[v1.x] Server-side outputSchema validation blocks tool error reporting (isError: true)

[kimsehwan96]

Initial Checks

• I confirm that I'm using the latest version of MCP Python SDK
• I confirm that I searched for my issue in https://github.com/modelcontextprotocol/python-sdk/issues before opening this issue

Description

When a tool handler returns unstructured content for an error case, the low-level server's call_tool decorator validates the output against outputSchema before checking if the response is an error.

This prevents tools with outputSchema from reporting errors via isError: true, as the validation fails with "outputSchema defined but no structured output returned", replacing the original error message.

This was already fixed in the TypeScript SDK via modelcontextprotocol/typescript-sdk#654 / PR #655 (2025-06-24), but the equivalent fix has not been applied to the Python SDK v1.x branch.

The issue is in src/mcp/server/lowlevel/server.py, the call_tool decorator handler:

1. Line ~560: outputSchema validation runs unconditionally — should skip when the result is an error
2. Line ~575: isError=False is hardcoded — there is no path for the handler to signal an error through unstructured content while outputSchema is defined

Example Code

from mcp.server.lowlevel import Server
from mcp import types

server = Server("test")

@server.call_tool()
async def call_tool(name: str, arguments: dict):
    # Tool has outputSchema but needs to return an error
    # This gets blocked by outputSchema validation
    return [types.TextContent(type="text", text="Resource not found")]

Python & MCP Python SDK

- Python: 3.11 / 3.12
- MCP SDK: v1.26.0+ (v1.x branch)