diff --git a/CHANGELOG.md b/CHANGELOG.md
index 894797c4f..545f1165c 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -52,6 +52,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - `Unknown target` error suggestions no longer advertise the `agent-skills` meta-target, which `apm targets` intentionally omits from its table. The canonical set still accepts `agent-skills` via `--target` and `apm.yml`, but the recovery path printed on errors now matches what the discovery command actually lists. (#1215)
 - `apm pack` no longer hardcodes `pack.target` into bundles; bundles are target-agnostic and `apm install <bundle>` resolves the consumer target from project context and wires bundle `.mcp.json` servers per target via `MCPIntegrator`. (#1217)
 - Multi-account Git Credential Manager users: APM now selects the right GitHub account automatically per repository (no account-picker prompt) when `credential.useHttpPath = true` is set. Existing single-account setups are unaffected. (#1226)
+- Policy inheritance now fails closed: child policies that omit `unmanaged_files` inherit the parent's action instead of silently defaulting to `ignore`. (#1253)
 - Protocol-fallback port warnings are now deduplicated across parallel download workers via a threading lock, so each (host, repo, port) triple warns exactly once. (#1238)
 - `apm install --global <abs-local-path>` no longer rejects absolute local paths at user scope (regression introduced by #1149); restores the post-#937 contract that only relative local paths are ambiguous at user scope. (#1247)
 - Realigned the failing integration suite with current product contracts: copilot-target detection requires `.github/copilot-instructions.md` (post-#1154), `apm marketplace build` is removed in favor of `apm pack`, ADO virtual collections use the SUBDIRECTORY layout (post-#1094), and the `repo:` apm.yml key is replaced by `git:`. (#1247)
diff --git a/src/apm_cli/policy/discovery.py b/src/apm_cli/policy/discovery.py
index 70044081b..e88f65c57 100644
--- a/src/apm_cli/policy/discovery.py
+++ b/src/apm_cli/policy/discovery.py
@@ -1114,7 +1114,7 @@ def _is_policy_empty(policy: ApmPolicy) -> bool:
         and not policy.manifest.required_fields
         and policy.manifest.scripts == "allow"
         and policy.manifest.content_types is None
-        and policy.unmanaged_files.action == "ignore"
+        and policy.unmanaged_files.effective_action == "ignore"
     )
 
 
diff --git a/src/apm_cli/policy/inheritance.py b/src/apm_cli/policy/inheritance.py
index 0229883f1..d5f3024cc 100644
--- a/src/apm_cli/policy/inheritance.py
+++ b/src/apm_cli/policy/inheritance.py
@@ -194,8 +194,14 @@ def _merge_manifest(parent: ManifestPolicy, child: ManifestPolicy) -> ManifestPo
 def _merge_unmanaged_files(
     parent: UnmanagedFilesPolicy, child: UnmanagedFilesPolicy
 ) -> UnmanagedFilesPolicy:
+    if child.action is None:
+        merged_action = parent.action
+    elif parent.action is None:
+        merged_action = child.action
+    else:
+        merged_action = _escalate(_UNMANAGED_ACTION_LEVELS, parent.action, child.action)
     return UnmanagedFilesPolicy(
-        action=_escalate(_UNMANAGED_ACTION_LEVELS, parent.action, child.action),
+        action=merged_action,
         directories=_union(parent.directories, child.directories),
     )
 
diff --git a/src/apm_cli/policy/parser.py b/src/apm_cli/policy/parser.py
index 4a2f77ef8..8093716c9 100644
--- a/src/apm_cli/policy/parser.py
+++ b/src/apm_cli/policy/parser.py
@@ -210,7 +210,7 @@ def _build_policy(data: dict) -> ApmPolicy:
 
     uf_data = data.get("unmanaged_files") or {}
     unmanaged_files = UnmanagedFilesPolicy(
-        action=uf_data.get("action", UnmanagedFilesPolicy.action),
+        action=uf_data.get("action"),  # None when absent -> "no opinion"
         directories=_parse_tuple(uf_data.get("directories")),
     )
 
