fix: direct client pydantic type casting (#1145)

# What does this PR do?
- Closes #1142 
- Root cause is due to having `Union[str, AgenToolGroupWithArgs]`

## Test Plan
- Test with script described in issue. 

- Print out final converted pydantic object
<img width="1470" alt="image"
src="https://github.com/user-attachments/assets/15dc9cd0-f37a-4b91-905f-3fe4f59a08c6"
/>


[//]: # (## Documentation)

llama_stack/distribution/library_client.py

@@ -13,7 +13,7 @@ import re
 from concurrent.futures import ThreadPoolExecutor
 from enum import Enum
 from pathlib import Path
-from typing import Any, Optional, TypeVar, get_args, get_origin
+from typing import Any, Optional, TypeVar, Union, get_args, get_origin
 
 import httpx
 import yaml
@@ -81,12 +81,13 @@ def convert_to_pydantic(annotation: Any, value: Any) -> Any:
         return value
 
     origin = get_origin(annotation)
+
     if origin is list:
         item_type = get_args(annotation)[0]
         try:
             return [convert_to_pydantic(item_type, item) for item in value]
         except Exception:
-            print(f"Error converting list {value}")
+            print(f"Error converting list {value} into {item_type}")
             return value
 
     elif origin is dict:
@@ -94,17 +95,26 @@ def convert_to_pydantic(annotation: Any, value: Any) -> Any:
         try:
             return {k: convert_to_pydantic(val_type, v) for k, v in value.items()}
         except Exception:
-            print(f"Error converting dict {value}")
+            print(f"Error converting dict {value} into {val_type}")
             return value
 
     try:
         # Handle Pydantic models and discriminated unions
         return TypeAdapter(annotation).validate_python(value)
+
     except Exception as e:
-        cprint(
-            f"Warning: direct client failed to convert parameter {value} into {annotation}: {e}",
-            "yellow",
-        )
+        # TODO: this is workardound for having Union[str, AgentToolGroup] in API schema.
+        # We should get rid of any non-discriminated unions in the API schema.
+        if origin is Union:
+            for union_type in get_args(annotation):
+                try:
+                    return convert_to_pydantic(union_type, value)
+                except Exception:
+                    continue
+            cprint(
+                f"Warning: direct client failed to convert parameter {value} into {annotation}: {e}",
+                "yellow",
+            )
         return value
 
 
@@ -421,4 +431,5 @@ class AsyncLlamaStackAsLibraryClient(AsyncLlamaStackClient):
             if param_name in body:
                 value = body.get(param_name)
                 converted_body[param_name] = convert_to_pydantic(param.annotation, value)
+
         return converted_body