[Due for payment 2026-08-25] Workspace chat is preselected after changing to self DM and switching from Manual to Scan

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Version Number: 9.4.52-0
Reproducible in staging?: Yes
Reproducible in production?: No
If this was caught during regression testing, add the test name, ID and link from BrowserStack: #97264
Email or phone of affected tester (no customers): applausetester+sdodjsoddddds@applause.expensifail.com
Issue reported by: Applause Internal Team
Bug source: Exploratory - Significant User Experience Deterioration
Device used: Mac 26.5 / Chrome
App Component: Money Requests

Action Performed:

Precondition:

• Log in with Expensifail account.

1. Go to staging.new.expensify.com
2. Open FAB > Create expense > Manual.
3. Click To field.
4. Select self DM.
5. Go to Scan tab.
6. Upload a receipt.

Expected Result:

Workspace chat will not be preselected in recipient list.

Actual Result:

Workspace chat is preselected in recipient list.

Workaround:

Unknown

Platforms:

• Android: App
• Android: mWeb Chrome
• iOS: App
• iOS: mWeb Safari
• iOS: mWeb Chrome
• Windows: Chrome
• MacOS: Chrome Safari

Screenshots/Videos

Bug7231016_1786459689518.27.mp4

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Applause Internal Information
Exported by: Svetlana Lazutkina
Bug ID: 7231016

Issue Owner

Current Issue Owner: @mallenexpensify

[applause-bot]

While Applause doesn't embed attachments for this bug, here are the links for quick view:
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[melvin-bot]

You have been assigned to this deploy blocker because you recently merged this PR: #97264

[melvin-bot]

@puneetlath @ikevin127 you have been assigned to this deploy blocker because you reviewed the offending PR: #97264

[melvin-bot]

@thelullabyy you have been assigned to this deploy blocker because you authored the offending PR: #97264

[melvin-bot]

💬 A slack conversation has been started in #expensify-open-source

[github-actions]

👋 Friendly reminder that deploy blockers are time-sensitive ⏱ issues! Check out the open `StagingDeployCash` deploy checklist to see the list of PRs included in this release, then work quickly to do one of the following:

1. Identify the pull request that introduced this issue and revert it.
2. Find someone who can quickly fix the issue.
3. Fix the issue yourself.

[MelvinBot]

🔍 Investigation Summary

Classification: Frontend bug (fix belongs in Expensify/App)
Causing PR: #97264 - "fix (batch 2): isNewManualExpenseFlowEnabled beta flag regressions" by @thelullabyy (High confidence)
Related Issues: This is gated behind the newManualExpenseFlow beta and matches the tab-switch recipient regression class @ikevin127 flagged during review of the same PR.

Recommendation: ROLL FORWARD (targeted fix)

Reverting is not advisable: #97264 is a batch that fixes six separate beta-flow regressions (#96558, #96632, #96653, #96559, #96577, #96576), so a revert would reintroduce all of them. The defect here is a one-line logic change with a clear, isolated fix, so rolling forward is safer than reverting.

Assigned: @thelullabyy (PR author), @puneetlath and @ikevin127 (approving reviewers) — already assigned by Melvin.
Labels: No changes. Kept DeployBlockerCash (App deploy is blocked). No DeployBlocker was present, so nothing to remove.

📋 Detailed Analysis

Evidence

• The bug reproduces only on staging, not production, which is expected for a PR that merged 2026-08-07 and has not yet shipped to production.
• fix (batch 2): isNewManualExpenseFlowEnabled beta flag regressions #97264 is the only recent change to src/hooks/useDefaultParticipants.ts, the hook that seeds the default recipient for a freshly-rebuilt transaction when switching tabs.
• During review of this exact PR, @ikevin127 already reported a sibling regression in the same flow: "Recipient cleared on tab switch. Switch Manual -> Scan -> Manual and the recipient field is now empty." The reported issue is the same tab-switch/rebuild seeding path, producing the opposite wrong result (workspace chat wrongly preselected).

