The Mac app stores a copy of each synced chat's working folder beside its messages, so you can continue the chat in the cloud with its files, even with your Mac asleep, out of disk or gone.
It is on by default. After a turn ends and the chat has synced, the app packs the folder and uploads it, at most every 10 minutes per chat and only when a file changed. When you continue the chat in the cloud, the agent starts with the folder restored and is told where it is.
What is copied: the whole folder as it is on disk, with tracked and untracked files, .git, and secrets such as .env. It also includes dumps of the local PostgreSQL databases its .env files point at, and a note of the servers it had listening, so the cloud agent can bring them back. What a package manager rebuilds stays on your Mac (node_modules, virtual environments, build caches). .git stays too if the folder would otherwise pass 2 GiB.
Who gets it: only you. The copy is stored privately and restored only when you continue the chat yourself. A teammate who continues your chat gets the conversation without the folder.
To turn it off: open Settings › This Mac, go to Sync & voice, open Advanced and turn off Keep working folders in the cloud.
Where: Mac app, which uploads the folder, then continue the chat on the web, your phone or another Mac.
Good to know: storing the folder runs nothing and isn't billed. If no folder is stored, the chat continues with its messages only. Developers can read what is stored with GET /v1/sessions/{id}/mirror/environment. Related: Sync local Mac chats to your workspace, Continue a Mac chat in the cloud, How a Mac agent picks its folder.