diff --git a/ui/src/components/DocumentAnnotationLayer.tsx b/ui/src/components/DocumentAnnotationLayer.tsx
index d9418aae7f..c149f7e013 100644
--- a/ui/src/components/DocumentAnnotationLayer.tsx
+++ b/ui/src/components/DocumentAnnotationLayer.tsx
@@ -34,16 +34,25 @@ export interface PendingAnchor {
   selectedText: string;
 }
 
+export interface AnnotationAnchorRect {
+  top: number;
+  left: number;
+  width: number;
+  height: number;
+}
+
 export interface AnnotationLayerProps {
   containerRef: React.RefObject<HTMLElement | null>;
   markdown: string;
   threads: AnnotationOverlayThread[];
   focusedThreadId: string | null;
-  onThreadFocus: (threadId: string) => void;
+  onThreadFocus: (threadId: string, rect: AnnotationAnchorRect) => void;
   /** Tracks the most recently captured pending selection. */
   pendingAnchor: PendingAnchor | null;
   onPendingAnchorChange: (anchor: PendingAnchor | null) => void;
-  onRequestComment: (anchor: PendingAnchor) => void;
+  onRequestComment: (anchor: PendingAnchor, rect: AnnotationAnchorRect) => void;
+  /** Publishes refreshed geometry for the currently open popover. */
+  onAnchorRectChange?: (rect: AnnotationAnchorRect | null) => void;
   /** Disables the "add comment" affordance when set. */
   newCommentDisabled?: boolean;
   newCommentDisabledReason?: string | null;
@@ -236,6 +245,7 @@ export function DocumentAnnotationLayer({
   pendingAnchor,
   onPendingAnchorChange,
   onRequestComment,
+  onAnchorRectChange,
   newCommentDisabled = false,
   newCommentDisabledReason = null,
   hideResolved = true,
@@ -247,6 +257,7 @@ export function DocumentAnnotationLayer({
   const [toolbarPosition, setToolbarPosition] = useState<ToolbarPosition | null>(null);
   const overlayRef = useRef<HTMLDivElement | null>(null);
   const lastCaptureSelectionRequestIdRef = useRef<number>(0);
+  const lastSelectionRectRef = useRef<AnnotationAnchorRect | null>(null);
   const reactId = useId();
   const nativeHighlightInstanceId = useMemo(
     () => `document-annotation-${reactId.replace(/[^a-zA-Z0-9_-]/g, "")}`,
@@ -340,7 +351,16 @@ export function DocumentAnnotationLayer({
     }
     setNativeHighlightRanges(nativeHighlightInstanceId, nativeRanges);
     setHighlightRects(next);
-  }, [containerRef, focusedThreadId, nativeHighlightInstanceId, pendingHighlightText, visibleThreads]);
+    const activeId = pendingHighlightText ? PENDING_HIGHLIGHT_THREAD_ID : focusedThreadId;
+    const activeRects = activeId ? next.filter((rect) => rect.threadId === activeId) : [];
+    const activeRect = activeRects.find((rect) => rect.isTail) ?? activeRects[0];
+    onAnchorRectChange?.(activeRect ? {
+      top: activeRect.top,
+      left: activeRect.left,
+      width: activeRect.width,
+      height: activeRect.height,
+    } : null);
+  }, [containerRef, focusedThreadId, nativeHighlightInstanceId, onAnchorRectChange, pendingHighlightText, visibleThreads]);
 
   useLayoutEffect(() => {
     computeHighlightRects();
@@ -428,6 +448,12 @@ export function DocumentAnnotationLayer({
     const top = Math.max(0, rect.top - overlayRect.top - 36);
     const left = Math.max(0, rect.left - overlayRect.left + rect.width / 2 - 80);
     setToolbarPosition({ top, left });
+    lastSelectionRectRef.current = {
+      top: rect.top - overlayRect.top,
+      left: rect.left - overlayRect.left,
+      width: rect.width,
+      height: rect.height,
+    };
     return {
       selector: anchor.selector,
       selectedText: containerOffset.selectedText,
@@ -467,12 +493,12 @@ export function DocumentAnnotationLayer({
     const anchor = captureSelection();
     if (anchor) {
       onPendingAnchorChange(anchor);
-      onRequestComment(anchor);
+      if (lastSelectionRectRef.current) onRequestComment(anchor, lastSelectionRectRef.current);
     }
   }, [captureSelectionRequestId, captureSelection, onPendingAnchorChange, onRequestComment]);
 
   const handleAddComment = () => {
-    if (pendingAnchor) onRequestComment(pendingAnchor);
+    if (pendingAnchor && lastSelectionRectRef.current) onRequestComment(pendingAnchor, lastSelectionRectRef.current);
   };
 
   const content = (
@@ -551,7 +577,12 @@ export function DocumentAnnotationLayer({
                 }
                 onMouseDown={(event) => {
                   event.preventDefault();
-                  onThreadFocus(rect.threadId);
+                  onThreadFocus(rect.threadId, {
+                    top: rect.top,
+                    left: rect.left,
+                    width: rect.width,
+                    height: rect.height,
+                  });
                 }}
               />
             );
diff --git a/ui/src/components/DocumentAnnotationPanel.tsx b/ui/src/components/DocumentAnnotationPanel.tsx
index 40305f72b9..3737423ba8 100644
--- a/ui/src/components/DocumentAnnotationPanel.tsx
+++ b/ui/src/components/DocumentAnnotationPanel.tsx
@@ -1,8 +1,6 @@
-import { useCallback, useEffect, useMemo, useRef, useState } from "react";
-import { useMutation, useQuery, useQueryClient } from "@tanstack/react-query";
+import { useMemo, useRef, useState, useEffect } from "react";
 import type {
   DocumentAnnotationComment,
-  DocumentAnnotationThreadStatus,
   DocumentAnnotationThreadWithComments,
 } from "@paperclipai/shared";
 import {
@@ -23,9 +21,7 @@ import { Sheet, SheetContent, SheetTitle } from "@/components/ui/sheet";
 import { Textarea } from "@/components/ui/textarea";
 import { Avatar, AvatarFallback, AvatarImage } from "@/components/ui/avatar";
 import { cn, relativeTime } from "@/lib/utils";
-import { documentAnnotationsApi, type DocumentAnnotationTarget } from "@/api/document-annotations";
-import { authApi } from "@/api/auth";
-import { queryKeys } from "@/lib/queryKeys";
+import type { DocumentAnnotationTarget } from "@/api/document-annotations";
 import { copyTextToClipboard } from "@/lib/clipboard";
 import { AgentIcon } from "./AgentIconPicker";
 import { deriveInitials } from "./Identity";
@@ -33,6 +29,7 @@ import { MarkdownBody } from "./MarkdownBody";
 import type { PendingAnchor } from "./DocumentAnnotationLayer";
 import type { Agent } from "@paperclipai/shared";
 import type { CompanyUserProfile } from "@/lib/company-members";
+import { useDocumentAnnotationMutations } from "@/hooks/useDocumentAnnotationMutations";
 
 export interface AnnotationPanelProps {
   open: boolean;
@@ -105,11 +102,9 @@ export function DocumentAnnotationPanel(props: AnnotationPanelProps) {
   );
 }
 
-function AnnotationPanelBody(props: AnnotationPanelProps) {
-  const queryClient = useQueryClient();
+export function AnnotationPanelBody(props: AnnotationPanelProps) {
   const [composerValue, setComposerValue] = useState("");
   const [replyDrafts, setReplyDrafts] = useState<Record<string, string>>({});
-  const [mutationError, setMutationError] = useState<string | null>(null);
   const composerRef = useRef<HTMLTextAreaElement | null>(null);
   const bodyTestId = props.isMobile ? "document-annotation-panel" : undefined;
   const annotationTarget = useMemo<DocumentAnnotationTarget>(() => {
@@ -118,19 +113,18 @@ function AnnotationPanelBody(props: AnnotationPanelProps) {
     return { kind: "issue", issueId: props.issueId, documentKey: props.documentKey };
   }, [props.documentKey, props.issueId, props.target]);
 
-  const { data: session } = useQuery({
-    queryKey: queryKeys.auth.session,
-    queryFn: () => authApi.getSession(),
-    staleTime: 5 * 60_000,
+  const { createThread, addReply, updateStatus, mutationError, currentUser } = useDocumentAnnotationMutations({
+    target: annotationTarget,
+    baseRevisionId: props.baseRevisionId,
+    baseRevisionNumber: props.baseRevisionNumber,
+    pendingAnchor: props.pendingAnchor,
+    onFocusThread: props.onFocusThread,
+    onThreadCreated: () => {
+      props.onClearPendingAnchor();
+      setComposerValue("");
+    },
+    onReplyAdded: (threadId) => setReplyDrafts((current) => ({ ...current, [threadId]: "" })),
   });
-  const currentUser = useMemo(() => {
-    const user = session?.user;
-    return {
-      id: user?.id ?? null,
-      name: user?.name?.trim() || user?.email?.trim() || "You",
-      image: user?.image ?? null,
-    };
-  }, [session]);
 
   // Show every thread that can be anchored in the document (orphaned threads have
   // lost their anchor). Filters were removed in favour of a single simple list.
@@ -147,164 +141,6 @@ function AnnotationPanelBody(props: AnnotationPanelProps) {
     [props.threads],
   );
 
-  const annotationsQueryKey = useMemo(
-    () => annotationTarget.kind === "routine"
-      ? queryKeys.routines.documentAnnotations(annotationTarget.routineId, annotationTarget.documentKey, "all")
-      : annotationTarget.kind === "case"
-        ? queryKeys.cases.documentAnnotations(annotationTarget.caseId, annotationTarget.documentKey, "all")
-      : queryKeys.issues.documentAnnotations(annotationTarget.issueId, annotationTarget.documentKey, "all"),
-    [annotationTarget],
-  );
-
-  const invalidateAll = useCallback(() => {
-    queryClient.invalidateQueries({
-      predicate: (query) => {
-        if (!Array.isArray(query.queryKey)) return false;
-        if (annotationTarget.kind === "routine") {
-          return query.queryKey[0] === "routines"
-            && query.queryKey[1] === "document-annotations"
-            && query.queryKey[2] === annotationTarget.routineId
-            && query.queryKey[3] === annotationTarget.documentKey;
-        }
-        if (annotationTarget.kind === "case") {
-          return query.queryKey[0] === "cases"
-            && query.queryKey[1] === "document-annotations"
-            && query.queryKey[2] === annotationTarget.caseId
-            && query.queryKey[3] === annotationTarget.documentKey;
-        }
-        return query.queryKey[0] === "issues"
-          && query.queryKey[1] === "document-annotations"
-          && query.queryKey[2] === annotationTarget.issueId
-          && query.queryKey[3] === annotationTarget.documentKey;
-      },
-    });
-  }, [annotationTarget, queryClient]);
-
-  const createThread = useMutation({
-    mutationFn: async (body: string) => {
-      if (!props.pendingAnchor) throw new Error("No selection to anchor to.");
-      if (!props.baseRevisionId) throw new Error("Document has no revision yet.");
-      return documentAnnotationsApi.createForTarget(annotationTarget, {
-        baseRevisionId: props.baseRevisionId,
-        baseRevisionNumber: props.baseRevisionNumber,
-        selector: props.pendingAnchor.selector,
-        body,
-      });
-    },
-    // Optimistically drop the new thread into the cache so submission feels instant.
-    onMutate: async (body: string) => {
-      const anchor = props.pendingAnchor;
-      if (!anchor || !props.baseRevisionId) return undefined;
-      setMutationError(null);
-      await queryClient.cancelQueries({ queryKey: annotationsQueryKey });
-      const previous = queryClient.getQueryData<DocumentAnnotationThreadWithComments[]>(annotationsQueryKey);
-      const optimisticThread = buildOptimisticThread({
-        body,
-        selectedText: anchor.selectedText,
-        target: annotationTarget,
-        documentKey: annotationTarget.documentKey,
-        baseRevisionId: props.baseRevisionId,
-        baseRevisionNumber: props.baseRevisionNumber,
-        normalizedStart: anchor.selector.position.normalizedStart,
-        markdownStart: anchor.selector.position.markdownStart,
-        author: currentUser,
-      });
-      queryClient.setQueryData<DocumentAnnotationThreadWithComments[]>(
-        annotationsQueryKey,
-        (current) => [...(current ?? []), optimisticThread],
-      );
-      props.onFocusThread(optimisticThread.id);
-      return { previous, optimisticId: optimisticThread.id };
-    },
-    onError: (error, _body, context) => {
-      if (context?.previous) {
-        queryClient.setQueryData(annotationsQueryKey, context.previous);
-      }
-      setMutationError(error instanceof Error && error.message
-        ? error.message
-        : "Failed to create comment.");
-    },
-    onSuccess: (thread, _body, context) => {
-      // Swap the optimistic placeholder for the real thread before refetch settles.
-      queryClient.setQueryData<DocumentAnnotationThreadWithComments[]>(
-        annotationsQueryKey,
-        (current) => (current ?? []).map((entry) =>
-          entry.id === context?.optimisticId ? thread : entry,
-        ),
-      );
-      props.onClearPendingAnchor();
-      setComposerValue("");
-      setMutationError(null);
-      props.onFocusThread(thread.id);
-    },
-    onSettled: () => invalidateAll(),
-  });
-
-  const addReply = useMutation({
-    mutationFn: ({ threadId, body }: { threadId: string; body: string }) =>
-      documentAnnotationsApi.addCommentForTarget(annotationTarget, threadId, { body }),
-    // Optimistically append the reply so it stays on screen through the round-trip.
-    onMutate: async ({ threadId, body }) => {
-      setMutationError(null);
-      await queryClient.cancelQueries({ queryKey: annotationsQueryKey });
-      const previous = queryClient.getQueryData<DocumentAnnotationThreadWithComments[]>(annotationsQueryKey);
-      const optimisticComment = buildOptimisticComment({
-        body,
-        threadId,
-        target: annotationTarget,
-        author: currentUser,
-      });
-      queryClient.setQueryData<DocumentAnnotationThreadWithComments[]>(
-        annotationsQueryKey,
-        (current) => (current ?? []).map((thread) =>
-          thread.id === threadId
-            ? { ...thread, comments: [...thread.comments, optimisticComment], updatedAt: optimisticComment.createdAt }
-            : thread,
-        ),
-      );
-      return { previous };
-    },
-    onError: (error, _variables, context) => {
-      if (context?.previous) {
-        queryClient.setQueryData(annotationsQueryKey, context.previous);
-      }
-      setMutationError(error instanceof Error && error.message
-        ? error.message
-        : "Failed to add reply.");
-    },
-    onSuccess: (_comment, variables) => {
-      setReplyDrafts((current) => ({ ...current, [variables.threadId]: "" }));
-      setMutationError(null);
-    },
-    onSettled: () => invalidateAll(),
-  });
-
-  const updateStatus = useMutation({
-    mutationFn: ({ threadId, status }: { threadId: string; status: DocumentAnnotationThreadStatus }) =>
-      documentAnnotationsApi.updateStatusForTarget(annotationTarget, threadId, status),
-    onMutate: async ({ threadId, status }) => {
-      setMutationError(null);
-      await queryClient.cancelQueries({ queryKey: annotationsQueryKey });
-      const previous = queryClient.getQueryData<DocumentAnnotationThreadWithComments[]>(annotationsQueryKey);
-      queryClient.setQueryData<DocumentAnnotationThreadWithComments[]>(
-        annotationsQueryKey,
-        (current) => (current ?? []).map((thread) =>
-          thread.id === threadId ? { ...thread, status } : thread,
-        ),
-      );
-      return { previous };
-    },
-    onError: (error, _variables, context) => {
-      if (context?.previous) {
-        queryClient.setQueryData(annotationsQueryKey, context.previous);
-      }
-      setMutationError(error instanceof Error && error.message
-        ? error.message
-        : "Failed to update comment status.");
-    },
-    onSuccess: () => setMutationError(null),
-    onSettled: () => invalidateAll(),
-  });
 
   useEffect(() => {
     if (!props.open) {
@@ -478,7 +314,7 @@ function AnnotationPanelBody(props: AnnotationPanelProps) {
   );
 }
 
-function ThreadCard(props: {
+export function ThreadCard(props: {
   thread: DocumentAnnotationThreadWithComments;
   expanded: boolean;
   focusedCommentId: string | null;
@@ -695,95 +531,12 @@ function resolveAuthor(
   return { name: comment.authorType === "agent" ? "Agent" : "Board", role: comment.authorType === "agent" ? "agent" : "board" };
 }
 
-interface OptimisticAuthor {
-  id: string | null;
-  name: string;
-  image: string | null;
-}
-
-function optimisticId(prefix: string): string {
-  const random = typeof crypto !== "undefined" && typeof crypto.randomUUID === "function"
-    ? crypto.randomUUID()
-    : `${Date.now()}-${Math.floor(Math.random() * 1e9)}`;
-  return `${prefix}-${random}`;
-}
-
-function buildOptimisticComment(input: {
-  body: string;
-  threadId: string;
-  target: DocumentAnnotationTarget;
-  author: OptimisticAuthor;
-}): DocumentAnnotationComment {
-  const now = new Date();
-  return {
-    id: optimisticId("optimistic-comment"),
-    companyId: "",
-    threadId: input.threadId,
-    issueId: input.target.kind === "issue" ? input.target.issueId : null,
-    routineId: input.target.kind === "routine" ? input.target.routineId : null,
-    caseId: input.target.kind === "case" ? input.target.caseId : null,
-    documentId: "",
-    body: input.body,
-    authorType: "user",
-    authorAgentId: null,
-    authorUserId: input.author.id,
-    createdByRunId: null,
-    issueCommentId: null,
-    createdAt: now,
-    updatedAt: now,
-  };
-}
-
-function buildOptimisticThread(input: {
-  body: string;
-  selectedText: string;
-  target: DocumentAnnotationTarget;
-  documentKey: string;
-  baseRevisionId: string;
-  baseRevisionNumber: number;
-  normalizedStart: number;
-  markdownStart: number;
-  author: OptimisticAuthor;
-}): DocumentAnnotationThreadWithComments {
-  const id = optimisticId("optimistic-thread");
-  const now = new Date();
-  const comment = buildOptimisticComment({
-    body: input.body,
-    threadId: id,
-    target: input.target,
-    author: input.author,
-  });
-  // Only the fields the panel + overlay read need to be accurate; the optimistic
-  // thread is swapped for the server copy on success. Cast through unknown so we
-  // don't have to fabricate every backend-only column.
-  return {
-    id,
-    issueId: input.target.kind === "issue" ? input.target.issueId : null,
-    routineId: input.target.kind === "routine" ? input.target.routineId : null,
-    caseId: input.target.kind === "case" ? input.target.caseId : null,
-    documentKey: input.documentKey,
-    status: "open",
-    anchorState: "active",
-    selectedText: input.selectedText,
-    normalizedStart: input.normalizedStart,
-    markdownStart: input.markdownStart,
-    originalRevisionId: input.baseRevisionId,
-    originalRevisionNumber: input.baseRevisionNumber,
-    currentRevisionId: input.baseRevisionId,
-    currentRevisionNumber: input.baseRevisionNumber,
-    createdByUserId: input.author.id,
-    createdAt: now,
-    updatedAt: now,
-    comments: [comment],
-  } as unknown as DocumentAnnotationThreadWithComments;
-}
-
-function truncate(value: string, limit: number) {
+export function truncate(value: string, limit: number) {
   if (value.length <= limit) return value;
   return `${value.slice(0, limit - 1)}…`;
 }
 
