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Without AUTOMATION_AGENT_SERVER_URL, ServiceSettings.is_local_mode returns False and the automation server tries to validate the session API key against the OpenHands cloud API (app.all-hands.dev/api/v1/users/me), which returns 401 for locally-generated keys. Setting AUTOMATION_AGENT_SERVER_URL activates the local-mode fast path in authenticate_request(), which validates the key directly against AUTOMATION_LOCAL_API_KEY (already set to the session key) without any network call. This matches what dev-with-automation.mjs and dev-static.mjs already do correctly. Co-authored-by: openhands <openhands@all-hands.dev>