Address comments

python/packages/claude/tests/test_claude_agent.py

@@ -1181,6 +1181,7 @@ class TestClaudeAgentTelemetry:
         mock_client = self._create_mock_client(messages)
 
         monkeypatch.setattr(OBSERVABILITY_SETTINGS, "enable_instrumentation", False)
+        monkeypatch.setattr(OBSERVABILITY_SETTINGS, "enable_sensitive_data", False)
 
         with (
             patch("agent_framework_claude._agent.ClaudeSDKClient", return_value=mock_client),

python/packages/core/agent_framework/observability.py

@@ -691,7 +691,7 @@ class ObservabilitySettings:
 
         Model diagnostics are enabled if either diagnostic is enabled or diagnostic with sensitive events is enabled.
         """
-        return self.enable_instrumentation or self.enable_sensitive_data
+        return self.enable_instrumentation
 
     @property
     def SENSITIVE_DATA_ENABLED(self) -> bool:

python/packages/core/tests/core/test_observability.py

@@ -1015,30 +1015,6 @@ def test_observability_settings_is_setup_initial(monkeypatch):
     assert settings.is_setup is False
 
 
-@pytest.mark.parametrize(
-    ("enable_instrumentation", "enable_sensitive_data", "expected"),
-    [
-        (False, False, False),
-        (True, False, True),
-        (False, True, True),
-        (True, True, True),
-    ],
-)
-def test_observability_settings_enabled_property(
-    monkeypatch, enable_instrumentation: bool, enable_sensitive_data: bool, expected: bool
-):
-    """ENABLED is True when either instrumentation or sensitive data is enabled."""
-    from agent_framework.observability import ObservabilitySettings
-
-    monkeypatch.delenv("ENABLE_INSTRUMENTATION", raising=False)
-    monkeypatch.delenv("ENABLE_SENSITIVE_DATA", raising=False)
-    settings = ObservabilitySettings(
-        enable_instrumentation=enable_instrumentation,
-        enable_sensitive_data=enable_sensitive_data,
-    )
-    assert settings.ENABLED is expected
-
-
 # region Test enable_instrumentation function