-async function copyAnnotationLink(documentKey: string, threadId: string) {
+export async function copyAnnotationLink(documentKey: string, threadId: string) {
   if (typeof window === "undefined") return;
   const { pathname } = window.location;
   const hash = `#document-${encodeURIComponent(documentKey)}&thread=${encodeURIComponent(threadId)}`;
diff --git a/ui/src/components/DocumentAnnotationPopover.test.tsx b/ui/src/components/DocumentAnnotationPopover.test.tsx
new file mode 100644
index 0000000000..e52b0cebb8
--- /dev/null
+++ b/ui/src/components/DocumentAnnotationPopover.test.tsx
@@ -0,0 +1,132 @@
+// @vitest-environment jsdom
+
+import { createRef } from "react";
+import { createRoot } from "react-dom/client";
+import type { DocumentAnnotationThreadWithComments } from "@paperclipai/shared";
+import { afterEach, beforeEach, describe, expect, it, vi } from "vitest";
+import { DocumentAnnotationPopover } from "./DocumentAnnotationPopover";
+
+const mutations = vi.hoisted(() => ({
+  create: vi.fn(),
+  reply: vi.fn(),
+  status: vi.fn(),
+}));
+
+vi.mock("@/hooks/useDocumentAnnotationMutations", () => ({
+  useDocumentAnnotationMutations: () => ({
+    createThread: { mutate: mutations.create, isPending: false },
+    addReply: { mutate: mutations.reply, isPending: false },
+    updateStatus: { mutate: mutations.status, isPending: false },
+    mutationError: null,
+  }),
+}));
+
+vi.mock("./MarkdownBody", () => ({ MarkdownBody: ({ children }: { children: string }) => <p>{children}</p> }));
+
+const pendingAnchor = {
+  selector: {
+    quote: { exact: "selected plan text", prefix: "", suffix: "" },
+    position: { normalizedStart: 0, normalizedEnd: 18, markdownStart: 0, markdownEnd: 18 },
+  },
+  selectedText: "selected plan text",
+};
+
+function thread(): DocumentAnnotationThreadWithComments {
+  return {
+    id: "thread-1",
+    status: "open",
+    anchorState: "active",
+    selectedText: "selected plan text",
+    comments: [{
+      id: "comment-1",
+      threadId: "thread-1",
+      body: "Initial comment",
+      authorType: "user",
+      authorAgentId: null,
+      authorUserId: "user-1",
+      createdAt: new Date(),
+      updatedAt: new Date(),
+    }],
+  } as unknown as DocumentAnnotationThreadWithComments;
+}
+
+describe("DocumentAnnotationPopover", () => {
+  let host: HTMLDivElement;
+  let container: HTMLDivElement;
+  let root: ReturnType<typeof createRoot>;
+
+  beforeEach(() => {
+    vi.clearAllMocks();
+    host = document.createElement("div");
+    container = document.createElement("div");
+    Object.defineProperties(container, { clientWidth: { value: 500 }, clientHeight: { value: 500 } });
+    host.appendChild(container);
+    document.body.appendChild(host);
+    root = createRoot(container);
+  });
+
+  afterEach(async () => {
+    await vi.waitFor(() => root.unmount());
+    host.remove();
+  });
+
+  const render = async (overrides: Partial<React.ComponentProps<typeof DocumentAnnotationPopover>> = {}) => {
+    const onClose = vi.fn();
+    const props: React.ComponentProps<typeof DocumentAnnotationPopover> = {
+      anchorRect: { top: 40, left: 60, width: 100, height: 20 },
+      containerRef: createRef<HTMLDivElement>(),
+      target: { kind: "issue", issueId: "issue-1", documentKey: "plan" },
+      documentKey: "plan",
+      baseRevisionId: "rev-1",
+      baseRevisionNumber: 1,
+      pendingAnchor,
+      thread: null,
+      focusedCommentId: null,
+      onFocusThread: vi.fn(),
+      onClose,
+      onThreadCreated: vi.fn(),
+      ...overrides,
+    };
+    props.containerRef.current = container;
+    root.render(<DocumentAnnotationPopover {...props} />);
+    await vi.waitFor(() => expect(container.querySelector('[data-testid="document-annotation-popover"]')).not.toBeNull());
+    return { onClose };
+  };
+
+  it("anchors compose mode and submits with the keyboard shortcut", async () => {
+    await render();
+    const card = container.querySelector('[data-testid="document-annotation-popover"]') as HTMLElement;
+    expect(card.style.top).toBe("66px");
+    expect(card.style.left).toBe("60px");
+    const textarea = container.querySelector("textarea") as HTMLTextAreaElement;
+    const setter = Object.getOwnPropertyDescriptor(HTMLTextAreaElement.prototype, "value")?.set;
+    setter?.call(textarea, "Looks good");
+    textarea.dispatchEvent(new Event("input", { bubbles: true }));
+    textarea.dispatchEvent(new KeyboardEvent("keydown", { key: "Enter", metaKey: true, bubbles: true }));
+    await vi.waitFor(() => expect(mutations.create).toHaveBeenCalledWith("Looks good"));
+  });
+
+  it("dismisses on Escape and outside pointer down", async () => {
+    const first = await render();
+    document.dispatchEvent(new KeyboardEvent("keydown", { key: "Escape", bubbles: true }));
+    expect(first.onClose).toHaveBeenCalledTimes(1);
+    document.body.dispatchEvent(new Event("pointerdown", { bubbles: true }));
+    expect(first.onClose).toHaveBeenCalledTimes(2);
+  });
+
+  it("replies to and resolves a focused thread", async () => {
+    await render({ pendingAnchor: null, thread: thread() });
+    const textarea = container.querySelector("textarea") as HTMLTextAreaElement;
+    const setter = Object.getOwnPropertyDescriptor(HTMLTextAreaElement.prototype, "value")?.set;
+    setter?.call(textarea, "A reply");
+    textarea.dispatchEvent(new Event("input", { bubbles: true }));
+    await vi.waitFor(() => expect(textarea.value).toBe("A reply"));
+    const buttons = Array.from(container.querySelectorAll("button"));
+    buttons.find((button) => button.textContent?.includes("Reply"))?.click();
+    buttons.find((button) => button.textContent?.includes("Resolve"))?.click();
+    await vi.waitFor(() => {
+      expect(mutations.reply).toHaveBeenCalledWith({ threadId: "thread-1", body: "A reply" });
+      expect(mutations.status).toHaveBeenCalledWith({ threadId: "thread-1", status: "resolved" });
+    });
+  });
+});
diff --git a/ui/src/components/DocumentAnnotationPopover.tsx b/ui/src/components/DocumentAnnotationPopover.tsx
new file mode 100644
index 0000000000..b4f83b9176
--- /dev/null
+++ b/ui/src/components/DocumentAnnotationPopover.tsx
@@ -0,0 +1,154 @@
+import { useEffect, useMemo, useRef, useState } from "react";
+import type { Agent, DocumentAnnotationThreadWithComments } from "@paperclipai/shared";
+import { Button } from "@/components/ui/button";
+import { Textarea } from "@/components/ui/textarea";
+import type { DocumentAnnotationTarget } from "@/api/document-annotations";
+import type { CompanyUserProfile } from "@/lib/company-members";
+import { useDocumentAnnotationMutations } from "@/hooks/useDocumentAnnotationMutations";
+import type { AnnotationAnchorRect, PendingAnchor } from "./DocumentAnnotationLayer";
+import { copyAnnotationLink, ThreadCard, truncate } from "./DocumentAnnotationPanel";
+
+export interface DocumentAnnotationPopoverProps {
+  anchorRect: AnnotationAnchorRect;
+  containerRef: React.RefObject<HTMLElement | null>;
+  target: DocumentAnnotationTarget;
+  documentKey: string;
+  baseRevisionId: string | null;
+  baseRevisionNumber: number;
+  pendingAnchor: PendingAnchor | null;
+  thread: DocumentAnnotationThreadWithComments | null;
+  focusedCommentId: string | null;
+  onFocusThread: (threadId: string | null) => void;
+  onClose: () => void;
+  onThreadCreated: (thread: DocumentAnnotationThreadWithComments) => void;
+  newCommentDisabled?: boolean;
+  agentMap?: ReadonlyMap<string, Pick<Agent, "id" | "name"> & Partial<Pick<Agent, "icon">>>;
+  userProfileMap?: ReadonlyMap<string, CompanyUserProfile>;
+}
+
+export function DocumentAnnotationPopover(props: DocumentAnnotationPopoverProps) {
+  const cardRef = useRef<HTMLDivElement | null>(null);
+  const composerRef = useRef<HTMLTextAreaElement | null>(null);
+  const [composer, setComposer] = useState("");
+  const [reply, setReply] = useState("");
+  const target = useMemo(() => props.target, [props.target]);
+  const { createThread, addReply, updateStatus, mutationError } = useDocumentAnnotationMutations({
+    target,
+    baseRevisionId: props.baseRevisionId,
+    baseRevisionNumber: props.baseRevisionNumber,
+    pendingAnchor: props.pendingAnchor,
+    onFocusThread: props.onFocusThread,
+    onThreadCreated: props.onThreadCreated,
+    onReplyAdded: () => setReply(""),
+  });
+
+  useEffect(() => composerRef.current?.focus(), [props.pendingAnchor]);
+  useEffect(() => {
+    const dismiss = (event: PointerEvent) => {
+      if (!cardRef.current?.contains(event.target as Node)) props.onClose();
+    };
+    const escape = (event: KeyboardEvent) => {
+      if (event.key === "Escape") {
+        event.preventDefault();
+        props.onClose();
+      }
+    };
+    document.addEventListener("pointerdown", dismiss);
+    document.addEventListener("keydown", escape);
+    return () => {
+      document.removeEventListener("pointerdown", dismiss);
+      document.removeEventListener("keydown", escape);
+    };
+  }, [props.onClose]);
+
+  const cardHeight = cardRef.current?.offsetHeight ?? 260;
+  const containerHeight = visibleBottomWithinContainer(props.containerRef.current);
+  const below = props.anchorRect.top + props.anchorRect.height + 6;
+  const top = below + cardHeight <= containerHeight
+    ? below
+    : Math.max(0, props.anchorRect.top - cardHeight - 6);
+  const containerWidth = props.containerRef.current?.clientWidth ?? 320;
+  const left = Math.max(0, Math.min(props.anchorRect.left, containerWidth - 320));
+  const submitComposer = () => {
+    const body = composer.trim();
+    if (body && !createThread.isPending && props.baseRevisionId) createThread.mutate(body);
+  };
+
+  return (
+    <div
+      ref={cardRef}
+      role="dialog"
+      aria-label={props.pendingAnchor ? "Add annotation comment" : "Annotation thread"}
+      data-testid="document-annotation-popover"
+      className="absolute z-(--z-20) w-80 max-w-full rounded-lg border border-border bg-popover text-popover-foreground shadow-xl"
+      style={{ top, left }}
+    >
+      {mutationError ? <p className="border-b border-border bg-destructive/10 px-3 py-2 text-xs text-destructive">{mutationError}</p> : null}
+      {props.pendingAnchor ? (
+        <div className="p-3">
+          <blockquote className="mb-2 line-clamp-2 rounded-md bg-muted px-2 py-1 text-xs italic text-muted-foreground">
+            {truncate(props.pendingAnchor.selectedText, 120)}
+          </blockquote>
+          <Textarea
+            ref={composerRef}
+            data-testid="document-annotation-popover-composer"
+            rows={3}
+            value={composer}
+            onChange={(event) => setComposer(event.target.value)}
+            onKeyDown={(event) => {
+              if (event.key === "Enter" && (event.metaKey || event.ctrlKey)) {
+                event.preventDefault();
+                submitComposer();
+              }
+            }}
+            placeholder="Write a comment…"
+            disabled={props.newCommentDisabled || createThread.isPending}
+            className="resize-y text-sm"
+          />
+          <div className="mt-2 flex justify-end gap-2">
+            <Button type="button" size="sm" variant="ghost" onClick={props.onClose}>Cancel</Button>
+            <Button type="button" size="sm" disabled={!composer.trim() || createThread.isPending || props.newCommentDisabled || !props.baseRevisionId} onClick={submitComposer}>
+              {createThread.isPending ? "Posting…" : "Comment"}
+            </Button>
+          </div>
+        </div>
+      ) : props.thread ? (
+        <ul className="p-2">
+          <ThreadCard
+            thread={props.thread}
+            expanded
+            focusedCommentId={props.focusedCommentId}
+            onFocus={() => props.onFocusThread(props.thread!.id)}
+            replyDraft={reply}
+            onReplyChange={setReply}
+            onSubmitReply={() => {
+              const body = reply.trim();
+              if (body) addReply.mutate({ threadId: props.thread!.id, body });
+            }}
+            onResolveToggle={() => updateStatus.mutate({ threadId: props.thread!.id, status: props.thread!.status === "resolved" ? "open" : "resolved" })}
+            onCopyLink={() => copyAnnotationLink(props.documentKey, props.thread!.id)}
+            pendingReply={addReply.isPending}
+            pendingStatus={updateStatus.isPending}
+            agentMap={props.agentMap}
+            userProfileMap={props.userProfileMap}
+          />
+        </ul>
+      ) : null}
+    </div>
+  );
+}
+
+function visibleBottomWithinContainer(container: HTMLElement | null): number {
+  if (!container || typeof window === "undefined") return Number.POSITIVE_INFINITY;
+  const containerRect = container.getBoundingClientRect();
+  let visibleBottom = window.innerHeight;
+  let parent = container.parentElement;
+  while (parent) {
+    const style = window.getComputedStyle(parent);
+    if ([style.overflow, style.overflowY].some((value) => value === "auto" || value === "scroll" || value === "hidden" || value === "clip")) {
+      visibleBottom = Math.min(visibleBottom, parent.getBoundingClientRect().bottom);
+    }
+    parent = parent.parentElement;
+  }
+  return visibleBottom - containerRect.top;
+}
diff --git a/ui/src/components/InlineEntitySelector.test.tsx b/ui/src/components/InlineEntitySelector.test.tsx
index 8d4c3e1cce..dbe7354fca 100644
--- a/ui/src/components/InlineEntitySelector.test.tsx
+++ b/ui/src/components/InlineEntitySelector.test.tsx
@@ -135,4 +135,89 @@ describe("InlineEntitySelector", () => {
       root.unmount();
     });
   });
+
+  it("does not open the popover when disabled", async () => {
+    const root = createRoot(container);
+    const onChange = vi.fn();
+
+    act(() => {
+      root.render(
+        <InlineEntitySelector
+          value=""
+          options={[{ id: "agent:agent-1", label: "CodexCoder" }]}
+          placeholder="Responsible"
+          noneLabel="No responsible"
+          searchPlaceholder="Search responsible..."
+          emptyMessage="No responsible found."
+          onChange={onChange}
+          disabled
+        />,
+      );
+    });
+
+    const trigger = container.querySelector("button") as HTMLButtonElement | null;
+    expect(trigger).not.toBeNull();
+    expect(trigger?.disabled).toBe(true);
+
+    await act(async () => {
+      trigger?.dispatchEvent(new MouseEvent("click", { bubbles: true }));
+    });
+
+    expect(document.querySelector('input[placeholder="Search responsible..."]')).toBeNull();
+    expect(onChange).not.toHaveBeenCalled();
+
+    act(() => {
+      root.unmount();
+    });
+  });
+
+  it("filters options as the user types in the search box", async () => {
+    const root = createRoot(container);
+    const onChange = vi.fn();
+
+    act(() => {
+      root.render(
+        <InlineEntitySelector
+          value=""
+          options={[
+            { id: "agent:agent-1", label: "CodexCoder" },
+            { id: "agent:agent-2", label: "DesignBot" },
+          ]}
+          placeholder="Responsible"
+          noneLabel="No responsible"
+          searchPlaceholder="Search responsible..."
+          emptyMessage="No responsible found."
+          onChange={onChange}
+        />,
+      );
+    });
+
+    const trigger = container.querySelector("button") as HTMLButtonElement | null;
+    await act(async () => {
+      trigger?.dispatchEvent(new MouseEvent("click", { bubbles: true }));
+    });
+
+    const searchInput = document.querySelector('input[placeholder="Search responsible..."]') as HTMLInputElement | null;
+    expect(searchInput).not.toBeNull();
+
+    const nativeInputValue = Object.getOwnPropertyDescriptor(
+      window.HTMLInputElement.prototype,
+      "value",
+    )?.set;
+    await act(async () => {
+      nativeInputValue?.call(searchInput, "design");
+      searchInput?.dispatchEvent(new Event("input", { bubbles: true }));
+    });
+
+    const optionLabels = Array.from(document.querySelectorAll("[role='dialog'] button, .max-h-56 button")).map(
+      (el) => el.textContent ?? "",
+    );
+    const joined = optionLabels.join("|");
+    expect(joined).toContain("DesignBot");
+    expect(joined).not.toContain("CodexCoder");
+
+    act(() => {
+      root.unmount();
+    });
+  });
 });
diff --git a/ui/src/components/InlineEntitySelector.tsx b/ui/src/components/InlineEntitySelector.tsx
index 316899d16b..53853c73b4 100644
--- a/ui/src/components/InlineEntitySelector.tsx
+++ b/ui/src/components/InlineEntitySelector.tsx
@@ -27,6 +27,10 @@ interface InlineEntitySelectorProps {
   disablePortal?: boolean;
   /** Open the popover when the trigger receives keyboard/programmatic focus. */
   openOnFocus?: boolean;
+  /** Disable the trigger and prevent the popover from opening. */
+  disabled?: boolean;
+  /** Optional test id forwarded to the trigger button. */
+  triggerTestId?: string;
 }
 
 const EMPTY_RECENT_OPTION_IDS: string[] = [];
@@ -48,6 +52,8 @@ export const InlineEntitySelector = forwardRef<HTMLButtonElement, InlineEntitySe
       recentOptionIds = EMPTY_RECENT_OPTION_IDS,
       disablePortal,
       openOnFocus = true,
+      disabled = false,
+      triggerTestId,
     },
     ref,
   ) {
@@ -104,6 +110,7 @@ export const InlineEntitySelector = forwardRef<HTMLButtonElement, InlineEntitySe
       <Popover
         open={open}
         onOpenChange={(next) => {
+          if (disabled) return;
           setOpen(next);
           if (!next) setQuery("");
         }}
@@ -112,12 +119,15 @@ export const InlineEntitySelector = forwardRef<HTMLButtonElement, InlineEntitySe
           <button
             ref={ref}
             type="button"
+            disabled={disabled}
+            data-testid={triggerTestId}
             className={cn(
-              "inline-flex min-w-0 items-center gap-1 rounded-md border border-border bg-muted/40 px-2 py-1 text-sm font-medium text-foreground transition-colors hover:bg-accent/50 focus-visible:outline-none focus-visible:ring-2 focus-visible:ring-ring",
+              "inline-flex min-w-0 items-center gap-1 rounded-md border border-border bg-muted/40 px-2 py-1 text-sm font-medium text-foreground transition-colors hover:bg-accent/50 focus-visible:outline-none focus-visible:ring-2 focus-visible:ring-ring disabled:opacity-50 disabled:pointer-events-none",
               className,
             )}
             onPointerDown={() => { isPointerDownRef.current = true; }}
             onFocus={() => {
+              if (disabled) return;
               if (openOnFocus && !isPointerDownRef.current) setOpen(true);
               isPointerDownRef.current = false;
             }}
diff --git a/ui/src/components/IssueDocumentAnnotations.test.tsx b/ui/src/components/IssueDocumentAnnotations.test.tsx
index f83694c19a..7f573ab4e3 100644
--- a/ui/src/components/IssueDocumentAnnotations.test.tsx
+++ b/ui/src/components/IssueDocumentAnnotations.test.tsx
@@ -100,7 +100,8 @@ vi.mock("./DocumentAnnotationLayer", () => ({
   DocumentAnnotationLayer: (props: {
     newCommentDisabled?: boolean;
     onPendingAnchorChange: (anchor: typeof mockPendingAnchor | null) => void;
-    onRequestComment: (anchor: typeof mockPendingAnchor) => void;
+    onRequestComment: (anchor: typeof mockPendingAnchor, rect: { top: number; left: number; width: number; height: number }) => void;
+    onThreadFocus: (threadId: string, rect: { top: number; left: number; width: number; height: number }) => void;
   }) => (
     <>
       <button
@@ -109,12 +110,19 @@ vi.mock("./DocumentAnnotationLayer", () => ({
         disabled={props.newCommentDisabled}
         onClick={() => {
           props.onPendingAnchorChange(mockPendingAnchor);
-          props.onRequestComment(mockPendingAnchor);
+          props.onRequestComment(mockPendingAnchor, { top: 24, left: 32, width: 80, height: 18 });
           props.onPendingAnchorChange(null);
         }}
       >
         Mock selection
       </button>
+      <button
+        type="button"
+        data-testid="mock-annotation-thread"
+        onClick={() => props.onThreadFocus("thread-1", { top: 42, left: 48, width: 90, height: 18 })}
+      >
+        Mock thread
+      </button>
       <button
         type="button"
         data-testid="mock-annotation-selection-only"
@@ -294,7 +302,7 @@ function Harness({
   historicalPreview?: boolean;
   locationHash?: string;
   initialPanelOpen?: boolean;
-  panelPlacement?: "floating" | "inline";
+  panelPlacement?: "floating" | "inline" | "popover";
 }) {
   const [open, setOpen] = useState(initialPanelOpen);
   return (
@@ -366,8 +374,11 @@ describe("IssueDocumentAnnotations", () => {
     expect(panel).not.toBeNull();
     const anchor = container.querySelector('[data-testid="document-annotation-panel-anchor"]');
     expect(anchor).not.toBeNull();
-    expect(anchor?.className).toContain("fixed");
-    expect(anchor?.className).toContain("z-(--z-60)");
+    // The desktop panel docks into an in-flow gutter column beside the doc; it no
+    // longer floats over the viewport with position: fixed (PAP-504).
+    expect(anchor?.className).not.toContain("fixed");
+    expect(anchor?.className).toContain("lg:block");
+    expect(anchor?.querySelector(".sticky")).not.toBeNull();
   });
 
   it("stacks an inline panel below the document instead of floating over its host", async () => {
@@ -394,114 +405,62 @@ describe("IssueDocumentAnnotations", () => {
     expect(panel?.className).toContain("w-full");
   });
 