Verification

• Affected file: src/hooks/useDefaultParticipants.ts (participant seeding on tab switch), driven from src/pages/iou/request/step/IOURequestStepConfirmation.tsx (self-DM selection) and src/hooks/useResetIOUType.ts (transaction rebuild on tab switch).
• The offending diff hunk in useDefaultParticipants.ts added the TRACK -> CREATE mapping:
  

  App/src/hooks/useDefaultParticipants.ts

  Lines 84 to 88 in 1fa1215

  	const globalCreateIOUType = iouType === CONST.IOU.TYPE.TRACK ? CONST.IOU.TYPE.CREATE : iouType;
  	const canUseDefaultPolicy = shouldUseDefaultExpensePolicy(globalCreateIOUType, defaultExpensePolicy, amountOwed, userBillingGracePeriodEnds, ownerBillingGracePeriodEnd, accountID);
  	if (!canUseDefaultPolicy) {
  	return [];
  	}

• Confirmed selecting a self DM sets iouType to TRACK:
  

  App/src/pages/iou/request/step/IOURequestStepConfirmation.tsx

  Lines 407 to 413 in 1fa1215

  	const shouldKeepOnSelfDM = !!selectedParticipant?.isSelfDM || ((transaction?.amount ?? 0) < 0 && !isTransactionOnPolicyExpenseChat && isParticipantP2P(selectedParticipant));
  	if (shouldKeepOnSelfDM) {
  	setMoneyRequestParticipantsFromReport(activeTransactionID, selfDMReport, currentUserPersonalDetails.accountID);
  	setTransactionReport(activeTransactionID, {reportID: CONST.REPORT.UNREPORTED_REPORT_ID}, true);
  	if (iouType !== CONST.IOU.TYPE.TRACK) {
  	navigation.setParams({iouType: CONST.IOU.TYPE.TRACK});
  	}

• shouldUseDefaultExpensePolicy only returns true for iouType === CONST.IOU.TYPE.CREATE:
  

  App/src/libs/shouldUseDefaultExpensePolicy.ts

  Lines 18 to 23 in 1fa1215

  	return (
  	iouType === CONST.IOU.TYPE.CREATE &&
  	isGroupPolicy(defaultExpensePolicy) &&
  	defaultExpensePolicy?.isPolicyExpenseChatEnabled &&
  	!shouldRestrictUserBillableActions(defaultExpensePolicy, ownerBillingGracePeriodEnd, userBillingGracePeriodEnds, amountOwed, currentUserAccountID)
  	);

Root Cause

Step-by-step mechanism:

1. In the Manual tab, the user opens the "To" picker and selects the self DM. IOURequestStepConfirmation's shouldKeepOnSelfDM branch fires and sets the route param iouType = TRACK (self-DM = track expense).
2. Switching to the Scan tab rebuilds the transaction. useResetIOUType re-seeds the new (Scan) transaction with the participants returned by useDefaultParticipants, which is still called with iouType = TRACK.
3. Inside useDefaultParticipants, PR fix (batch 2): isNewManualExpenseFlowEnabled beta flag regressions #97264 added:

   const globalCreateIOUType = iouType === CONST.IOU.TYPE.TRACK ? CONST.IOU.TYPE.CREATE : iouType;
   const canUseDefaultPolicy = shouldUseDefaultExpensePolicy(globalCreateIOUType, ...);

   Before this PR the raw iouType (TRACK) was passed to shouldUseDefaultExpensePolicy, which returned false for TRACK, so the hook returned an empty participant list and nothing was preselected. After this PR, TRACK is rewritten to CREATE, so shouldUseDefaultExpensePolicy returns true, and the hook seeds the default expense policy's workspace chat as the selected participant.
4. Result: after Manual -> (select self DM) -> Scan, the workspace chat is preselected instead of the self DM the user chose.

Suggested fix location

src/hooks/useDefaultParticipants.ts around lines 84-92. The TRACK -> CREATE remap was intended to let the plain FAB "create" path fall back to the default workspace, but it also swallows the case where the user explicitly moved the expense to the self DM (iouType === TRACK). The fix should preserve the self-DM target when the incoming iouType is TRACK (e.g. resolve to selfDMReport rather than the default expense-policy chat in that case), instead of treating an explicit track/self-DM selection as a fresh global-create that seeds the default workspace chat.