diff --git a/apps/desktop/electron/backend-start-failure.test.ts b/apps/desktop/electron/backend-start-failure.test.ts
new file mode 100644
index 0000000000000..0888d65fbc41b
--- /dev/null
+++ b/apps/desktop/electron/backend-start-failure.test.ts
@@ -0,0 +1,23 @@
+import assert from 'node:assert/strict'
+
+import { test } from 'vitest'
+
+import { shouldLatchBackendStartFailure } from './backend-start-failure'
+
+test('latches a LOCAL backend failure so the install-retry loop is broken', () => {
+  assert.equal(shouldLatchBackendStartFailure({ attemptedRemote: false }), true)
+})
+
+test('never latches a REMOTE failure so recovery stays retryable without a restart', () => {
+  // A lapsed OAuth session / mint timeout / host briefly unreachable across a
+  // laptop sleep must not wedge the app: the next connect has to re-attempt and
+  // re-mint against the refreshed session.
+  assert.equal(shouldLatchBackendStartFailure({ attemptedRemote: true }), false)
+})
+
+test('the two branches are mutually exclusive (a failure either latches or stays retryable)', () => {
+  for (const attemptedRemote of [true, false]) {
+    const latched = shouldLatchBackendStartFailure({ attemptedRemote })
+    assert.equal(latched, !attemptedRemote)
+  }
+})
diff --git a/apps/desktop/electron/backend-start-failure.ts b/apps/desktop/electron/backend-start-failure.ts
new file mode 100644
index 0000000000000..4998b0164a705
--- /dev/null
+++ b/apps/desktop/electron/backend-start-failure.ts
@@ -0,0 +1,41 @@
+/**
+ * backend-start-failure.ts
+ *
+ * Decides whether a failed primary-backend boot should *latch* into
+ * `backendStartFailure`. A latched failure makes every subsequent
+ * startHermes() re-throw the cached error without re-attempting the connect —
+ * the right behavior for a LOCAL backend so the renderer's retry loop can't
+ * restart a broken install over and over.
+ *
+ * It is the WRONG behavior for a REMOTE backend. A remote connect can fail for
+ * transient reasons — a lapsed OAuth access-token cookie (the gateway rotates a
+ * fresh one from the live refresh-token cookie on the next request), a
+ * ws-ticket mint that timed out mid sleep/wake, or a host that was briefly
+ * unreachable across a laptop sleep. There is no child process whose 'exit'
+ * handler would clear the cache, so a latched remote failure sticks until the
+ * whole app is quit and relaunched: reconnect, "Sign out & sign in" (which only
+ * reloads the renderer), and the wake-recovery revalidate path all keep hitting
+ * the same stale error. Not latching lets the very next connect re-mint a
+ * ticket against the (now refreshed) session and self-heal.
+ *
+ * Extracted as a dependency-free pure predicate so the invariant is testable
+ * without booting Electron or reading main.ts source text.
+ */
+
+export interface BackendStartFailureContext {
+  /**
+   * True when the boot that just failed was resolving/dialing a REMOTE (or
+   * cloud) primary backend rather than spawning a local child.
+   */
+  attemptedRemote: boolean
+}
+
+/**
+ * Whether a startHermes() failure should latch into `backendStartFailure`.
+ * Latch local failures (prevent install-restart loops); never latch remote
+ * failures (they are transient and must stay retryable so recovery paths work
+ * without an app restart).
+ */
+export function shouldLatchBackendStartFailure(context: BackendStartFailureContext): boolean {
+  return !context.attemptedRemote
+}
diff --git a/apps/desktop/electron/main.ts b/apps/desktop/electron/main.ts
index 29e38d6420f2c..1a9d28c5eef5f 100644
--- a/apps/desktop/electron/main.ts
+++ b/apps/desktop/electron/main.ts
@@ -34,6 +34,7 @@ import { createBackendConnectionState } from './backend-connection-state'
 import { buildDesktopBackendEnv, normalizeHermesHomeRoot } from './backend-env'
 import { canImportHermesCli, verifyHermesCli } from './backend-probes'
 import { waitForDashboardPortAnnouncement } from './backend-ready'
+import { shouldLatchBackendStartFailure } from './backend-start-failure'
 import { detectRemoteDisplay, isWindowsBinaryPathInWsl, isWslEnvironment } from './bootstrap-platform'
 import { runBootstrap } from './bootstrap-runner'
 import {
@@ -6171,6 +6172,16 @@ function globalRemoteActive() {
   return modeIsRemoteLike(readDesktopConnectionConfig().mode)
 }
 
+// True when the PRIMARY profile's backend resolves to a remote/cloud host —
+// i.e. resolveRemoteBackend(primaryProfileKey()) would return a descriptor
+// rather than null. Mirrors that function's precedence (per-profile override →
+// env → global) so a startHermes() failure can be classified as remote (never
+// latch — transient, must stay retryable) vs local (latch to break install
+// loops) BEFORE the throwing resolve/mint runs.
+function primaryBackendIsRemote() {
+  return Boolean(profileHasRemoteOverride(primaryProfileKey())) || globalRemoteActive()
+}
+
 // GET a profile's resolved backend (remote pool or local primary), parsed JSON.
 async function fetchJsonForProfile(profile, path) {
   return requestJsonForProfile(profile, path, 'GET')
@@ -6738,10 +6749,17 @@ async function startHermes() {
 
   const connectionAttempt = backendConnectionState.startAttempt()
 
+  // Classify this boot BEFORE the throwing resolve/mint runs: a remote failure
+  // must NOT latch (it's transient — see shouldLatchBackendStartFailure), while
+  // a local failure latches to break install-restart loops.
+  let attemptedRemote = primaryBackendIsRemote()
+
   const connectionPromise = (async () => {
     await advanceBootProgress('backend.resolve', 'Resolving Hermes backend', 8)
     // Resolve for the desktop's primary profile so a per-profile remote
     // override on the active profile is honored (falls back to env / global).
+    // Re-read once resolved so the classification tracks the value actually used.
+    attemptedRemote = primaryBackendIsRemote()
     const remote = await resolveRemoteBackend(primaryProfileKey())
 
     if (remote) {
@@ -6947,7 +6965,14 @@ async function startHermes() {
     }
 
     const message = error instanceof Error ? error.message : String(error)
-    backendStartFailure = error instanceof Error ? error : new Error(message)
+    // Only latch LOCAL boot failures. A remote failure (lapsed session / mint
+    // timeout / host briefly unreachable across sleep) is transient and has no
+    // child 'exit' handler to clear the cache — latching it would wedge the app
+    // on "session expired" until a full restart, defeating reconnect, the
+    // "Sign out & sign in" reload, and the wake-recovery revalidate path.
+    if (shouldLatchBackendStartFailure({ attemptedRemote })) {
+      backendStartFailure = error instanceof Error ? error : new Error(message)
+    }
     updateBootProgress(
       {
         error: message,