-  it("keeps the desktop annotation panel inside the issue content area when properties are visible", async () => {
+  it("opens anchored compose and thread popovers in popover placement", async () => {
     mockAnnotationsApi.list.mockResolvedValue([makeThread()]);
-    const originalGetBoundingClientRect = HTMLElement.prototype.getBoundingClientRect;
-    const rectFor = (left: number, top: number, right: number, bottom: number) => ({
-      x: left,
-      y: top,
-      left,
-      top,
-      right,
-      bottom,
-      width: right - left,
-      height: bottom - top,
-      toJSON: () => ({}),
-    });
-    const rectSpy = vi.spyOn(HTMLElement.prototype, "getBoundingClientRect").mockImplementation(function (this: HTMLElement) {
-      if (this instanceof HTMLElement && this.id === "main-content") {
-        return rectFor(0, 0, 900, 800);
-      }
-      if (
-        this instanceof HTMLElement
-        && this.getAttribute("data-testid") === "document-annotation-body-plan"
-      ) {
-        return rectFor(80, 120, 640, 620);
-      }
-      return originalGetBoundingClientRect.call(this);
-    });
-
     const root = createRoot(container);
     const queryClient = makeQueryClient();
-    const doc = makeDoc();
-
-    try {
-      await act(async () => {
-        root.render(
-          <QueryClientProvider client={queryClient}>
-            <main id="main-content">
-              <Harness doc={doc} initialPanelOpen />
-            </main>
-          </QueryClientProvider>,
-        );
-      });
-      await waitFor(() => {
-        const anchor = container.querySelector('[data-testid="document-annotation-panel-anchor"]') as HTMLElement | null;
-        const panel = container.querySelector('[data-testid="document-annotation-panel"]') as HTMLElement | null;
-        expect(anchor).not.toBeNull();
-        expect(panel).not.toBeNull();
-        expect(anchor!.style.left).toBe("524px");
-        expect(anchor!.style.width).toBe("360px");
-        expect(panel!.style.width).toBe("360px");
-        expect(parseFloat(anchor!.style.left) + parseFloat(anchor!.style.width)).toBeLessThanOrEqual(884);
-      });
-    } finally {
-      rectSpy.mockRestore();
-    }
+    await act(async () => {
+      root.render(
+        <QueryClientProvider client={queryClient}>
+          <Harness doc={makeDoc()} panelPlacement="popover" />
+        </QueryClientProvider>,
+      );
+    });
+    await waitFor(() => expect(container.querySelector('[data-testid="mock-annotation-selection"]')).not.toBeNull());
+    await act(async () => (container.querySelector('[data-testid="mock-annotation-selection"]') as HTMLButtonElement).click());
+    await waitFor(() => {
+      expect(container.querySelector('[data-testid="document-annotation-popover"]')).not.toBeNull();
+      expect(container.querySelector('[data-testid="document-annotation-popover-composer"]')).not.toBeNull();
+      expect(container.querySelector('[data-testid="document-annotation-panel-inline"]')).toBeNull();
+    });
+    await act(async () => (container.querySelector('[aria-label="Add annotation comment"] button') as HTMLButtonElement).click());
+    await act(async () => (container.querySelector('[data-testid="mock-annotation-thread"]') as HTMLButtonElement).click());
+    await waitFor(() => {
+      expect(container.querySelector('[data-testid="document-annotation-popover"] [data-thread-id="thread-1"]')).not.toBeNull();
+    });
   });
 
-  it("offsets the desktop annotation panel from the document with a left margin when there is room", async () => {
+  it("docks the desktop annotation panel into an in-flow gutter column beside the document", async () => {
     mockAnnotationsApi.list.mockResolvedValue([makeThread()]);
-    const originalGetBoundingClientRect = HTMLElement.prototype.getBoundingClientRect;
-    const rectFor = (left: number, top: number, right: number, bottom: number) => ({
-      x: left,
-      y: top,
-      left,
-      top,
-      right,
-      bottom,
-      width: right - left,
-      height: bottom - top,
-      toJSON: () => ({}),
-    });
-    const rectSpy = vi.spyOn(HTMLElement.prototype, "getBoundingClientRect").mockImplementation(function (this: HTMLElement) {
-      if (this instanceof HTMLElement && this.id === "main-content") {
-        return rectFor(0, 0, 1400, 800);
-      }
-      if (
-        this instanceof HTMLElement
-        && this.getAttribute("data-testid") === "document-annotation-body-plan"
-      ) {
-        return rectFor(80, 120, 640, 620);
-      }
-      return originalGetBoundingClientRect.call(this);
-    });
-
     const root = createRoot(container);
     const queryClient = makeQueryClient();
     const doc = makeDoc();
 
-    try {
-      await act(async () => {
-        root.render(
-          <QueryClientProvider client={queryClient}>
-            <main id="main-content">
-              <Harness doc={doc} initialPanelOpen />
-            </main>
-          </QueryClientProvider>,
-        );
-      });
-      await waitFor(() => {
-        const anchor = container.querySelector('[data-testid="document-annotation-panel-anchor"]') as HTMLElement | null;
-        expect(anchor).not.toBeNull();
-        // The document body ends at 640; the panel should clear it with a margin
-        // rather than sitting flush against the document's right edge.
-        expect(parseFloat(anchor!.style.left)).toBeGreaterThan(640);
-        expect(anchor!.style.left).toBe("664px");
-      });
-    } finally {
-      rectSpy.mockRestore();
-    }
+    await act(async () => {
+      root.render(
+        <QueryClientProvider client={queryClient}>
+          <main id="main-content">
+            <Harness doc={doc} initialPanelOpen />
+          </main>
+        </QueryClientProvider>,
+      );
+    });
+    await waitFor(() => {
+      const anchor = container.querySelector('[data-testid="document-annotation-panel-anchor"]') as HTMLElement | null;
+      const panel = container.querySelector('[data-testid="document-annotation-panel"]') as HTMLElement | null;
+      expect(anchor).not.toBeNull();
+      expect(panel).not.toBeNull();
+      // Gutter column: fixed width, in normal flow (no absolute/fixed positioning),
+      // and its host row is a flex layout so the doc sits to its left.
+      expect(anchor!.style.width).toBe("360px");
+      expect(anchor!.className).not.toContain("fixed");
+      expect(anchor!.style.left).toBe("");
+      const host = container.querySelector(".paperclip-doc-annotation-host") as HTMLElement | null;
+      expect(host!.className).toContain("lg:flex");
+      // The panel is sticky inside the gutter so it stays beside the doc while scrolling.
+      expect(anchor!.querySelector(".sticky")).not.toBeNull();
+      expect(panel!.style.width).toBe("360px");
+    });
   });
 
   it("auto-opens the panel and focuses the thread when deep-linked", async () => {
diff --git a/ui/src/components/IssueDocumentAnnotations.tsx b/ui/src/components/IssueDocumentAnnotations.tsx
index d7b1beeb40..49a2a0f04b 100644
--- a/ui/src/components/IssueDocumentAnnotations.tsx
+++ b/ui/src/components/IssueDocumentAnnotations.tsx
@@ -12,14 +12,15 @@ import {
   isSelectionDebugEnabled,
   recordAnnotationCommit,
 } from "@/lib/document-annotation-debug";
-import { DocumentAnnotationLayer, type PendingAnchor } from "./DocumentAnnotationLayer";
+import { DocumentAnnotationLayer, type AnnotationAnchorRect, type PendingAnchor } from "./DocumentAnnotationLayer";
 import { DocumentAnnotationPanel } from "./DocumentAnnotationPanel";
+import { DocumentAnnotationPopover } from "./DocumentAnnotationPopover";
 import type { CompanyUserProfile } from "@/lib/company-members";
 
+// Width of the right-hand comment gutter on desktop (lg+). The gutter is an
+// in-flow flex column beside the document, so it scrolls with the doc instead
+// of floating over the viewport (PAP-504).
 const DESKTOP_ANNOTATION_PANEL_WIDTH = 360;
-const DESKTOP_ANNOTATION_PANEL_MIN_WIDTH = 280;
-const DESKTOP_ANNOTATION_PANEL_GAP = 24;
-const DESKTOP_ANNOTATION_PANEL_VIEWPORT_MARGIN = 16;
 
 type AnnotationDocument = Pick<IssueDocument, "key" | "latestRevisionId" | "latestRevisionNumber">;
 
@@ -43,7 +44,7 @@ export interface IssueDocumentAnnotationsProps {
   panelOpen: boolean;
   onPanelOpenChange: (open: boolean) => void;
   /** Keep the panel in document flow for narrow hosts such as the task properties pane. */
-  panelPlacement?: "floating" | "inline";
+  panelPlacement?: "floating" | "inline" | "popover";
   agentMap?: ReadonlyMap<string, Pick<Agent, "id" | "name"> & Partial<Pick<Agent, "icon">>>;
   userProfileMap?: ReadonlyMap<string, CompanyUserProfile>;
   /** Seed which thread is focused on mount. Used by Storybook/screenshot harness. */
@@ -82,13 +83,8 @@ export function IssueDocumentAnnotations({
   const [focusedCommentId, setFocusedCommentId] = useState<string | null>(null);
   const [selectionAnchor, setSelectionAnchor] = useState<PendingAnchor | null>(null);
   const [composerAnchor, setComposerAnchor] = useState<PendingAnchor | null>(null);
+  const [popoverAnchorRect, setPopoverAnchorRect] = useState<AnnotationAnchorRect | null>(null);
   const [isMobile, setIsMobile] = useState(false);
-  const [desktopPanelFrame, setDesktopPanelFrame] = useState<{
-    left: number;
-    top: number;
-    maxHeight: number;
-    width: number;
-  } | null>(null);
   const hashHandledRef = useRef<string | null>(null);
   // Bus token to ask the body layer to capture the current selection into a pendingAnchor.
   const [captureSelectionRequestId, setCaptureSelectionRequestId] = useState(0);
@@ -106,74 +102,6 @@ export function IssueDocumentAnnotations({
     return undefined;
   }, []);
 
-  useEffect(() => {
-    if (!panelOpen || panelPlacement === "inline" || isMobile || typeof window === "undefined") {
-      setDesktopPanelFrame(null);
-      return;
-    }
-
-    const updatePanelFrame = () => {
-      const container = containerRef.current;
-      const rect = container?.getBoundingClientRect();
-      if (!container || !rect) {
-        setDesktopPanelFrame(null);
-        return;
-      }
-      const boundaryRect = container.closest("main")?.getBoundingClientRect();
-      const boundaryLeft = boundaryRect?.left ?? 0;
-      const boundaryRight = boundaryRect?.right ?? window.innerWidth;
-      const boundaryWidth = Math.max(0, boundaryRight - boundaryLeft);
-      const maxPanelWidth = Math.max(
-        DESKTOP_ANNOTATION_PANEL_MIN_WIDTH,
-        boundaryWidth - DESKTOP_ANNOTATION_PANEL_VIEWPORT_MARGIN * 2,
-      );
-      const desiredWidth = Math.min(DESKTOP_ANNOTATION_PANEL_WIDTH, maxPanelWidth);
-      // Clamp the panel below the sticky top nav (the scroll container's top edge)
-      // so the comments thread never tucks under the nav bar while scrolling.
-      const boundaryTop = boundaryRect?.top ?? DESKTOP_ANNOTATION_PANEL_VIEWPORT_MARGIN;
-      const minTop = Math.max(DESKTOP_ANNOTATION_PANEL_VIEWPORT_MARGIN, boundaryTop)
-        + DESKTOP_ANNOTATION_PANEL_VIEWPORT_MARGIN;
-      const top = Math.max(minTop, rect.top);
-      const desiredLeft = rect.right + DESKTOP_ANNOTATION_PANEL_GAP;
-      const spaceRightOfDocument = boundaryRight
-        - desiredLeft
-        - DESKTOP_ANNOTATION_PANEL_VIEWPORT_MARGIN;
-      const width = spaceRightOfDocument >= DESKTOP_ANNOTATION_PANEL_MIN_WIDTH
-        ? Math.min(desiredWidth, spaceRightOfDocument)
-        : desiredWidth;
-      const maxVisibleLeft = boundaryRight
-        - width
-        - DESKTOP_ANNOTATION_PANEL_VIEWPORT_MARGIN;
-      setDesktopPanelFrame({
-        left: Math.max(
-          boundaryLeft + DESKTOP_ANNOTATION_PANEL_VIEWPORT_MARGIN,
-          Math.min(desiredLeft, maxVisibleLeft),
-        ),
-        top,
-        width,
-        maxHeight: Math.max(240, window.innerHeight - top - DESKTOP_ANNOTATION_PANEL_VIEWPORT_MARGIN),
-      });
-    };
-
-    updatePanelFrame();
-    window.addEventListener("resize", updatePanelFrame);
-    window.addEventListener("scroll", updatePanelFrame, true);
-    const resizeObserver = typeof window.ResizeObserver === "function"
-      ? new window.ResizeObserver(updatePanelFrame)
-      : null;
-    const observedContainer = containerRef.current;
-    if (resizeObserver && observedContainer) {
-      resizeObserver.observe(observedContainer);
-      const main = observedContainer.closest("main");
-      if (main) resizeObserver.observe(main);
-    }
-    return () => {
-      window.removeEventListener("resize", updatePanelFrame);
-      window.removeEventListener("scroll", updatePanelFrame, true);
-      resizeObserver?.disconnect();
-    };
-  }, [doc.key, isMobile, panelOpen, panelPlacement]);
-
   const annotationsQuery = useQuery({
     queryKey: target?.kind === "routine"
       ? queryKeys.routines.documentAnnotations(target.routineId, target.documentKey, "all")
@@ -213,17 +141,26 @@ export function IssueDocumentAnnotations({
 
   const handleSelectionAnchorChange = useCallback((anchor: PendingAnchor | null) => {
     setSelectionAnchor(anchor);
-  }, []);
+    if (anchor && panelPlacement === "popover") {
+      setComposerAnchor(null);
+      setFocusedThreadId(null);
+      setPopoverAnchorRect(null);
+      onPanelOpenChange(false);
+    }
+  }, [onPanelOpenChange, panelPlacement]);
 
   const handleClearComposerAnchor = useCallback(() => {
     setSelectionAnchor(null);
     setComposerAnchor(null);
+    setPopoverAnchorRect(null);
   }, []);
 
-  const handleRequestComment = useCallback((anchor: PendingAnchor) => {
+  const handleRequestComment = useCallback((anchor: PendingAnchor, rect?: AnnotationAnchorRect) => {
     if (newCommentDisabled) return;
     setSelectionAnchor(null);
     setComposerAnchor(anchor);
+    setFocusedThreadId(null);
+    if (rect) setPopoverAnchorRect(rect);
     onPanelOpenChange(true);
   }, [newCommentDisabled, onPanelOpenChange]);
 
@@ -237,14 +174,20 @@ export function IssueDocumentAnnotations({
     onInitialComposerAnchorConsumed?.();
   }, [initialComposerAnchor, newCommentDisabled, onInitialComposerAnchorConsumed, onPanelOpenChange]);
 
-  const handleThreadFocus = useCallback((threadId: string | null) => {
+  const handleThreadFocus = useCallback((threadId: string | null, rect?: AnnotationAnchorRect) => {
     setFocusedThreadId(threadId);
     if (threadId) {
+      setComposerAnchor(null);
+      if (rect) setPopoverAnchorRect(rect);
       onPanelOpenChange(true);
       setFocusedCommentId(null);
     }
   }, [onPanelOpenChange]);
 
+  const handleAnchorRectChange = useCallback((rect: AnnotationAnchorRect | null) => {
+    setPopoverAnchorRect((current) => isSameAnchorRect(current, rect) ? current : rect);
+  }, []);
+
   const handleRequestCommentFromSelection = useCallback(() => {
     if (newCommentDisabled) return;
     if (selectionAnchor) {
@@ -286,29 +229,13 @@ export function IssueDocumentAnnotations({
     [allThreads],
   );
 
