved environment and login with INSTA_ENV=%s', async (override) => {
+    const home = mkdtempSync(join(tmpdir(), 'insta-upgrade-env-'))
+    const config = join(home, '.insta', 'config.json')
+    const saved = { INSTA_ENV: process.env.INSTA_ENV, INSTA_UPDATE_CACHE: process.env.INSTA_UPDATE_CACHE }
+    try {
+      mkdirSync(join(home, '.insta'))
+      const original = JSON.stringify({ apiUrl: 'https://api.staging.instacloud.com', accessToken: 'test-access', refreshToken: 'test-refresh', user: { id: 'test-user' } })
+      writeFileSync(config, original)
+      writeFileSync(join(home, 'insta'), '#!/bin/sh\nexec "$TEST_NODE" --import tsx "$TEST_CLI" "$@"\n', { mode: 0o755 })
+      if (override === undefined) delete process.env.INSTA_ENV
+      else process.env.INSTA_ENV = override
+      process.env.INSTA_UPDATE_CACHE = join(home, 'update-check.json')
+      const runEnvironment = (env: NodeJS.ProcessEnv) => {
+        const result = spawnSync('sh', ['-c', `set -eu\n${environmentStep}`], {
+          cwd: repo, encoding: 'utf8', timeout: 10_000,
+          env: { ...env, HOME: home, INSTALL_DIR: home, BIN: 'insta', ENV_NAME: env.INSTA_ENV ?? '',
+            TEST_NODE: process.execPath, TEST_CLI: join(repo, 'src/index.ts'), INSTA_NO_AUTOUPDATE: '1' },
+        })
+        expect(result.status, result.stderr).toBe(0)
+      }
+      let installs = 0
+      await upgrade('0.0.1', {
+        channel: 'binary', latest: '0.0.2', installDir: home, report: () => {}, observe: async () => '0.0.2',
+        run: async (spec) => {
+          installs++
+          expect(spec.env.INSTA_ENV).toBe(override)
+          runEnvironment(spec.env)
+          expect(readFileSync(config, 'utf8')).toBe(original)
+          if (installs === 1) throw new Error('exercise unpinned fallback')
+        },
+      })
+      expect(installs).toBe(2)
+      expect(readFileSync(config, 'utf8')).toBe(original)
+      runEnvironment({ ...process.env, INSTA_ENV: 'prod', INSTA_UPGRADE: '0' })
+      expect(JSON.parse(readFileSync(config, 'utf8')).apiUrl).toBe('https://api.instacloud.com')
+    } finally {
+      for (const [key, value] of Object.entries(saved)) {
+        if (value === undefined) delete process.env[key]
+        else process.env[key] = value
+      }
+      rmSync(home, { recursive: true, force: true })
+    }
+  },
+)