-  const fallbackDesktopPanelFrame = useMemo(() => {
-    if (!panelOpen || panelPlacement === "inline" || isMobile || desktopPanelFrame || typeof window === "undefined") return null;
-    const width = Math.min(
-      DESKTOP_ANNOTATION_PANEL_WIDTH,
-      Math.max(
-        DESKTOP_ANNOTATION_PANEL_MIN_WIDTH,
-        window.innerWidth - DESKTOP_ANNOTATION_PANEL_VIEWPORT_MARGIN * 2,
-      ),
-    );
-    return {
-      left: Math.max(
-        DESKTOP_ANNOTATION_PANEL_VIEWPORT_MARGIN,
-        window.innerWidth - width - DESKTOP_ANNOTATION_PANEL_VIEWPORT_MARGIN,
-      ),
-      top: DESKTOP_ANNOTATION_PANEL_VIEWPORT_MARGIN,
-      maxHeight: Math.max(
-        240,
-        window.innerHeight - DESKTOP_ANNOTATION_PANEL_VIEWPORT_MARGIN * 2,
-      ),
-      width,
-    };
-  }, [desktopPanelFrame, isMobile, panelOpen, panelPlacement]);
-  const renderedDesktopPanelFrame = desktopPanelFrame ?? fallbackDesktopPanelFrame;
+  const isInlinePlacement = panelPlacement === "inline";
+  const isPopoverPlacement = panelPlacement === "popover";
+  const showPopover = panelOpen && isPopoverPlacement && !isMobile
+    && Boolean(popoverAnchorRect && (composerAnchor || focusedThread));
+  // On desktop (lg+) the panel docks into an in-flow gutter column beside the
+  // document so it scrolls with the doc rather than floating over the viewport.
+  const showDesktopGutter = panelOpen && !isInlinePlacement && !isPopoverPlacement && !isMobile;
 
   const annotationPanel = panelOpen ? (
     <DocumentAnnotationPanel
@@ -341,20 +268,27 @@ export function IssueDocumentAnnotations({
       newCommentDisabled={newCommentDisabled}
       newCommentDisabledReason={newCommentDisabledReason}
       isMobile={isMobile}
-      inline={panelPlacement === "inline"}
-      desktopWidth={renderedDesktopPanelFrame?.width}
+      inline={isInlinePlacement || isPopoverPlacement}
+      desktopWidth={showDesktopGutter ? DESKTOP_ANNOTATION_PANEL_WIDTH : undefined}
       agentMap={agentMap}
       userProfileMap={userProfileMap}
     />
   ) : null;
 
   const content = (
-    <div className="paperclip-doc-annotation-host relative">
+    <div
+      className={cn(
+        "paperclip-doc-annotation-host relative",
+        // Docked desktop gutter: lay the doc and the comment column side by side
+        // so the panel is part of the document's scroll flow (Google-Docs style).
+        showDesktopGutter && "lg:flex lg:items-stretch lg:gap-6",
+      )}
+    >
       <section
         ref={(element) => {
           containerRef.current = element;
         }}
-        className="relative min-w-0"
+        className={cn("relative min-w-0", showDesktopGutter && "lg:flex-1")}
         data-testid={`document-annotation-body-${doc.key}`}
       >
         <div className="relative z-(--z-1)">
@@ -370,6 +304,9 @@ export function IssueDocumentAnnotations({
             pendingAnchor={selectionAnchor}
             onPendingAnchorChange={handleSelectionAnchorChange}
             onRequestComment={handleRequestComment}
+            onAnchorRectChange={isPopoverPlacement && panelOpen && (composerAnchor || focusedThreadId)
+              ? handleAnchorRectChange
+              : undefined}
             newCommentDisabled={newCommentDisabled}
             newCommentDisabledReason={newCommentDisabledReason}
             hideResolved
@@ -377,24 +314,52 @@ export function IssueDocumentAnnotations({
             pendingHighlightText={composerAnchor?.selectedText ?? null}
           />
         ) : null}
+        {showPopover && popoverAnchorRect ? (
+          <DocumentAnnotationPopover
+            anchorRect={popoverAnchorRect}
+            containerRef={containerRef}
+            target={target ?? { kind: "issue", issueId, documentKey: doc.key }}
+            documentKey={doc.key}
+            baseRevisionId={doc.latestRevisionId}
+            baseRevisionNumber={doc.latestRevisionNumber}
+            pendingAnchor={composerAnchor}
+            thread={focusedThread as DocumentAnnotationThreadWithComments | null}
+            focusedCommentId={focusedCommentId}
+            onFocusThread={setFocusedThreadId}
+            onClose={() => {
+              setComposerAnchor(null);
+              setFocusedThreadId(null);
+              setFocusedCommentId(null);
+              setPopoverAnchorRect(null);
+              onPanelOpenChange(false);
+            }}
+            onThreadCreated={() => {
+              setComposerAnchor(null);
+              setPopoverAnchorRect(null);
+              onPanelOpenChange(false);
+            }}
+            newCommentDisabled={newCommentDisabled}
+            agentMap={agentMap}
+            userProfileMap={userProfileMap}
+          />
+        ) : null}
       </section>
-      {panelOpen && panelPlacement === "inline" && !isMobile ? (
+      {panelOpen && (isInlinePlacement || (isPopoverPlacement && !showPopover)) && !isMobile ? (
         <div className="mt-3" data-testid="document-annotation-panel-inline">
           {annotationPanel}
         </div>
       ) : null}
-      {panelOpen && !isMobile && renderedDesktopPanelFrame ? (
+      {showDesktopGutter ? (
         <div
           data-testid="document-annotation-panel-anchor"
-          className="pointer-events-auto fixed z-(--z-60) hidden lg:block"
-          style={{
-            left: renderedDesktopPanelFrame.left,
-            maxHeight: renderedDesktopPanelFrame.maxHeight,
-            top: renderedDesktopPanelFrame.top,
-            width: renderedDesktopPanelFrame.width,
-          }}
+          className="hidden shrink-0 lg:block"
+          style={{ width: DESKTOP_ANNOTATION_PANEL_WIDTH }}
         >
-          {annotationPanel}
+          {/* Sticky within the gutter: stays beside the highlighted range while
+              the document is on screen, then scrolls away with the doc. */}
+          <div className="sticky top-4">
+            {annotationPanel}
+          </div>
         </div>
       ) : null}
       {panelOpen && isMobile ? annotationPanel : null}
@@ -408,6 +373,10 @@ export function IssueDocumentAnnotations({
   ) : content;
 }
 
+function isSameAnchorRect(a: AnnotationAnchorRect | null, b: AnnotationAnchorRect | null): boolean {
+  return a === b || Boolean(a && b && a.top === b.top && a.left === b.left && a.width === b.width && a.height === b.height);
+}
+
 export interface DocumentAnnotationsCountChipProps {
   issueId: string;
   docKey: string;
diff --git a/ui/src/components/IssueProperties.test.tsx b/ui/src/components/IssueProperties.test.tsx
index 17a210d53f..c4c37a9053 100644
--- a/ui/src/components/IssueProperties.test.tsx
+++ b/ui/src/components/IssueProperties.test.tsx
@@ -789,7 +789,13 @@ describe("IssueProperties", () => {
     act(() => root.unmount());
   });
 
-  it("always exposes the add sub-issue action", async () => {
+  it("exposes the classic-layout add sub-issue pill action", async () => {
+    // The chat shell hosts the full tree in the center pane; the slim pill row
+    // + its Add sub-task button only render in the classic layout (PAP-496).
+    mockInstanceSettingsApi.getExperimental.mockResolvedValue({
+      enableTaskWatchdogs: false,
+      enableClassicTaskInterface: true,
+    });
     const onAddSubIssue = vi.fn();
     const root = renderProperties(container, {
       issue: createIssue(),
@@ -797,10 +803,13 @@ describe("IssueProperties", () => {
       onAddSubIssue,
       onUpdate: vi.fn(),
     });
-    await flush();
+    // Wait for the classic-layout settings query to resolve (the pane starts in
+    // the chat shell until it does).
+    await waitForAssertion(() => {
+      expect(container.textContent).toContain("Add sub-task");
+    });
 
     expect(container.textContent).toContain("Sub-tasks");
-    expect(container.textContent).toContain("Add sub-task");
 
     const addButton = Array.from(container.querySelectorAll("button"))
       .find((button) => button.textContent?.includes("Add sub-task"));
@@ -815,6 +824,20 @@ describe("IssueProperties", () => {
     act(() => root.unmount());
   });
 
+  it("does not duplicate sub-tasks in the properties pane in the chat shell", async () => {
+    const root = renderProperties(container, {
+      issue: createIssue(),
+      childIssues: [],
+      onUpdate: vi.fn(),
+    });
+    await flush();
+
+    expect(container.textContent).not.toContain("Add sub-task");
+    expect(container.textContent).not.toContain("Sub-tasks");
+
+    act(() => root.unmount());
+  });
+
   it("hides watchdog setup controls while the experimental flag is off", async () => {
     const root = renderProperties(container, {
       issue: createIssue(),
@@ -1114,6 +1137,12 @@ describe("IssueProperties", () => {
   });
 
   it("collapses long blocked-by and sub-task lists until the more button is clicked", async () => {
+    // The sub-task pill row (with its collapse control) is classic-layout only
+    // now — the chat shell promotes sub-tasks to their own pane tab (PAP-496).
+    mockInstanceSettingsApi.getExperimental.mockResolvedValue({
+      enableTaskWatchdogs: false,
+      enableClassicTaskInterface: true,
+    });
     const blockedBy = Array.from({ length: 7 }, (_, index) => ({
       id: `blocker-${index + 1}`,
       identifier: `BLOCK-${index + 1}`,
@@ -1134,11 +1163,14 @@ describe("IssueProperties", () => {
       onUpdate: vi.fn(),
       inline: true,
     });
-    await flush();
+    // Wait for the classic-layout settings query to resolve so the sub-task
+    // pill row renders (the pane starts in the chat shell until it does).
+    await waitForAssertion(() => {
+      expect(container.textContent).toContain("SUB-5");
+    });
 
     expect(container.textContent).toContain("BLOCK-5");
     expect(container.textContent).not.toContain("BLOCK-6");
-    expect(container.textContent).toContain("SUB-5");
     expect(container.textContent).not.toContain("SUB-6");
     expect(
       Array.from(container.querySelectorAll("button")).filter((button) =>
diff --git a/ui/src/components/Layout.tsx b/ui/src/components/Layout.tsx
index 4ba5d97589..a838fea1ec 100644
--- a/ui/src/components/Layout.tsx
+++ b/ui/src/components/Layout.tsx
@@ -1,4 +1,4 @@
-import { useCallback, useEffect, useLayoutEffect, useMemo, useRef, useState } from "react";
+import { useCallback, useEffect, useLayoutEffect, useMemo, useRef, useState, type CSSProperties } from "react";
 import { useQuery } from "@tanstack/react-query";
 import { Outlet, useLocation, useNavigate, useNavigationType, useParams } from "@/lib/router";
 import { Sidebar } from "./Sidebar";
@@ -637,6 +637,20 @@ export function Layout() {
               id="main-content"
               ref={mainContentRef}
               tabIndex={-1}
+              // Publish the pinned-composer bottom offset to descendants
+              // (PAP-495): while the auto-hiding mobile nav is on screen, raise
+              // it to the nav height so a sticky composer clears the nav; drop
+              // it back to the safe-area dock when the nav hides. Desktop leaves
+              // the token at its :root default.
+              style={
+                isMobile
+                  ? ({
+                      "--tc-composer-bottom": mobileNavVisible
+                        ? "var(--sz-calc-14)"
+                        : "var(--sz-calc-8)",
+                    } as CSSProperties)
+                  : undefined
+              }
               className={cn(
                 "flex-1 p-4 outline-none md:p-6",
                 // Reserve the scrollbar gutter on desktop so pages whose height
diff --git a/ui/src/components/TaskChatThread.test.tsx b/ui/src/components/TaskChatThread.test.tsx
index 017287071d..2976c504e4 100644
--- a/ui/src/components/TaskChatThread.test.tsx
+++ b/ui/src/components/TaskChatThread.test.tsx
@@ -9,12 +9,13 @@ import { ThemeProvider } from "@/context/ThemeContext";
 import { TaskChatThread } from "./TaskChatThread";
 
 const transcriptState = vi.hoisted(() => ({ transcriptByRun: new Map() }));
+const sidebarState = vi.hoisted(() => ({ isMobile: false }));
 
 vi.mock("@/components/transcript/useLiveRunTranscripts", () => ({
   useLiveRunTranscripts: () => transcriptState,
 }));
 vi.mock("@/context/SidebarContext", () => ({
-  useSidebar: () => ({ isMobile: false }),
+  useSidebar: () => ({ isMobile: sidebarState.isMobile }),
 }));
 vi.mock("@/hooks/useIssuePlanDocument", () => ({
   useIssuePlanDocument: () => ({ data: null }),
@@ -35,6 +36,7 @@ let root: Root | null = null;
 beforeEach(() => {
   localStorage.clear();
   transcriptState.transcriptByRun.clear();
+  sidebarState.isMobile = false;
   container = document.createElement("div");
   document.body.appendChild(container);
   root = createRoot(container);
@@ -68,6 +70,38 @@ describe("TaskChatThread draft pass-through", () => {
   });
 });
 
+describe("TaskChatThread composer alignment (PAP-498)", () => {
+  it("keeps the composer dock at 80% of the thread width", () => {
+    render(<TaskChatThread comments={[]} onAdd={async () => {}} />);
+
+    const dock = container
+      .querySelector('[data-testid="mock-editor"]')
+      ?.closest("div.sticky") as HTMLElement | null;
+
+    expect(dock?.className).toContain("w-(--pct-80)");
+    expect(dock?.className).not.toContain("w-full");
+  });
+});
+
+describe("TaskChatThread mobile composer dock (PAP-495)", () => {
+  it("pins the composer to the nav-aware bottom offset so its action row clears the auto-hiding bottom nav", () => {
+    sidebarState.isMobile = true;
+
+    render(<TaskChatThread comments={[]} onAdd={async () => {}} draftKey="task-chat-draft:issue-mobile" />);
+
+    const dock = container
+      .querySelector('[data-testid="mock-editor"]')
+      ?.closest("div.sticky") as HTMLElement | null;
+
+    expect(dock).not.toBeNull();
+    // Bottom offset comes from --tc-composer-bottom (Layout raises it to the nav
+    // height while the nav is on screen) — NOT the raw safe-area dock, which is
+    // what let the nav occlude the action row before PAP-495.
+    expect(dock?.className).toContain("bottom-(--tc-composer-bottom)");
+    expect(dock?.className).not.toContain("bottom-(--sz-calc-8)");
+  });
+});
+
 describe("TaskChatThread live transcript", () => {
   it("renders in-flight output through TaskChatLiveTail, dropping the debug plumbing (PAP-463 C1)", () => {
     // Interleave the exact noise the old RunTranscriptView tail surfaced (init
@@ -108,8 +142,11 @@ describe("TaskChatThread live transcript", () => {
 
     const tail = container.querySelector('[data-testid="task-chat-live-transcript"]');
     expect(tail).not.toBeNull();
-    // Clean content survives: streamed reply markdown + tool row.
+    // Clean content survives: streamed reply markdown + compact phase summary.
     expect(tail!.textContent).toContain("Streaming through the shared renderer");
+    const phaseSummary = tail!.querySelector<HTMLButtonElement>('[data-testid="task-chat-phase-summary"]');
+    expect(phaseSummary?.getAttribute("aria-expanded")).toBe("false");
+    flushSync(() => phaseSummary!.click());
     expect(tail!.textContent).toContain("src/app.ts");
     // None of the debug plumbing reaches the thread.
     for (const noise of ["INITMARKER", "SYSTEMNOISE", "STDOUTNOISE", "STDERRNOISE"]) {
diff --git a/ui/src/components/TaskChatThread.tsx b/ui/src/components/TaskChatThread.tsx
index 740cc4d08c..30e60a025a 100644
--- a/ui/src/components/TaskChatThread.tsx
+++ b/ui/src/components/TaskChatThread.tsx
@@ -42,10 +42,8 @@ import { useWindowAutoFollow } from "@/components/task-chat/useWindowAutoFollow"
 import { useSidebar } from "@/context/SidebarContext";
 import { cn } from "@/lib/utils";
 import { useIssuePlanDocument } from "@/hooks/useIssuePlanDocument";
-import { latestSameRunHandoffTimestamp, type IssueChatComment } from "@/lib/issue-chat-messages";
+import { latestSameRunHandoffTimestamp } from "@/lib/issue-chat-messages";
 import { isLiveIssueRun, isTerminalIssueStatus } from "@/lib/liveIssueIds";
-import { workModeInEffectAt } from "@/lib/issue-timeline-events";
-import { workModeMetaFor } from "@/lib/work-mode-meta";
 
 function toMs(value: Date | string | null | undefined): number {
   if (!value) return 0;
@@ -119,7 +117,6 @@ export function TaskChatThread(props: TaskChatThreadProps) {
     onSubmitInteractionVerdicts,
     externalReferences,
     threadHeader,
-    workModeChanges,
     issueBrief,
     feedbackVotes,
     feedbackDataSharingPreference = "prompt",
@@ -134,27 +131,14 @@ export function TaskChatThread(props: TaskChatThreadProps) {
     return map;
   }, [linkedRuns]);
 
-  // Each agent reply is tagged with the mode its request ran under: the
-  // issue's work mode at the reply's run start (comment.runId linkage),
-  // reconstructed from the activity feed's work-mode switch history — not the
-  // issue's current mode, which the user may have changed since.
-  const agentModeLabelFor = useCallback(
-    (comment: IssueChatComment) => {
-      const runMeta = comment.runId ? linkedRunMetaById.get(comment.runId) : undefined;
-      const atMs = toMs(runMeta?.startedAt ?? runMeta?.createdAt ?? comment.createdAt);
-      return workModeMetaFor(workModeInEffectAt(workModeChanges ?? [], atMs, issueWorkMode)).label;
-    },
-    [linkedRunMetaById, workModeChanges, issueWorkMode],
-  );
   const commentItems = useMemo(
     () => commentsToTaskChatItems(comments, {
       agentMap,
       userLabelMap,
       currentUserId,
       issueAssigneeAgentId,
-      agentModeLabelFor,
     }),
-    [comments, agentMap, userLabelMap, currentUserId, issueAssigneeAgentId, agentModeLabelFor],
+    [comments, agentMap, userLabelMap, currentUserId, issueAssigneeAgentId],
   );
 
   // Every run we might need a transcript for (history + live), deduped by id.
@@ -629,10 +613,20 @@ export function TaskChatThread(props: TaskChatThreadProps) {
           className={cn(
             "sticky",
             // Mobile mirrors the flag-off thread's dock: lifted above the
-            // safe-area inset (and clear of the auto-hiding bottom nav), above
-            // page content in the document-flow stacking context.
-            isMobile ? "bottom-(--sz-calc-8) z-20" : "bottom-0 z-10",
-            "mx-auto flex w-full max-w-(--tc-shell-max-w) flex-col gap-2 bg-background/80 px-1 pb-2 pt-1 backdrop-blur supports-[backdrop-filter]:bg-background/60",
+            // safe-area inset and clear of the auto-hiding bottom nav, above
+            // page content in the document-flow stacking context. The bottom
+            // offset (--tc-composer-bottom) tracks the nav: Layout raises it to
+            // the nav height while the nav is visible so the composer's action
+            // row is never occluded, and drops it back to the safe-area dock
+            // when the nav auto-hides (PAP-495). transition-[bottom] rides the
+            // nav's own 200ms slide; the offset only changes on nav toggles, so
+            // it never animates mid-scroll.
+            isMobile
+              ? "bottom-(--tc-composer-bottom) z-20 transition-[bottom] duration-200 ease-out"
+              : "bottom-0 z-10",
+            // Keep the composer visibly narrower than the thread while its
+            // accessories and footer continue to share the same column.
+            "mx-auto flex w-(--pct-80) max-w-(--tc-shell-max-w) flex-col gap-2 bg-background/80 px-4 pb-2 pt-1 backdrop-blur supports-[backdrop-filter]:bg-background/60",
           )}
         >
           {composerAccessory}
diff --git a/ui/src/components/issue-properties/IssueProperties.tsx b/ui/src/components/issue-properties/IssueProperties.tsx
index 17f13aac63..ff32ed668c 100644
--- a/ui/src/components/issue-properties/IssueProperties.tsx
+++ b/ui/src/components/issue-properties/IssueProperties.tsx
@@ -2231,30 +2231,35 @@ export function IssueProperties({
           )}
         </PropertyRow>
 
-        <PropertyRow label="Sub-tasks" wrap>
-          <div className="flex flex-wrap items-center gap-1.5">
-            {childIssues.length > 0
-              ? visibleChildIssues.map((child) => (
-                <IssueReferencePill key={child.id} issue={child} />
-              ))
-              : null}
-            <ExpandRelationListButton
-              hiddenCount={hiddenChildIssueCount}
-              expanded={subTasksExpanded}
-              onClick={() => setSubTasksExpanded((expanded) => !expanded)}
-            />
-            {onAddSubIssue ? (
-              <button
-                type="button"
-                className="inline-flex items-center gap-1 rounded-full border border-border px-2 py-0.5 text-xs text-muted-foreground transition-colors hover:bg-accent/50 hover:text-foreground"
-                onClick={onAddSubIssue}
-              >
-                <Plus className="h-3 w-3" />
-                Add sub-task
-              </button>
-            ) : null}
-          </div>
-        </PropertyRow>
+        {/* Chat shell promotes sub-tasks to their own pane tab (the full tree),
+            so the slim pill row here would duplicate that home (PAP-496). Keep
+            the pill row only for the classic center-column layout. */}
+        {taskChatShellEnabled ? null : (
+          <PropertyRow label="Sub-tasks" wrap>
+            <div className="flex flex-wrap items-center gap-1.5">
+              {childIssues.length > 0
+                ? visibleChildIssues.map((child) => (
+                  <IssueReferencePill key={child.id} issue={child} />
+                ))
+                : null}
+              <ExpandRelationListButton
+                hiddenCount={hiddenChildIssueCount}
+                expanded={subTasksExpanded}
+                onClick={() => setSubTasksExpanded((expanded) => !expanded)}
+              />
+              {onAddSubIssue ? (
+                <button
+                  type="button"
+                  className="inline-flex items-center gap-1 rounded-full border border-border px-2 py-0.5 text-xs text-muted-foreground transition-colors hover:bg-accent/50 hover:text-foreground"
+                  onClick={onAddSubIssue}
+                >
+                  <Plus className="h-3 w-3" />
+                  Add sub-task
+                </button>
+              ) : null}
+            </div>
+          </PropertyRow>
+        )}
 
         {relatedTasks.length > 0 ? (
           <PropertyRow label="Related tasks" wrap>
@@ -2563,7 +2568,8 @@ export function IssueProperties({
   // Fall back to Properties if the selected tab's content went away (or the
   // selection was made on another issue).
   const activePaneTab =
-    (paneTab === "plans" && !hasPlanTab) || (paneTab === "artifacts" && !hasArtifactsTab)
+    (paneTab === "plans" && !hasPlanTab)
+    || (paneTab === "artifacts" && !hasArtifactsTab)
       ? "properties"
       : paneTab;
   // In the pane header the strip stretches to the bar's full height and the
diff --git a/ui/src/components/issue-properties/IssuePropertiesPlansTab.tsx b/ui/src/components/issue-properties/IssuePropertiesPlansTab.tsx
index 48379670c8..904e49b628 100644
--- a/ui/src/components/issue-properties/IssuePropertiesPlansTab.tsx
+++ b/ui/src/components/issue-properties/IssuePropertiesPlansTab.tsx
@@ -113,7 +113,7 @@ export function IssuePropertiesPlansTab({ issue }: IssuePropertiesPlansTabProps)
             locationHash={location.hash}
             panelOpen={annotationPanelOpen}
             onPanelOpenChange={setAnnotationPanelOpen}
-            panelPlacement="inline"
+            panelPlacement="popover"
           >
             <MarkdownBody>{planDocument.body}</MarkdownBody>
           </IssueDocumentAnnotations>
diff --git a/ui/src/components/task-chat/TaskChatActivityPhase.test.tsx b/ui/src/components/task-chat/TaskChatActivityPhase.test.tsx
new file mode 100644
index 0000000000..ff4124cba6
--- /dev/null
+++ b/ui/src/components/task-chat/TaskChatActivityPhase.test.tsx
@@ -0,0 +1,27 @@
+// @vitest-environment jsdom
+import { flushSync } from "react-dom";
+import { createRoot } from "react-dom/client";
+import { afterEach, describe, expect, it } from "vitest";
+import { TaskChatActivityPhase } from "./TaskChatActivityPhase";
+
+describe("TaskChatActivityPhase", () => {
+  afterEach(() => { document.body.innerHTML = ""; });
+  it("defaults collapsed, exposes aria state, and unmounts collapsed children", () => {
+    const container = document.createElement("div");
+    document.body.appendChild(container);
+    const root = createRoot(container);
+    flushSync(() => root.render(<TaskChatActivityPhase item={{
+      id: "phase-1", kind: "activity_phase", active: false, summary: "Read 1 file",
+      items: [{ id: "tool-1", kind: "tool", name: "Read", status: "completed" }],
+    }} renderChild={(child) => <button>{child.id}</button>} />));
+    const summary = container.querySelector<HTMLButtonElement>('[data-testid="task-chat-phase-summary"]')!;
+    expect(summary.getAttribute("aria-expanded")).toBe("false");
+    expect(container.textContent).not.toContain("tool-1");
+    flushSync(() => summary.click());
+    expect(summary.getAttribute("aria-expanded")).toBe("true");
+    expect(container.textContent).toContain("tool-1");
+    flushSync(() => summary.click());
+    expect(container.querySelector('[data-testid="task-chat-phase-children"]')).toBeNull();
+    flushSync(() => root.unmount());
+  });
+});
diff --git a/ui/src/components/task-chat/TaskChatActivityPhase.tsx b/ui/src/components/task-chat/TaskChatActivityPhase.tsx
new file mode 100644
index 0000000000..aad8cec53b
--- /dev/null
+++ b/ui/src/components/task-chat/TaskChatActivityPhase.tsx
@@ -0,0 +1,46 @@
+import { useState, type ReactNode } from "react";
+import { ChevronRight } from "lucide-react";
+import { cn } from "@/lib/utils";
+import { MarkdownBody } from "@/components/MarkdownBody";
+import type { TaskChatActivityPhaseItem } from "./task-chat-model";
+
+export function TaskChatActivityPhase({
+  item,
+  renderChild,
+}: {
+  item: TaskChatActivityPhaseItem;
+  renderChild: (child: TaskChatActivityPhaseItem["items"][number]) => ReactNode;
+}) {
+  const [open, setOpen] = useState(false);
+  const expandable = item.items.length > 0;
+  return (
+    <div className="flex min-w-0 flex-col gap-1" data-testid="task-chat-activity-phase">
+      {item.interstitial ? (
+        <div className="min-w-0 px-1 text-sm text-foreground/90" data-testid="task-chat-phase-interstitial">
+          <MarkdownBody softBreaks linkIssueReferences>{item.interstitial.text}</MarkdownBody>
+        </div>
+      ) : null}
+      {expandable ? (
+        <button
+          type="button"
+          aria-expanded={open}
+          aria-label={`${open ? "Collapse" : "Expand"} activity: ${item.summary}`}
+          onClick={() => setOpen((value) => !value)}
+          className={cn(
+            "group flex min-w-0 items-center gap-1.5 rounded-sm px-1 py-0.5 text-left text-xs transition-colors hover:text-foreground focus-visible:outline-none focus-visible:ring-2 focus-visible:ring-ring",
+            item.active ? "text-foreground" : "text-muted-foreground",
+          )}
+          data-testid="task-chat-phase-summary"
+        >
+          <ChevronRight className={cn("h-3 w-3 shrink-0 transition-transform", open && "rotate-90")} aria-hidden />
+          <span className="min-w-0 break-words">{item.summary}</span>
+        </button>
+      ) : null}
+      {open ? (
+        <div className="flex min-w-0 flex-col gap-2 pl-2" data-testid="task-chat-phase-children">
+          {item.items.map((child) => <div className="min-w-0" key={child.id}>{renderChild(child)}</div>)}
+        </div>
+      ) : null}
+    </div>
+  );
+}
diff --git a/ui/src/components/task-chat/TaskChatBubble.test.tsx b/ui/src/components/task-chat/TaskChatBubble.test.tsx
index 875ee543cb..f5b6c6818a 100644
--- a/ui/src/components/task-chat/TaskChatBubble.test.tsx
+++ b/ui/src/components/task-chat/TaskChatBubble.test.tsx
@@ -108,6 +108,36 @@ describe("TaskChatBubble accent-bubble text color", () => {
   });
 });
 
+describe("TaskChatBubble agent page-surface treatment", () => {
+  it("renders agent prose without a card background or constrained width", () => {
+    const container = document.createElement("div");
+    document.body.appendChild(container);
+    const root = createRoot(container);
+
+    flushSync(() =>
+      root.render(
+        <ThemeProvider>
+          <TaskChatBubble
+            item={{ id: "agent-message", kind: "message", author: "agent", authorName: "Codex", text: "A long-form agent response" }}
+          />
+        </ThemeProvider>,
+      ),
+    );
+
+    const bubble = container.querySelector('[data-testid="task-chat-agent-bubble"]');
+    expect(bubble).not.toBeNull();
+    expect(bubble?.className).toContain("w-full");
+    expect(bubble?.className).toContain("bg-transparent");
+    expect(bubble?.className).toContain("px-1");
+    expect(bubble?.className).not.toContain("rounded-2xl");
+    expect(bubble?.className).not.toContain("bg-(--bubble-agent)");
+    expect(bubble?.className).not.toContain("max-w-(--pct-85)");
+
+    flushSync(() => root.unmount());
+    container.remove();
+  });
+});
+
 describe("TaskChatBubble interstitial self-talk (PAP-357)", () => {
   let container: HTMLDivElement;
   let root: Root | null = null;
diff --git a/ui/src/components/task-chat/TaskChatBubble.tsx b/ui/src/components/task-chat/TaskChatBubble.tsx
index 6da7a74318..16a00372ce 100644
--- a/ui/src/components/task-chat/TaskChatBubble.tsx
+++ b/ui/src/components/task-chat/TaskChatBubble.tsx
@@ -46,9 +46,9 @@ function initialsForName(name: string) {
 
 /**
  * Author-typed message row — the primary legibility signal. Human messages sit
- * right in a solid accent bubble; agent messages sit left in a neutral card
- * bubble with an avatar author header (the agent's assigned icon + name · mode
- * chip); system notices are centered and recede.
+ * right in a solid accent bubble; agent messages sit directly on the page
+ * surface with an avatar author header (the agent's assigned icon + name);
+ * system notices are centered and recede.
  */
 function galleryItemForImage(src: string, name?: string): GalleryMediaItem {
   return {
@@ -112,20 +112,19 @@ export function TaskChatBubble({ item, attachedTurn, actions }: TaskChatBubblePr
               userName={item.onBehalfOfUserName}
             />
           ) : null}
-          {item.modeLabel ? (
-            <span className="rounded-full border border-border px-2 py-px text-(length:--text-micro) font-medium text-muted-foreground">
-              {item.modeLabel}
-            </span>
-          ) : null}
         </span>
       ) : null}
       {bodyText.length > 0 ? (
         <div
+          // Stable hook so the TaskChatLab bubble-treatment explorations
+          // (PAP-501) can scope background/border overrides to the agent
+          // bubble body without touching the live thread.
+          data-testid={isHuman ? "task-chat-human-bubble" : "task-chat-agent-bubble"}
           className={cn(
-            "max-w-(--pct-85) break-words px-3.5 py-2 text-sm",
+            "break-words py-2 text-sm",
             isHuman
-              ? "rounded-2xl rounded-br-sm bg-(--liveness-blue) text-white"
-              : "rounded-2xl rounded-bl-sm bg-(--bubble-agent) text-foreground",
+              ? "max-w-(--pct-85) rounded-2xl rounded-br-sm bg-(--liveness-blue) px-3.5 text-white"
+              : "w-full bg-transparent px-1 text-foreground",
             item.optimistic ? "opacity-80" : null,
           )}
         >
diff --git a/ui/src/components/task-chat/TaskChatComposer.test.tsx b/ui/src/components/task-chat/TaskChatComposer.test.tsx
index 044f049f03..e82fa34f0b 100644
--- a/ui/src/components/task-chat/TaskChatComposer.test.tsx
+++ b/ui/src/components/task-chat/TaskChatComposer.test.tsx
@@ -244,6 +244,17 @@ function autocompleteOption(matchText: string) {
 }
 
 describe("TaskChatComposer", () => {
+  it("adds 10px to the composer's original 8px interior padding", () => {
+    render(<TaskChatComposer onAdd={async () => {}} workMode="standard" />);
+
+    const composer = container
+      .querySelector('[data-testid="task-chat-composer-input"]')
+      ?.parentElement;
+
+    expect(composer?.className).toContain("p-(--sz-18px)");
+    expect(composer?.className).not.toContain("p-2");
+  });
+
   it("submits the trimmed body on Cmd+Enter and clears the draft", async () => {
     const onAdd = vi.fn().mockResolvedValue(undefined);
     render(<TaskChatComposer onAdd={onAdd} workMode="standard" />);
diff --git a/ui/src/components/task-chat/TaskChatComposer.tsx b/ui/src/components/task-chat/TaskChatComposer.tsx
index 03056cf020..72ffd24261 100644
--- a/ui/src/components/task-chat/TaskChatComposer.tsx
+++ b/ui/src/components/task-chat/TaskChatComposer.tsx
@@ -28,7 +28,7 @@ import {
 import { fileKindForName, formatFileSize } from "./task-chat-attachments";
 import { MarkdownEditor, type MarkdownEditorRef } from "@/components/MarkdownEditor";
 import { nextWorkMode, workModeMetaFor, workModeMetaList } from "@/lib/work-mode-meta";
-import type { InlineEntityOption } from "@/components/InlineEntitySelector";
+import { InlineEntitySelector, type InlineEntityOption } from "@/components/InlineEntitySelector";
 import type { MentionOption } from "@/components/MarkdownEditor";
 import type { IssueAttachment, IssueWorkMode } from "@paperclipai/shared";
 
@@ -371,7 +371,7 @@ export function TaskChatComposer({
   return (
     <div
       className={cn(
-        "rounded-xl border border-input bg-card p-2 shadow-(--shadow-extract-7) transition-[border-color,box-shadow] focus-within:border-ring focus-within:ring-2 focus-within:ring-ring/15",
+        "rounded-xl border border-input bg-card p-(--sz-18px) shadow-(--shadow-extract-7) transition-[border-color,box-shadow] focus-within:border-ring focus-within:ring-2 focus-within:ring-ring/15",
       )}
       onKeyDownCapture={(e) => {
         // Shift+Tab cycles the pending mode; captured on the wrapper so it
@@ -523,27 +523,24 @@ export function TaskChatComposer({
         <div className="flex-1" />
 
         {showAssignee ? (
-          <DropdownMenu>
-            <DropdownMenuTrigger asChild>
-              <button
-                type="button"
-                disabled={disabled}
-                className="flex h-8 min-w-0 items-center gap-1.5 rounded-md border border-border px-2.5 text-xs font-medium text-foreground transition-colors hover:bg-accent disabled:opacity-50"
-                data-testid="task-chat-composer-assignee"
-              >
+          <InlineEntitySelector
+            value={assigneeValue}
+            options={reassignOptions ?? []}
+            placeholder="Assignee"
+            noneLabel="No assignee"
+            searchPlaceholder="Search assignees…"
+            emptyMessage="No matches."
+            onChange={setPendingAssignee}
+            disabled={disabled}
+            triggerTestId="task-chat-composer-assignee"
+            className="h-8 gap-1.5 bg-transparent px-2.5 text-xs hover:bg-accent"
+            renderTriggerValue={() => (
+              <>
                 <span className="max-w-40 truncate">{assigneeLabel}</span>
                 <ChevronDown className="h-3 w-3 shrink-0 text-muted-foreground" aria-hidden />
-              </button>
-            </DropdownMenuTrigger>
-            <DropdownMenuContent align="end" className="w-56">
-              {(reassignOptions ?? []).map((option) => (
-                <DropdownMenuItem key={option.id} onSelect={() => setPendingAssignee(option.id)}>
-                  <span className="min-w-0 flex-1 truncate">{option.label}</span>
-                  {option.id === assigneeValue ? <Check className="h-4 w-4 shrink-0" aria-hidden /> : null}
-                </DropdownMenuItem>
-              ))}
-            </DropdownMenuContent>
-          </DropdownMenu>
+              </>
+            )}
+          />
         ) : null}
 
         <button
diff --git a/ui/src/components/task-chat/TaskChatLiveTail.test.tsx b/ui/src/components/task-chat/TaskChatLiveTail.test.tsx
index 7a8523e7f7..57c4c20bb4 100644
--- a/ui/src/components/task-chat/TaskChatLiveTail.test.tsx
+++ b/ui/src/components/task-chat/TaskChatLiveTail.test.tsx
@@ -49,9 +49,12 @@ describe("TaskChatLiveTail", () => {
     ]);
     render(items);
 
-    expect(container.querySelector('[data-testid="task-chat-live-text"]')?.textContent).toContain(
+    expect(container.querySelector('[data-testid="task-chat-phase-interstitial"]')?.textContent).toContain(
       "Looking into the failing test.",
     );
+    const phaseSummary = container.querySelector<HTMLButtonElement>('[data-testid="task-chat-phase-summary"]');
+    expect(phaseSummary?.getAttribute("aria-expanded")).toBe("false");
+    flushSync(() => phaseSummary!.click());
     // Tool row renders with its name + mono target.
     expect(container.textContent).toContain("Read");
     expect(container.textContent).toContain("src/app.ts");
@@ -65,6 +68,9 @@ describe("TaskChatLiveTail", () => {
     ]);
     render(items);
 
+    const phaseSummary = container.querySelector<HTMLButtonElement>('[data-testid="task-chat-phase-summary"]');
+    expect(phaseSummary?.getAttribute("aria-expanded")).toBe("false");
+    flushSync(() => phaseSummary!.click());
     expect(container.textContent).toContain("const x = 1;");
     expect(container.textContent).toContain("+1 −1");
   });
@@ -95,6 +101,12 @@ describe("TaskChatLiveTail", () => {
     ]);
     render(items);
 
+    expect(container.querySelector('[data-testid="task-chat-phase-interstitial"]')?.textContent).toContain(
+      "Here is the real reply.",
+    );
+    const phaseSummary = container.querySelector<HTMLButtonElement>('[data-testid="task-chat-phase-summary"]');
+    expect(phaseSummary?.getAttribute("aria-expanded")).toBe("false");
+    flushSync(() => phaseSummary!.click());
     const text = container.textContent ?? "";
     expect(text).toContain("Here is the real reply.");
     expect(text).toContain("pnpm test");
diff --git a/ui/src/components/task-chat/TaskChatLiveTail.tsx b/ui/src/components/task-chat/TaskChatLiveTail.tsx
index ba652a0590..2bb9eb8514 100644
--- a/ui/src/components/task-chat/TaskChatLiveTail.tsx
+++ b/ui/src/components/task-chat/TaskChatLiveTail.tsx
@@ -3,6 +3,8 @@ import { MarkdownBody } from "@/components/MarkdownBody";
 import type { TaskChatItem } from "./task-chat-model";
 import { TaskChatToolCard } from "./TaskChatToolCard";
 import { TaskChatUsageReadout } from "./TaskChatUsageReadout";
+import { TaskChatActivityPhase } from "./TaskChatActivityPhase";
+import { buildActivityPhases } from "./transcript-adapter";
 
 /**
  * Live-tail body for the experimental chat-style view (PAP-463, Workstream C1
@@ -18,10 +20,9 @@ import { TaskChatUsageReadout } from "./TaskChatUsageReadout";
  * no "Streaming" chip, no uppercase "USED TERMINAL" cards. The status pill above
  * this body (`TaskChatLiveRunPill`) owns the run-status affordance.
  *
- * Live and settle-gap render identically — both feed their parsed items here
- * (`running: true` while in flight, `false` through the settle gap) — so the
- * tail never restyles when a run finishes; the hand-off to the folded settled
- * turn is the only visible transition.
+ * Stable assistant boundaries compact the rows into activity phases. The
+ * trailing streaming assistant chunk stays in the status pill's self-talk
+ * slot, while historical interstitials remain readable above their summaries.
  */
 export function TaskChatLiveTail({
   items,
@@ -31,7 +32,7 @@ export function TaskChatLiveTail({
   /** Shown when nothing renderable has streamed yet (queued / pre-first-token). */
   emptyMessage?: string;
 }) {
-  const rows = items
+  const rows = buildActivityPhases(items, true)
     .map((item) => renderTailRow(item))
     .filter((row): row is ReactElement => row != null);
 
@@ -76,6 +77,14 @@ function renderTailRow(item: TaskChatItem): ReactElement | null {
           <TaskChatUsageReadout item={item} />
         </div>
       );
+    case "activity_phase":
+      return (
+        <TaskChatActivityPhase
+          key={item.id}
+          item={item}
+          renderChild={(child) => child.kind === "tool" ? <TaskChatToolCard item={child} /> : <TaskChatUsageReadout item={child} />}
+        />
+      );
     // Thinking never renders as a row (PAP-361): its live signal is the status
     // pill, and the text stays in the run log / classic transcript. Every other
     // kind (markers, interactions, briefs, statuses, turns, and the dropped
diff --git a/ui/src/components/task-chat/TaskChatThreadView.tsx b/ui/src/components/task-chat/TaskChatThreadView.tsx
index 602ffad4fd..896715fba1 100644
--- a/ui/src/components/task-chat/TaskChatThreadView.tsx
+++ b/ui/src/components/task-chat/TaskChatThreadView.tsx
@@ -11,6 +11,7 @@ import { TaskChatMarker } from "./TaskChatMarker";
 import { TaskChatStatusPill } from "./TaskChatStatusPill";
 import { TaskChatToolCard } from "./TaskChatToolCard";
 import { TaskChatUsageReadout } from "./TaskChatUsageReadout";
+import { TaskChatActivityPhase } from "./TaskChatActivityPhase";
 import { TaskMessageScroller } from "./TaskMessageScroller";
 
 interface TaskChatThreadViewProps {
@@ -100,6 +101,8 @@ function renderItem(
       );
     case "usage":
       return <TaskChatUsageReadout item={item} />;
+    case "activity_phase":
+      return <TaskChatActivityPhase item={item} renderChild={(child) => renderItem(child, onApprovalDecision)} />;
     case "interaction":
       return renderInteraction ? renderInteraction(item) : null;
     case "brief":
@@ -138,7 +141,7 @@ export function TaskChatThreadView({
   scroll = true,
 }: TaskChatThreadViewProps) {
   const body = (
-    <div className={cn("mx-auto flex w-full max-w-(--tc-shell-max-w) flex-col gap-3 px-4 py-4", className)}>
+    <div className={cn("mx-auto flex w-full max-w-(--tc-shell-max-w) flex-col gap-5 px-4 py-4", className)}>
       {header ? (
         <div className="flex flex-col gap-6 pb-2" data-testid="task-chat-thread-header">
           {header}
@@ -181,6 +184,9 @@ function signatureOf(it: TaskChatItem): number {
       : 0;
     return it.items.reduce((n, child) => n + signatureOf(child), it.items.length + headerSig);
   }
+  if (it.kind === "activity_phase") {
+    return it.items.reduce((n, child) => n + signatureOf(child), it.summary.length + (it.interstitial?.text.length ?? 0));
+  }
   return 1;
 }
 
diff --git a/ui/src/components/task-chat/TaskChatTurn.tsx b/ui/src/components/task-chat/TaskChatTurn.tsx
index d66426a743..20455f89b7 100644
--- a/ui/src/components/task-chat/TaskChatTurn.tsx
+++ b/ui/src/components/task-chat/TaskChatTurn.tsx
@@ -97,7 +97,18 @@ export function TaskChatTurn({ item, renderChild, timestampPrefix, leading }: Ta
       <SummaryIcon className="h-3.5 w-3.5 shrink-0" />
       <span>{item.summary.failed ? "Stopped" : "Worked"}</span>
       {turnSummaryMetrics(item.summary) ? (
-        <span className="font-mono text-(length:--text-micro)">{turnSummaryMetrics(item.summary)}</span>
+        // Time/tools/tokens is demoted, not deleted (PAP-502): it stays in the
+        // DOM (and the accessible tree) but fades in only on hover/focus so the
+        // settled line reads as "2:34 PM · ✓ Worked" at rest. Revealed too when
+        // the fold is open, so the metrics don't vanish while you read below.
+        <span
+          className={cn(
+            "font-mono text-(length:--text-micro) transition-opacity group-hover:opacity-100 group-focus-visible:opacity-100",
+            open ? "opacity-100" : "opacity-0",
+          )}
+        >
+          {turnSummaryMetrics(item.summary)}
+        </span>
       ) : null}
       <ChevronRight className={cn("h-3 w-3 shrink-0 transition-transform", open ? "rotate-90" : null)} />
     </button>
diff --git a/ui/src/components/task-chat/TaskMessageScroller.test.tsx b/ui/src/components/task-chat/TaskMessageScroller.test.tsx
index 6180591710..29a07575d7 100644
--- a/ui/src/components/task-chat/TaskMessageScroller.test.tsx
+++ b/ui/src/components/task-chat/TaskMessageScroller.test.tsx
@@ -89,6 +89,13 @@ describe("TaskMessageScroller", () => {
     expect(el.scrollTop).toBe(el.scrollHeight);
   });
 
+  it("keeps the scrollbar at the full-width thread viewport edge", () => {
+    render();
+    const frame = scroller().parentElement;
+
+    expect(frame?.className).toBe("relative min-h-0 flex-1");
+  });
+
   it("auto-follows content instantly while pinned", async () => {
     render(1);
     const el = scroller();
diff --git a/ui/src/components/task-chat/task-chat-adapter.ts b/ui/src/components/task-chat/task-chat-adapter.ts
index db3edebbf7..0091444faf 100644
--- a/ui/src/components/task-chat/task-chat-adapter.ts
+++ b/ui/src/components/task-chat/task-chat-adapter.ts
@@ -21,12 +21,6 @@ export interface TaskChatAdapterContext {
    * writes and get a "for {user}" attribution chip (the open cross-task write design (attribution)).
    */
   issueAssigneeAgentId?: string | null;
-  /**
-   * Capitalized mode chip for agent-authored bubbles ("Agent mode" / "Plan
-   * mode" / "Ask mode") — resolved per comment, so each reply is tagged with
-   * the mode its request actually ran under (not the issue's current mode).
-   */
-  agentModeLabelFor?: (comment: IssueChatComment) => string | undefined;
 }
 
 function effectiveAgentId(comment: IssueChatComment): string | null {
@@ -98,7 +92,6 @@ export function commentsToTaskChatItems(
       optimistic,
       agentIcon,
       onBehalfOfUserName,
-      modeLabel: kind === "agent" ? ctx.agentModeLabelFor?.(comment) : undefined,
       // System notices carry their structured hints through to the render
       // layer (PAP-443); other authors keep the item lean.
       presentation: kind === "system" ? comment.presentation ?? null : undefined,
diff --git a/ui/src/components/task-chat/task-chat-fixtures.ts b/ui/src/components/task-chat/task-chat-fixtures.ts
index fd332908f7..36c7b03f30 100644
--- a/ui/src/components/task-chat/task-chat-fixtures.ts
+++ b/ui/src/components/task-chat/task-chat-fixtures.ts
@@ -50,7 +50,7 @@ export function buildScenario(id: TaskChatStateId): TaskChatScenario {
         surface: "thread",
         items: [
           ...exchangePrefix(),
-          { id: "m-agent-1", kind: "message", author: "agent", authorName: AGENT, agentIcon: "bot", modeLabel: "Agent mode", text: "On it — I'll add a token-bucket limiter and wire it into the login route.", timestamp: "2:31 PM" },
+          { id: "m-agent-1", kind: "message", author: "agent", authorName: AGENT, agentIcon: "bot", text: "On it — I'll add a token-bucket limiter and wire it into the login route.", timestamp: "2:31 PM" },
         ],
       };
     case "thinking":
@@ -207,7 +207,6 @@ export function buildScenario(id: TaskChatStateId): TaskChatScenario {
             author: "agent",
             authorName: AGENT,
             agentIcon: "bot",
-            modeLabel: "Agent mode",
             text: "Done — added a per-account token-bucket limiter and wired it into the login route. Tests pass.",
             timestamp: "2:34 PM",
             attachedTurn: {
@@ -243,6 +242,43 @@ export function buildScenario(id: TaskChatStateId): TaskChatScenario {
           },
         ],
       };
+    case "activity-phases": {
+      const phase = (id: string, text: string | undefined, active: boolean, tools: TaskChatItem[]) => ({
+        id,
+        kind: "activity_phase" as const,
+        active,
+        interstitial: text ? { id: `${id}:message`, kind: "message" as const, author: "agent" as const, authorName: AGENT, text, interstitial: true } : undefined,
+        items: tools.filter((item): item is Extract<TaskChatItem, { kind: "tool" | "usage" }> => item.kind === "tool" || item.kind === "usage"),
+        summary: active ? "Ran 1 command, called 1 tool" : id.endsWith("opening") ? "Called 2 tools" : "Read 3 files, edited 1 file",
+      });
+      return {
+        surface: "thread",
+        items: [
+          ...exchangePrefix(),
+          {
+            id: "turn-long-run", kind: "turn", settled: false,
+            summary: { toolCount: 8, added: 4, removed: 1 },
+            liveStatus: { id: "long-status", kind: "status", status: "working", label: "Running tests", detail: "Bash · vitest", toolName: "Bash", startedAtMs: Date.now() - 48_000 },
+            items: [
+              phase("phase-opening", undefined, false, [
+                { id: "generic-1", kind: "tool", name: "Tool", rawName: "tool call", status: "completed" },
+                { id: "generic-2", kind: "tool", name: "Tool", rawName: "acp_tool", status: "failed", detail: "Adapter interrupted" },
+              ]),
+              phase("phase-read", "I found the relevant adapter and am tracing its render boundary.", false, [
+                { id: "read-1", kind: "tool", name: "Read", status: "completed", target: "ui/src/components/task-chat/transcript-adapter.ts" },
+                { id: "read-2", kind: "tool", name: "Read", status: "completed", target: "ui/src/components/task-chat/TaskChatTurn.tsx" },
+                { id: "read-3", kind: "tool", name: "Read", status: "completed", target: "ui/src/components/task-chat/TaskChatThreadView.tsx" },
+                { id: "edit-1", kind: "tool", name: "Edit", status: "completed", target: "ui/src/components/task-chat/task-chat-model.ts" },
+              ]),
+              phase("phase-active", "The grouping is wired; I’m running focused checks now.", true, [
+                { id: "bash-1", kind: "tool", name: "Bash", status: "in_progress", target: "vitest task-chat" },
+                { id: "mcp-1", kind: "tool", name: "Search", rawName: "mcp__docs__search", status: "completed" },
+              ]),
+            ],
+          },
+        ],
+      };
+    }
     case "plan-todo":
       return { surface: "plan", items: [], plan: SAMPLE_PLAN };
     case "interrupted":
diff --git a/ui/src/components/task-chat/task-chat-model.ts b/ui/src/components/task-chat/task-chat-model.ts
index 9e60b01660..71d771fd02 100644
--- a/ui/src/components/task-chat/task-chat-model.ts
+++ b/ui/src/components/task-chat/task-chat-model.ts
@@ -70,11 +70,6 @@ export interface TaskChatMessageItem {
   streaming?: boolean;
   /** Optimistic local echo state (matches IssueChatComment.clientStatus). */
   optimistic?: "pending" | "queued";
-  /**
-   * Per-message mode tag ("Agent mode" / "Plan mode" / "Ask mode"). Shown as a
-   * chip in the agent header and under a sent human bubble (v6 decision).
-   */
-  modeLabel?: string;
   /** Assigned agent icon name (AgentIconName) for the avatar header. */
   agentIcon?: string | null;
   /**
@@ -201,6 +196,19 @@ export interface TaskChatUsageItem {
   usage: TaskChatTokenUsage;
 }
 
+export interface TaskChatActivityPhaseItem {
+  id: string;
+  kind: "activity_phase";
+  /** Historical assistant update that introduced this phase. */
+  interstitial?: TaskChatMessageItem;
+  /** Chronological tool/usage rows owned exclusively by this phase. */
+  items: Array<TaskChatToolItem | TaskChatUsageItem>;
+  /** Deterministic, taxonomy-based summary (for example "Read 3 files, ran 1 command"). */
+  summary: string;
+  /** The tail phase of an in-flight run stays foregrounded. */
+  active: boolean;
+}
+
 /**
  * The task description rendered as the requester's first chat bubble
  * (PAP-375). A placeholder kind only — the host supplies the render
@@ -232,7 +240,8 @@ export type TaskChatTurnChildItem =
   | TaskChatToolItem
   | TaskChatStatusItem
   | TaskChatMarkerItem
-  | TaskChatUsageItem;
+  | TaskChatUsageItem
+  | TaskChatActivityPhaseItem;
 
 /**
  * One agent turn's activity (thinking/tools/diffs) grouped so a finished turn
@@ -276,6 +285,7 @@ export type TaskChatItem =
   | TaskChatStatusItem
   | TaskChatMarkerItem
   | TaskChatUsageItem
+  | TaskChatActivityPhaseItem
   | TaskChatInteractionItem
   | TaskChatTurnItem
   | TaskChatBriefItem;
diff --git a/ui/src/components/task-chat/task-chat-states.ts b/ui/src/components/task-chat/task-chat-states.ts
index 0b808fda54..9f109ce45c 100644
--- a/ui/src/components/task-chat/task-chat-states.ts
+++ b/ui/src/components/task-chat/task-chat-states.ts
@@ -24,6 +24,7 @@ export const TASK_CHAT_STATES = [
   "working",
   "running",
   "completed",
+  "activity-phases",
   "awaiting-approval",
   "plan-todo",
   "interrupted",
@@ -124,6 +125,13 @@ export const TASK_CHAT_STATE_META: Record<TaskChatStateId, TaskChatStateMeta> =
     surface: "thread",
     protocol: "acpx.result (StopReason in subtype)",
   },
+  "activity-phases": {
+    id: "activity-phases",
+    label: "Long-run activity phases",
+    tier: "live",
+    surface: "thread",
+    protocol: "assistant boundaries + chronological tool calls",
+  },
   "awaiting-approval": {
     id: "awaiting-approval",
     label: "Awaiting approval",
diff --git a/ui/src/components/task-chat/transcript-adapter.test.ts b/ui/src/components/task-chat/transcript-adapter.test.ts
index 674656eb2d..a368195ac7 100644
--- a/ui/src/components/task-chat/transcript-adapter.test.ts
+++ b/ui/src/components/task-chat/transcript-adapter.test.ts
@@ -375,15 +375,35 @@ describe("settledRunChildren (PAP-361)", () => {
   ];
   const parsed = transcriptToTaskChatItems(transcript, { runId: "run-1", running: false });
 
-  it("keeps exactly the tool rows — messages AND thinking are excluded", () => {
+  it("groups tools under the historical assistant boundary and excludes the final reply", () => {
     const children = settledRunChildren(parsed);
-    expect(children.map((c) => c.kind)).toEqual(["tool", "tool"]);
+    expect(children.map((c) => c.kind)).toEqual(["activity_phase"]);
+    const phase = children[0];
+    expect(phase.kind === "activity_phase" && phase.interstitial?.text).toBe("Checking the adapter first.");
+    expect(phase.kind === "activity_phase" && phase.items.map((item) => item.kind)).toEqual(["tool", "tool"]);
   });
 
   it("matches the folded summary's tool count exactly (row-count parity)", () => {
     const children = settledRunChildren(parsed);
     const summary = buildTurnSummary(transcript);
-    expect(children.filter((c) => c.kind === "tool")).toHaveLength(summary.toolCount);
+    const phaseToolCount = children.reduce(
+      (count, child) => count + (child.kind === "activity_phase" ? child.items.filter((item) => item.kind === "tool").length : 0),
+      0,
+    );
+    expect(phaseToolCount).toBe(summary.toolCount);
+  });
+
+  it("creates a stable opening phase for calls before the first interstitial", () => {
+    const opening = transcriptToTaskChatItems([
+      toolCall("Read", { file_path: "a.ts" }),
+      { kind: "assistant", ts: TS, text: "Now editing." } as TranscriptEntry,
+      toolCall("Edit", { file_path: "a.ts" }),
+      { kind: "assistant", ts: TS, text: "Done." } as TranscriptEntry,
+    ], { runId: "run-opening", running: false });
+    const phases = settledRunChildren(opening);
+    expect(phases).toHaveLength(2);
+    expect(phases[0].id).toContain(":phase:opening");
+    expect(phases[1].kind === "activity_phase" && phases[1].summary).toBe("Edited 1 file");
   });
 });
 
diff --git a/ui/src/components/task-chat/transcript-adapter.ts b/ui/src/components/task-chat/transcript-adapter.ts
index 1745e8aa16..05748a28fd 100644
--- a/ui/src/components/task-chat/transcript-adapter.ts
+++ b/ui/src/components/task-chat/transcript-adapter.ts
@@ -8,6 +8,7 @@
 import type { TranscriptEntry } from "@/adapters";
 import type {
   TaskChatDiff,
+  TaskChatActivityPhaseItem,
   TaskChatItem,
   TaskChatToolItem,
   TaskChatTurnChildItem,
@@ -38,7 +39,7 @@ export function isTerminalRunStatus(status: string | undefined | null): boolean
  * in the thread outside.
  */
 export function isNestableLiveChild(item: TaskChatItem): item is TaskChatTurnChildItem {
-  return item.kind === "tool" || item.kind === "usage";
+  return item.kind === "tool" || item.kind === "usage" || item.kind === "activity_phase";
 }
 
 /**
@@ -328,18 +329,80 @@ export function transcriptToTaskChatItems(
 }
 
 /**
- * A settled run's nested children (PAP-361): exactly the tool rows (plus usage
- * readouts) in transcript order, under the "✓ Worked ·" summary — parity with
- * the summary's tool count. Messages are excluded: the final reply already
- * landed as the run's posted comment bubble, and interstitial updates are
- * ephemeral (they take the live line while streaming, then vanish). Thinking
- * is excluded too — the run log / classic transcript remain its archive.
+ * A settled run's nested children: activity phases containing chronological
+ * tool rows and their historical interstitial boundary. The final reply is
+ * excluded because its posted comment is canonical. Thinking stays in the
+ * run log / classic transcript.
  */
 export function settledRunChildren(parsed: readonly TaskChatItem[]): TaskChatTurnChildItem[] {
-  return parsed.filter(
-    (it): it is TaskChatTurnChildItem =>
-      it.kind !== "turn" && it.kind !== "message" && it.kind !== "thinking",
-  );
+  return buildActivityPhases(parsed, false);
+}
+
+function phaseSummary(items: readonly (TaskChatToolItem | { kind: "usage" })[]): string {
+  const counts = new Map<string, number>();
+  let generic = 0;
+  for (const item of items) {
+    if (item.kind !== "tool") continue;
+    if (isGenericToolName(item.rawName ?? item.name)) {
+      generic += 1;
+      continue;
+    }
+    const family = toolTaxonomy(item.rawName ?? item.name).family;
+    counts.set(family, (counts.get(family) ?? 0) + 1);
+  }
+  const phrases: string[] = [];
+  const add = (family: string, verb: string, singular: string, plural: string) => {
+    const count = counts.get(family) ?? 0;
+    if (count) phrases.push(`${verb} ${count} ${count === 1 ? singular : plural}`);
+  };
+  add("read", "Read", "file", "files");
+  add("edit", "Edited", "file", "files");
+  add("terminal", "Ran", "command", "commands");
+  const searched = (counts.get("grep") ?? 0) + (counts.get("search") ?? 0);
+  if (searched) phrases.push(`Searched ${searched} ${searched === 1 ? "time" : "times"}`);
+  const known = new Set(["read", "edit", "terminal", "grep", "search"]);
+  const other = [...counts].reduce((n, [family, count]) => n + (known.has(family) ? 0 : count), 0) + generic;
+  if (other) phrases.push(`Called ${other} ${other === 1 ? "tool" : "tools"}`);
+  return phrases.join(", ") || "No tool activity";
+}
+
+/** Segment parsed transcript rows at assistant boundaries with stable run-derived ids. */
+export function buildActivityPhases(
+  parsed: readonly TaskChatItem[],
+  running: boolean,
+): TaskChatActivityPhaseItem[] {
+  const phases: TaskChatActivityPhaseItem[] = [];
+  let current: TaskChatActivityPhaseItem | null = null;
+  const ensureOpening = (seed: string) => {
+    if (!current) {
+      current = { id: `${seed}:phase:opening`, kind: "activity_phase", items: [], summary: "", active: false };
+      phases.push(current);
+    }
+    return current;
+  };
+  const lastVisible = [...parsed].reverse().find((item) => item.kind !== "thinking");
+  for (const item of parsed) {
+    if (item.kind === "message") {
+      // A settled transcript's trailing assistant text is the posted reply.
+      // Live/settle-gap tails keep it visible until that canonical reply lands.
+      if (!running && item === lastVisible) continue;
+      current = {
+        id: `${item.id}:phase`,
+        kind: "activity_phase",
+        interstitial: item,
+        items: [],
+        summary: "",
+        active: false,
+      };
+      phases.push(current);
+    } else if (item.kind === "tool" || item.kind === "usage") {
+      ensureOpening(item.id).items.push(item);
+    }
+  }
+  for (const phase of phases) phase.summary = phaseSummary(phase.items);
+  const meaningful = phases.filter((phase) => phase.interstitial || phase.items.length > 0);
+  if (running && meaningful.length) meaningful[meaningful.length - 1].active = true;
+  return meaningful;
 }
 
 function formatDurationLabel(ms: number): string | undefined {
diff --git a/ui/src/hooks/useDocumentAnnotationMutations.ts b/ui/src/hooks/useDocumentAnnotationMutations.ts
new file mode 100644
index 0000000000..e5105b3e6c
--- /dev/null
+++ b/ui/src/hooks/useDocumentAnnotationMutations.ts
@@ -0,0 +1,130 @@
+import { useCallback, useMemo, useState } from "react";
+import { useMutation, useQuery, useQueryClient } from "@tanstack/react-query";
+import type { DocumentAnnotationComment, DocumentAnnotationThreadStatus, DocumentAnnotationThreadWithComments } from "@paperclipai/shared";
+import { authApi } from "@/api/auth";
+import { documentAnnotationsApi, type DocumentAnnotationTarget } from "@/api/document-annotations";
+import { queryKeys } from "@/lib/queryKeys";
+import type { PendingAnchor } from "@/components/DocumentAnnotationLayer";
+
+interface MutationOptions {
+  target: DocumentAnnotationTarget;
+  baseRevisionId: string | null;
+  baseRevisionNumber: number;
+  pendingAnchor: PendingAnchor | null;
+  onFocusThread: (threadId: string | null) => void;
+  onThreadCreated?: (thread: DocumentAnnotationThreadWithComments) => void;
+  onReplyAdded?: (threadId: string) => void;
+}
+
+export function useDocumentAnnotationMutations(options: MutationOptions) {
+  const queryClient = useQueryClient();
+  const [mutationError, setMutationError] = useState<string | null>(null);
+  const { data: session } = useQuery({
+    queryKey: queryKeys.auth.session,
+    queryFn: () => authApi.getSession(),
+    staleTime: 5 * 60_000,
+  });
+  const currentUser = useMemo(() => ({
+    id: session?.user?.id ?? null,
+    name: session?.user?.name?.trim() || session?.user?.email?.trim() || "You",
+    image: session?.user?.image ?? null,
+  }), [session]);
+  const queryKey = useMemo(() => options.target.kind === "routine"
+    ? queryKeys.routines.documentAnnotations(options.target.routineId, options.target.documentKey, "all")
+    : options.target.kind === "case"
+      ? queryKeys.cases.documentAnnotations(options.target.caseId, options.target.documentKey, "all")
+      : queryKeys.issues.documentAnnotations(options.target.issueId, options.target.documentKey, "all"), [options.target]);
+  const invalidateAll = useCallback(() => queryClient.invalidateQueries({
+    predicate: (query) => Array.isArray(query.queryKey)
+      && query.queryKey[1] === "document-annotations"
+      && query.queryKey[2] === (options.target.kind === "issue" ? options.target.issueId : options.target.kind === "case" ? options.target.caseId : options.target.routineId)
+      && query.queryKey[3] === options.target.documentKey,
+  }), [options.target, queryClient]);
+
+  const createThread = useMutation({
+    mutationFn: async (body: string) => {
+      if (!options.pendingAnchor) throw new Error("No selection to anchor to.");
+      if (!options.baseRevisionId) throw new Error("Document has no revision yet.");
+      return documentAnnotationsApi.createForTarget(options.target, {
+        baseRevisionId: options.baseRevisionId,
+        baseRevisionNumber: options.baseRevisionNumber,
+        selector: options.pendingAnchor.selector,
+        body,
+      });
+    },
+    onMutate: async (body) => {
+      if (!options.pendingAnchor || !options.baseRevisionId) return undefined;
+      setMutationError(null);
+      await queryClient.cancelQueries({ queryKey });
+      const previous = queryClient.getQueryData<DocumentAnnotationThreadWithComments[]>(queryKey);
+      const optimistic = buildOptimisticThread(body, options, currentUser);
+      queryClient.setQueryData<DocumentAnnotationThreadWithComments[]>(queryKey, (current) => [...(current ?? []), optimistic]);
+      options.onFocusThread(optimistic.id);
+      return { previous, optimisticId: optimistic.id };
+    },
+    onError: (error, _body, context) => {
+      if (context?.previous) queryClient.setQueryData(queryKey, context.previous);
+      setMutationError(messageFor(error, "Failed to create comment."));
+    },
+    onSuccess: (thread, _body, context) => {
+      queryClient.setQueryData<DocumentAnnotationThreadWithComments[]>(queryKey, (current) =>
+        (current ?? []).map((entry) => entry.id === context?.optimisticId ? thread : entry));
+      setMutationError(null);
+      options.onFocusThread(thread.id);
+      options.onThreadCreated?.(thread);
+    },
+    onSettled: invalidateAll,
+  });
+
+  const addReply = useMutation({
+    mutationFn: ({ threadId, body }: { threadId: string; body: string }) => documentAnnotationsApi.addCommentForTarget(options.target, threadId, { body }),
+    onMutate: async ({ threadId, body }) => {
+      setMutationError(null);
+      await queryClient.cancelQueries({ queryKey });
+      const previous = queryClient.getQueryData<DocumentAnnotationThreadWithComments[]>(queryKey);
+      const optimistic = buildOptimisticComment(body, threadId, options.target, currentUser.id);
+      queryClient.setQueryData<DocumentAnnotationThreadWithComments[]>(queryKey, (current) => (current ?? []).map((thread) =>
+        thread.id === threadId ? { ...thread, comments: [...thread.comments, optimistic], updatedAt: optimistic.createdAt } : thread));
+      return { previous };
+    },
+    onError: (error, _variables, context) => {
+      if (context?.previous) queryClient.setQueryData(queryKey, context.previous);
+      setMutationError(messageFor(error, "Failed to add reply."));
+    },
+    onSuccess: (_comment, variables) => {
+      setMutationError(null);
+      options.onReplyAdded?.(variables.threadId);
+    },
+    onSettled: invalidateAll,
+  });
+
+  const updateStatus = useMutation({
+    mutationFn: ({ threadId, status }: { threadId: string; status: DocumentAnnotationThreadStatus }) => documentAnnotationsApi.updateStatusForTarget(options.target, threadId, status),
+    onMutate: async ({ threadId, status }) => {
+      setMutationError(null);
+      await queryClient.cancelQueries({ queryKey });
+      const previous = queryClient.getQueryData<DocumentAnnotationThreadWithComments[]>(queryKey);
+      queryClient.setQueryData<DocumentAnnotationThreadWithComments[]>(queryKey, (current) => (current ?? []).map((thread) => thread.id === threadId ? { ...thread, status } : thread));
+      return { previous };
+    },
+    onError: (error, _variables, context) => {
+      if (context?.previous) queryClient.setQueryData(queryKey, context.previous);
+      setMutationError(messageFor(error, "Failed to update comment status."));
+    },
+    onSuccess: () => setMutationError(null),
+    onSettled: invalidateAll,
+  });
+  return { createThread, addReply, updateStatus, mutationError, currentUser };
+}
+
+function messageFor(error: unknown, fallback: string) { return error instanceof Error && error.message ? error.message : fallback; }
+function optimisticId(prefix: string) { return `${prefix}-${typeof crypto !== "undefined" && crypto.randomUUID ? crypto.randomUUID() : `${Date.now()}-${Math.random()}`}`; }
+function buildOptimisticComment(body: string, threadId: string, target: DocumentAnnotationTarget, userId: string | null): DocumentAnnotationComment {
+  const now = new Date();
+  return { id: optimisticId("optimistic-comment"), companyId: "", threadId, issueId: target.kind === "issue" ? target.issueId : null, routineId: target.kind === "routine" ? target.routineId : null, caseId: target.kind === "case" ? target.caseId : null, documentId: "", body, authorType: "user", authorAgentId: null, authorUserId: userId, createdByRunId: null, issueCommentId: null, createdAt: now, updatedAt: now };
+}
+function buildOptimisticThread(body: string, options: MutationOptions, user: { id: string | null }): DocumentAnnotationThreadWithComments {
+  const id = optimisticId("optimistic-thread");
+  const now = new Date();
+  return { id, issueId: options.target.kind === "issue" ? options.target.issueId : null, routineId: options.target.kind === "routine" ? options.target.routineId : null, caseId: options.target.kind === "case" ? options.target.caseId : null, documentKey: options.target.documentKey, status: "open", anchorState: "active", selectedText: options.pendingAnchor!.selectedText, normalizedStart: options.pendingAnchor!.selector.position.normalizedStart, markdownStart: options.pendingAnchor!.selector.position.markdownStart, originalRevisionId: options.baseRevisionId!, originalRevisionNumber: options.baseRevisionNumber, currentRevisionId: options.baseRevisionId!, currentRevisionNumber: options.baseRevisionNumber, createdByUserId: user.id, createdAt: now, updatedAt: now, comments: [buildOptimisticComment(body, id, options.target, user.id)] } as unknown as DocumentAnnotationThreadWithComments;
+}
diff --git a/ui/src/index.css b/ui/src/index.css
index 69db1e889b..b2db57da1b 100644
--- a/ui/src/index.css
+++ b/ui/src/index.css
@@ -260,8 +260,11 @@
   --tc-mode-plan: var(--status-task-todo);
   --tc-mode-ask: #3b82f6;
 
-  /* Agent-comment bubble fill (v7 grammar): quiet gray card, no border. */
-  --bubble-agent: oklch(0.955 0 0);
+  /* Agent-comment comparison fill used by TaskChatLab. The chosen production
+     treatment sits directly on the page surface; this token keeps the darker
+     card available as an explicit lab alternative. */
+  --bubble-agent: oklch(0.97 0 0);
+  --bubble-agent-card-padding-inline: 0.875rem;
 
   /* Redesigned thread viewport bound: lets the thread own its scroll (auto-
      follow + pinned composer) inside the page flow. The issue header lives
@@ -273,6 +276,13 @@
   /* Redesigned chat-shell column cap (phase 2c): one token caps the page
      wrapper, thread body, and pinned composer so they widen in lockstep. */
   --tc-shell-max-w: 60rem;
+
+  /* Mobile pinned-composer bottom offset (PAP-495). Default clears just the
+     safe-area inset (+20px); Layout raises it to the bottom-nav height
+     (--sz-calc-14) while the auto-hiding mobile nav is on screen, so the
+     composer's action row never hides behind the nav. Desktop and the classic
+     thread never override it and fall through to the safe-area default. */
+  --tc-composer-bottom: var(--sz-calc-8);
 }
 
 .dark {
@@ -284,7 +294,7 @@
   --popover-foreground: oklch(0.985 0 0);
   --primary: oklch(0.922 0 0);
   --primary-foreground: oklch(0.205 0 0);
-  --bubble-agent: oklch(0.24 0 0);
+  --bubble-agent: oklch(0.185 0 0);
   --secondary: oklch(0.269 0 0);
   --secondary-foreground: oklch(0.985 0 0);
   --muted: oklch(0.269 0 0);
@@ -464,6 +474,13 @@
 .scrollbar-auto-hide::-webkit-scrollbar-thumb {
   background: transparent !important;
 }
+
+/* The task-chat shell owns its desktop scroll viewport. Release Layout's
+   otherwise-useful reserved main scrollbar gutter so that viewport can meet
+   the properties-pane border instead of stopping one scrollbar-width early. */
+#main-content:has([data-task-chat-shell]) {
+  scrollbar-gutter: auto;
+}
 /* Light mode scrollbar on hover */
 .scrollbar-auto-hide:hover {
   scrollbar-color: oklch(0.7 0 0) transparent;
@@ -596,6 +613,43 @@
 .tc-approval { animation: tc-approval-pulse var(--motion-approval-pulse) var(--motion-ease-standard) infinite; }
 .tc-cursor { animation: tc-cursor-blink var(--motion-streaming-cursor-blink) step-end infinite; }
 .tc-enter-plan-entry { animation: tc-fade-rise var(--motion-plan-check) var(--motion-ease-out-expo) both; }
+
+/* ────────────────────────────────────────────────────────────────────────
+   Agent-bubble treatment explorations (PAP-501). Scoped to the TaskChatLab
+   stage via [data-bubble-variant]; the live thread never sets that attribute,
+   so these overrides remain lab-only comparisons. Feedback: the former
+   dark-mode agent card (oklch 0.24) read too light against the near-black page
+   for the bulk of the text. The production treatment now sits directly on
+   the page background; the card alternatives remain available for comparison.
+   ──────────────────────────────────────────────────────────────────────── */
+
+/* Former production treatment, retained as a direct before/after comparison
+   for the darker default. */
+[data-bubble-variant="former"] { --bubble-agent: oklch(0.955 0 0); }
+.dark [data-bubble-variant="former"] { --bubble-agent: oklch(0.24 0 0); }
+
+/* B · Hairline flush — near-page fill + a 1px hairline for gentle definition
+   without any brightness lift. */
+[data-bubble-variant="hairline"] { --bubble-agent: var(--background); }
+[data-bubble-variant="hairline"] [data-testid="task-chat-agent-bubble"] {
+  border: 1px solid var(--border);
+}
+.dark [data-bubble-variant="hairline"] { --bubble-agent: oklch(0.17 0 0); }
+.dark [data-bubble-variant="hairline"] [data-testid="task-chat-agent-bubble"] {
+  border-color: oklch(1 0 0 / 8%);
+}
+
+/* Card variants restore the shared card geometry that production no longer
+   applies to agent prose. */
+[data-bubble-variant="former"] [data-testid="task-chat-agent-bubble"],
+[data-bubble-variant="darker"] [data-testid="task-chat-agent-bubble"],
+[data-bubble-variant="hairline"] [data-testid="task-chat-agent-bubble"] {
+  background: var(--bubble-agent);
+  border-radius: var(--radius-2xl);
+  padding-left: var(--bubble-agent-card-padding-inline);
+  padding-right: var(--bubble-agent-card-padding-inline);
+  max-width: var(--pct-85);
+}
 /* Live-line viewport (PAP-361): exactly one line-height tall, clipping the
    wrapped interstitial block. On wrap, the inner block translates up whole
    line-heights (set inline as translateY(-(n−1)·1lh)) so the completed line
@@ -2156,6 +2210,7 @@ span.paperclip-mention-chip[data-mention-kind="external-object"] {
   --rad-24: 24px; /* Extracted from ui/src/pages/InviteUxLab.tsx (rounded-[24px]). */
   --rad-32: 32px; /* Extracted from ui/src/pages/InviteUxLab.tsx (rounded-[32px]). */
   --pct-90: 90%; /* Extracted from ui/src/components/DocumentDiffModal.tsx (max-w-[90%]). */
+  --pct-80: 80%; /* TaskChatThread composer width (PAP-498 follow-up). */
   --pct-50: 50%; /* Extracted from ui/src/components/ImageGalleryModal.tsx (max-w-[50%]). */
   --pct-85: 85%; /* Extracted from ui/src/components/IssueChatThread.test.tsx (max-w-[85%]). */
   --pct-70: 70%; /* Extracted from ui/src/components/CaseFieldsPanel.tsx (max-w-[70%]). */
@@ -2301,6 +2356,7 @@ span.paperclip-mention-chip[data-mention-kind="external-object"] {
   --tp-box-shadow: box-shadow; /* Extracted from ui/src/pages/ProjectDetail.tsx (transition-[box-shadow]). */
   --tp-transform-box-shadow: transform,box-shadow; /* Extracted from ui/src/pages/ProjectDetail.tsx (transition-[transform,box-shadow]). */
   --z-2: 2; /* Extracted from ui/src/components/DocumentAnnotationLayer.tsx (z-[2]). */
+  --z-20: 20; /* Anchored document annotation popover. */
   --z-60: 60; /* Extracted from ui/src/components/DocumentAnnotationPanel.tsx (z-[60]). */
   --z-1: 1; /* Extracted from ui/src/components/IssueDocumentAnnotations.tsx (z-[1]). */
   --z-200: 200; /* Extracted from ui/src/components/Layout.tsx (z-[200]). */
diff --git a/ui/src/pages/IssueDetail.test.tsx b/ui/src/pages/IssueDetail.test.tsx
index 4e189cd580..4243256801 100644
--- a/ui/src/pages/IssueDetail.test.tsx
+++ b/ui/src/pages/IssueDetail.test.tsx
@@ -188,12 +188,18 @@ vi.mock("../context/CompanyContext", () => ({
   }),
 }));
 
+const mockOpenNewIssue = vi.hoisted(() => vi.fn());
+const mockOpenNewProject = vi.hoisted(() => vi.fn());
+const mockOpenNewGoal = vi.hoisted(() => vi.fn());
+
 vi.mock("../context/DialogContext", () => ({
   useDialog: () => ({
-    openNewIssue: vi.fn(),
+    openNewIssue: mockOpenNewIssue,
   }),
   useDialogActions: () => ({
-    openNewIssue: vi.fn(),
+    openNewIssue: mockOpenNewIssue,
+    openNewProject: mockOpenNewProject,
+    openNewGoal: mockOpenNewGoal,
   }),
 }));
 
@@ -1077,6 +1083,9 @@ describe("IssueDetail", () => {
     mockImageGalleryRender.mockClear();
     mockIssueWorkspaceCardRender.mockClear();
     mockNavigate.mockClear();
+    mockOpenNewIssue.mockClear();
+    mockOpenNewProject.mockClear();
+    mockOpenNewGoal.mockClear();
     mockLocation.pathname = "/issues/PAP-1";
     mockLocation.search = "";
     mockLocation.hash = "";
@@ -1118,6 +1127,133 @@ describe("IssueDetail", () => {
     ).toBe(false);
   });
 
+  it("renders the full sub-task tree below the title in the chat center pane", async () => {
+    mockIssuesApi.get.mockResolvedValue(createIssue());
+    mockIssuesApi.list.mockResolvedValue([
+      createIssue({
+        id: "child-1",
+        parentId: "issue-1",
+        identifier: "PAP-2",
+        issueNumber: 2,
+        title: "Child task",
+      }),
+    ]);
+
+    await act(async () => {
+      root.render(
+        <QueryClientProvider client={queryClient}>
+          <IssueDetail />
+        </QueryClientProvider>,
+      );
+    });
+    await flushReact();
+    await flushReact();
+
+    const title = Array.from(container.querySelectorAll("div")).find(
+      (element) => element.textContent === "Issue detail smoke",
+    );
+    const subTasks = Array.from(container.querySelectorAll("div")).find(
+      (element) => element.textContent === "Sub-issues",
+    );
+    expect(title).toBeDefined();
+    expect(subTasks).toBeDefined();
+    expect(title!.compareDocumentPosition(subTasks!) & Node.DOCUMENT_POSITION_FOLLOWING).not.toBe(0);
+    expect(mockIssuesListRender).toHaveBeenCalledWith(
+      expect.objectContaining({
+        createIssueLabel: "Sub-task",
+        showProgressSummary: true,
+      }),
+    );
+  });
+
+  it("hides the full sub-task tree when the task has no subtasks", async () => {
+    mockIssuesApi.get.mockResolvedValue(createIssue());
+    mockIssuesApi.list.mockResolvedValue([]);
+
+    await act(async () => {
+      root.render(
+        <QueryClientProvider client={queryClient}>
+          <IssueDetail />
+        </QueryClientProvider>,
+      );
+    });
+    await flushReact();
+    await flushReact();
+
+    expect(container.textContent).not.toContain("Sub-issues");
+    expect(mockIssuesListRender.mock.calls).not.toContainEqual([
+      expect.objectContaining({ isLoading: false }),
+    ]);
+  });
+
+  it("keeps the properties panel stable across unrelated chat-detail renders", async () => {
+    mockIssuesApi.get.mockResolvedValue(createIssue());
+    const detail = (
+      <QueryClientProvider client={queryClient}>
+        <IssueDetail />
+      </QueryClientProvider>
+    );
+
+    await act(async () => {
+      root.render(detail);
+    });
+    await flushReact();
+    await flushReact();
+
+    const panelOpenCount = mockOpenPanel.mock.calls.length;
+    expect(panelOpenCount).toBeGreaterThan(0);
+
+    // React Query returns a new mutation result object on render. The panel
+    // effect must depend on the stable mutate function rather than that wrapper
+    // object, or openPanel's state update recursively renders
+    // IssueDetail until React throws "Maximum update depth exceeded".
+    await act(async () => {
+      root.render(detail);
+    });
+    await flushReact();
+
+    expect(mockOpenPanel).toHaveBeenCalledTimes(panelOpenCount);
+  });
+
+  it("does not loop openPanel when the sub-task list query is still loading (PAP-508)", async () => {
+    // While the descendant-issues query is still in flight, `data` is undefined.
+    // A literal `= []` default for that `data` mints a new array reference on
+    // every render, which destabilizes the child-derived panel key, re-firing
+    // openPanel each render until
+    // React throws "Maximum update depth exceeded". Keep the list query pending
+    // so `data` stays undefined and the stabilization of the empty default is
+    // the only thing preventing the loop. A fresh root element is rendered each
+    // pass so React actually re-renders IssueDetail (a reused element reference
+    // lets the reconciler bail out, masking the loop).
+    const pendingListRequest = createDeferred<Issue[]>();
+    mockIssuesApi.get.mockResolvedValue(createIssue());
+    mockIssuesApi.list.mockReturnValue(pendingListRequest.promise);
+    const renderDetail = () => (
+      <QueryClientProvider client={queryClient}>
+        <IssueDetail />
+      </QueryClientProvider>
+    );
+
+    await act(async () => {
+      root.render(renderDetail());
+    });
+    await flushReact();
+    await flushReact();
+
+    const panelOpenCount = mockOpenPanel.mock.calls.length;
+    expect(panelOpenCount).toBeGreaterThan(0);
+
+    await act(async () => {
+      root.render(renderDetail());
+    });
+    await flushReact();
+
+    expect(mockOpenPanel).toHaveBeenCalledTimes(panelOpenCount);
+
+    pendingListRequest.resolve([]);
+    await flushReact();
+  });
+
   it("does not load or render decision sections in the issue header", async () => {
     mockIssuesApi.get.mockResolvedValue(createIssue({
       status: "in_review",
diff --git a/ui/src/pages/IssueDetail.tsx b/ui/src/pages/IssueDetail.tsx
index 336b7f27ac..f35c552f60 100644
--- a/ui/src/pages/IssueDetail.tsx
+++ b/ui/src/pages/IssueDetail.tsx
@@ -234,6 +234,12 @@ import {
   workspaceFileRefSchema,
 } from "@paperclipai/shared";
 
+// Stable empty array for React Query `data` defaults. A literal `= []` default
+// creates a new array reference on every render while `data` is undefined
+// (loading/idle), which destabilizes downstream memos and panel keys that
+// depend on it. Reusing one shared reference keeps those values stable.
+const EMPTY_ISSUES: Issue[] = [];
+
 type StopAndFinalizeRunError = Error & {
   runCancelledBeforeStatusUpdateFailed?: boolean;
 };
@@ -664,33 +670,76 @@ function IssueSectionSkeleton({
   );
 }
 
+/**
+ * One chat-bubble placeholder mirroring TaskChatBubble's anatomy: agent replies
+ * sit left under an avatar + name author row, human messages sit right with no
+ * header. The bubble reuses the real rounding (rounded-2xl with a squared tail
+ * corner) so the skeleton reads as a conversation, not a stack of cards.
+ */
+function ChatBubbleSkeleton({
+  side,
+  className,
+}: {
+  side: "agent" | "human";
+  className?: string;
+}) {
+  const isHuman = side === "human";
+  return (
+    <div className={cn("flex w-full flex-col gap-1", isHuman ? "items-end" : "items-start")}>
+      {isHuman ? null : (
+        <span className="flex items-center gap-2 px-1">
+          <Skeleton className="h-6 w-6 rounded-full" />
+          <Skeleton className="h-3 w-24" />
+        </span>
+      )}
+      <Skeleton
+        className={cn(
+          "max-w-(--pct-85)",
+          isHuman ? "rounded-2xl rounded-br-sm" : "rounded-2xl rounded-bl-sm",
+          className,
+        )}
+      />
+    </div>
+  );
+}
+
+/**
+ * Composer placeholder mirroring TaskChatComposer's docked card (a bordered
+ * rounded input area with a plus, a mode chip, and a send affordance) so the
+ * foot of the loading state matches the real chat shell.
+ */
+function IssueChatComposerSkeleton({ className }: { className?: string }) {
+  return (
+    <div
+      className={cn("rounded-xl border border-input bg-card p-2", className)}
+      data-testid="issue-chat-composer-skeleton"
+    >
+      <div className="min-h-(--sz-48px) space-y-2 px-1 py-1">
+        <Skeleton className="h-3 w-1/2" />
+        <Skeleton className="h-3 w-1/3" />
+      </div>
+      <div className="mt-1 flex items-center gap-2">
+        <Skeleton className="h-8 w-8 rounded-md" />
+        <Skeleton className="h-8 w-24 rounded-md" />
+        <div className="flex-1" />
+        <Skeleton className="h-8 w-8 rounded-md" />
+      </div>
+    </div>
+  );
+}
+
+/**
+ * Alternating chat-bubble placeholders for the thread body. Widths and heights
+ * vary so the skeleton mirrors a real back-and-forth (TaskChatThreadView)
+ * rather than the pre-chat bordered card it replaced.
+ */
 function IssueChatSkeleton() {
   return (
-    <div className="space-y-3 rounded-lg border border-border p-3">
-      <div className="space-y-2">
-        <div className="flex items-center gap-2">
-          <Skeleton className="h-8 w-8 rounded-full" />
-          <div className="space-y-2">
-            <Skeleton className="h-3 w-24" />
-            <Skeleton className="h-3 w-16" />
-          </div>
-        </div>
-        <Skeleton className="h-20 w-full rounded-xl" />
-      </div>
-      <div className="space-y-2">
-        <div className="flex items-center justify-end gap-2">
-          <div className="space-y-2 text-right">
-            <Skeleton className="ml-auto h-3 w-20" />
-            <Skeleton className="ml-auto h-3 w-14" />
-          </div>
-          <Skeleton className="h-8 w-8 rounded-full" />
-        </div>
-        <Skeleton className="ml-auto h-16 w-(--pct-85) rounded-xl" />
-      </div>
-      <div className="space-y-2 border-t border-border pt-3">
-        <Skeleton className="h-3 w-28" />
-        <Skeleton className="h-24 w-full rounded-xl" />
-      </div>
+    <div className="flex flex-col gap-3" data-testid="issue-chat-skeleton">
+      <ChatBubbleSkeleton side="agent" className="h-16 w-3/4" />
+      <ChatBubbleSkeleton side="human" className="h-9 w-1/2" />
+      <ChatBubbleSkeleton side="agent" className="h-24 w-4/5" />
+      <ChatBubbleSkeleton side="human" className="h-8 w-2/5" />
     </div>
   );
 }
@@ -775,17 +824,29 @@ function IssueDetailLoadingState({
         )}
       </div>
 
-      <Skeleton className="h-28 w-full rounded-lg border border-border" />
-
-      <div className="space-y-3">
-        <div className="flex items-center gap-2">
-          <Skeleton className="h-8 w-20" />
-          <Skeleton className="h-8 w-20" />
+      {taskChatShellEnabled ? (
+        // Chat shell: the thread is the whole surface — alternating bubble
+        // placeholders followed by the docked composer, no tab strip or
+        // properties-card chrome (those don't exist in the chat layout).
+        <div className="space-y-6">
+          <IssueChatSkeleton />
+          <IssueChatComposerSkeleton />
         </div>
-        <IssueChatSkeleton />
-      </div>
+      ) : (
+        <>
+          <Skeleton className="h-28 w-full rounded-lg border border-border" />
 
-      <IssueSectionSkeleton titleWidth="w-24" rows={3} />
+          <div className="space-y-3">
+            <div className="flex items-center gap-2">
+              <Skeleton className="h-8 w-20" />
+              <Skeleton className="h-8 w-20" />
+            </div>
+            <IssueChatSkeleton />
+          </div>
+
+          <IssueSectionSkeleton titleWidth="w-24" rows={3} />
+        </>
+      )}
     </div>
   );
 }
@@ -1233,7 +1294,16 @@ const IssueDetailChatTab = memo(function IssueDetailChatTab({
           the header so nothing sits above the thread in the page flow. */}
       {classicTaskInterfaceEnabled ? loadOlderButton : null}
       {commentsInitialLoading && commentsWithRunMeta.length === 0 && interactions.length === 0 ? (
-        <IssueChatSkeleton />
+        classicTaskInterfaceEnabled ? (
+          <IssueChatSkeleton />
+        ) : (
+          // Chat shell: center the bubbles at the thread cap (mirrors
+          // TaskChatThreadView) and dock a composer placeholder beneath them.
+          <div className="mx-auto flex w-full max-w-(--tc-shell-max-w) flex-col gap-3 px-4 py-4">
+            <IssueChatSkeleton />
+            <IssueChatComposerSkeleton className="mt-3" />
+          </div>
+        )
       ) : (
       <ThreadComponent
         composerRef={composerRef}
@@ -1802,7 +1872,7 @@ export function IssueDetail() {
     [issueId, location.state, location.search],
   );
 
-  const { data: rawChildIssues = [], isLoading: childIssuesLoading } = useQuery({
+  const { data: rawChildIssuesData, isLoading: childIssuesLoading } = useQuery({
     queryKey:
       issue?.id && resolvedCompanyId
         ? queryKeys.issues.listByDescendantRoot(resolvedCompanyId, issue.id)
@@ -1811,8 +1881,9 @@ export function IssueDetail() {
     enabled: !!resolvedCompanyId && !!issue?.id,
     placeholderData: keepPreviousDataForSameQueryTail<Issue[]>(issue?.id ?? "pending"),
   });
+  const rawChildIssues: Issue[] = rawChildIssuesData ?? EMPTY_ISSUES;
   const {
-    data: rawSiblingIssues = [],
+    data: rawSiblingIssuesData,
     isLoading: siblingIssuesLoading,
     isError: siblingIssuesError,
   } = useQuery({
@@ -1823,6 +1894,7 @@ export function IssueDetail() {
     queryFn: () => issuesApi.list(resolvedCompanyId!, { parentId: issue!.parentId!, includeBlockedBy: true }),
     enabled: !!resolvedCompanyId && !!issue?.parentId,
   });
+  const rawSiblingIssues: Issue[] = rawSiblingIssuesData ?? EMPTY_ISSUES;
   const companyLiveRunsQueryKey = resolvedCompanyId ? queryKeys.liveRuns(resolvedCompanyId) : ["live-runs", "pending"] as const;
   const sharedCompanyLiveRuns = useSharedPollingQuery<LiveRunForIssue[]>({
     companyId: resolvedCompanyId,
@@ -2546,7 +2618,49 @@ export function IssueDetail() {
   });
   const handleChildIssueUpdate = useCallback((id: string, data: Record<string, unknown>) => {
     updateChildIssue.mutate({ id, data });
-  }, [updateChildIssue]);
+  }, [updateChildIssue.mutate]);
+
+  // PAP-496: the chat shell keeps the full sub-task tree directly below the
+  // title in the center column. This is the tree's single chat-shell home; the
+  // Properties pane does not duplicate it. Classic mode keeps its existing
+  // center-column section below the header.
+  const subTasksTree = useMemo(
+    () =>
+      taskChatShellEnabled && issue && showRichSubIssuesSection ? (
+        <IssuesList
+          issues={childIssues}
+          isLoading={childIssuesLoading}
+          agents={agents}
+          projects={projects}
+          liveIssueIds={liveIssueIds}
+          projectId={issue.projectId ?? undefined}
+          viewStateKey={`paperclip:issue-detail:${issue.id}:subissues-view`}
+          issueLinkState={resolvedIssueDetailState ?? location.state}
+          searchFilters={{ descendantOf: issue.id, includeBlockedBy: true }}
+          searchWithinLoadedIssues
+          baseCreateIssueDefaults={buildSubIssueDefaultsForViewer(issue, currentUserId)}
+          createIssueLabel="Sub-task"
+          defaultSortField="workflow"
+          showProgressSummary
+          parentIssueIdForCostSummary={issue.id}
+          onUpdateIssue={handleChildIssueUpdate}
+        />
+      ) : null,
+    [
+      taskChatShellEnabled,
+      issue,
+      showRichSubIssuesSection,
+      childIssues,
+      childIssuesLoading,
+      agents,
+      projects,
+      liveIssueIds,
+      resolvedIssueDetailState,
+      location.state,
+      currentUserId,
+      handleChildIssueUpdate,
+    ],
+  );
 
   const checkIssueMonitorNow = useMutation({
     mutationFn: () => issuesApi.checkMonitorNow(issueId!),
@@ -4635,6 +4749,8 @@ export function IssueDetail() {
           className={taskChatShellEnabled ? "text-base font-semibold" : "text-xl font-bold"}
         />
 
+        {taskChatShellEnabled ? subTasksTree : null}
+
         <IssueMonitorBanner
           issue={issue}
           onCheckNow={() => checkIssueMonitorNow.mutate()}
@@ -4720,6 +4836,7 @@ export function IssueDetail() {
   return (
     <FileViewerProvider issueId={issue.id} enabled={fileViewerEnabled}>
     <div
+      data-task-chat-shell={taskChatShellEnabled ? "" : undefined}
       className={
         taskChatShellEnabled
           ? isMobile
diff --git a/ui/src/pages/TaskChatLab.tsx b/ui/src/pages/TaskChatLab.tsx
index 791c8a36c9..45f2a56280 100644
--- a/ui/src/pages/TaskChatLab.tsx
+++ b/ui/src/pages/TaskChatLab.tsx
@@ -138,8 +138,23 @@ function useStreamingReplay(
  * post-baseline iteration cockpit: state switcher, streaming replay, a
  * 0.1×–10× speed control, and the live motion tweak panel.
  */
+/**
+ * Agent-bubble background treatments explored for PAP-501 (feedback: the
+ * dark-mode agent card reads too light against the near-black page). Each id
+ * maps to a `[data-bubble-variant]` scope in index.css; "" is the chosen
+ * page-surface treatment.
+ */
+const BUBBLE_VARIANTS = [
+  { id: "", label: "Chosen · C · On bg" },
+  { id: "former", label: "Former" },
+  { id: "darker", label: "A · Darker" },
+  { id: "hairline", label: "B · Hairline" },
+] as const;
+type BubbleVariantId = (typeof BUBBLE_VARIANTS)[number]["id"];
+
 export function TaskChatLab() {
   const [selected, setSelected] = useState<TaskChatStateId>("agent-message");
+  const [bubbleVariant, setBubbleVariant] = useState<BubbleVariantId>("");
   const [speed, setSpeed] = useState(1);
   const [playing, setPlaying] = useState(true);
   const [playToken, setPlayToken] = useState(0);
@@ -224,10 +239,34 @@ export function TaskChatLab() {
               />
               <span className="w-10 tabular-nums">{speed.toFixed(1)}×</span>
             </label>
-            <span className="ml-auto font-mono text-(length:--text-micro) text-muted-foreground">{meta.protocol}</span>
+            <div className="ml-auto flex items-center gap-2">
+              <span className="text-muted-foreground">Agent bubble</span>
+              <div className="flex items-center gap-0.5 rounded border border-border p-0.5" role="group" aria-label="Agent bubble treatment">
+                {BUBBLE_VARIANTS.map((v) => (
+                  <button
+                    key={v.id || "current"}
+                    type="button"
+                    data-bubble-variant-id={v.id || "current"}
+                    onClick={() => setBubbleVariant(v.id)}
+                    className={cn(
+                      "rounded px-2 py-0.5 text-(length:--text-micro)",
+                      bubbleVariant === v.id ? "bg-primary text-primary-foreground" : "hover:bg-accent",
+                    )}
+                  >
+                    {v.label}
+                  </button>
+                ))}
+              </div>
+              <span className="font-mono text-(length:--text-micro) text-muted-foreground">{meta.protocol}</span>
+            </div>
           </div>
 
-          <div ref={targetRef} className="flex min-h-0 flex-1 flex-col" data-testid="task-chat-stage">
+          <div
+            ref={targetRef}
+            className="flex min-h-0 flex-1 flex-col"
+            data-testid="task-chat-stage"
+            data-bubble-variant={bubbleVariant || undefined}
+          >
             {scenario.surface === "plan" && scenario.plan ? (
               <div className="mx-auto max-w-2xl px-4">
                 <TaskChatPlanView plan={scenario.plan} />