diff --git a/src/apm_cli/policy/policy_checks.py b/src/apm_cli/policy/policy_checks.py
index 899b7d1c3..6fcbb863e 100644
--- a/src/apm_cli/policy/policy_checks.py
+++ b/src/apm_cli/policy/policy_checks.py
@@ -688,7 +688,7 @@ def _check_unmanaged_files(
     policy: UnmanagedFilesPolicy,
 ) -> CheckResult:
     """Check 16: no untracked files in governance directories."""
-    if policy.action == "ignore":
+    if policy.effective_action == "ignore":
         return CheckResult(
             name="unmanaged-files",
             passed=True,
@@ -752,7 +752,7 @@ def _check_unmanaged_files(
             message="No unmanaged files in governance directories",
         )
 
-    if policy.action == "warn":
+    if policy.effective_action == "warn":
         return CheckResult(
             name="unmanaged-files",
             passed=True,
diff --git a/src/apm_cli/policy/schema.py b/src/apm_cli/policy/schema.py
index a1b4b4b9b..4b17c9e28 100644
--- a/src/apm_cli/policy/schema.py
+++ b/src/apm_cli/policy/schema.py
@@ -91,9 +91,14 @@ class ManifestPolicy:
 class UnmanagedFilesPolicy:
     """Rules for files not tracked in apm.lock."""
 
-    action: str = "ignore"  # ignore | warn | deny
+    action: str | None = None  # None = no opinion; "ignore" | "warn" | "deny"
     directories: tuple[str, ...] = ()
 
+    @property
+    def effective_action(self) -> str:
+        """Resolved action for runtime checks (None -> 'ignore')."""
+        return self.action if self.action is not None else "ignore"
+
 
 @dataclass(frozen=True)
 class ApmPolicy:
diff --git a/tests/unit/policy/test_fixtures.py b/tests/unit/policy/test_fixtures.py
index 0fe76160d..4818f4c9d 100644
--- a/tests/unit/policy/test_fixtures.py
+++ b/tests/unit/policy/test_fixtures.py
@@ -52,7 +52,8 @@ def test_minimal_policy_defaults(self):
         self.assertEqual(policy.name, "minimal")
         self.assertEqual(policy.enforcement, "warn")
         self.assertEqual(policy.dependencies.require_resolution, "project-wins")
-        self.assertEqual(policy.unmanaged_files.action, "ignore")
+        self.assertEqual(policy.unmanaged_files.action, None)
+        self.assertEqual(policy.unmanaged_files.effective_action, "ignore")
 
     def test_repo_override_has_extends(self):
         """Repo override fixture declares extends=org."""
diff --git a/tests/unit/policy/test_inheritance.py b/tests/unit/policy/test_inheritance.py
index 1e936c57d..6872d7fd4 100644
--- a/tests/unit/policy/test_inheritance.py
+++ b/tests/unit/policy/test_inheritance.py
@@ -425,6 +425,73 @@ def test_directories_dedup(self):
         self.assertEqual(result.unmanaged_files.directories, (".prompts",))
 
 
+class TestUnmanagedFilesTransparency(unittest.TestCase):
+    """Child omitting unmanaged_files is transparent (fixes #1198)."""
+
+    def test_parent_deny_child_omits_block(self):
+        """Parent deny + child omits -> merged deny."""
+        result = merge_policies(
+            ApmPolicy(unmanaged_files=UnmanagedFilesPolicy(action="deny")),
+            ApmPolicy(),  # child omits unmanaged_files entirely -> action=None
+        )
+        self.assertEqual(result.unmanaged_files.action, "deny")
+
+    def test_parent_deny_child_explicit_ignore(self):
+        """Parent deny + child explicitly sets ignore -> merged deny (escalation)."""
+        result = merge_policies(
+            ApmPolicy(unmanaged_files=UnmanagedFilesPolicy(action="deny")),
+            ApmPolicy(unmanaged_files=UnmanagedFilesPolicy(action="ignore")),
+        )
+        self.assertEqual(result.unmanaged_files.action, "deny")
+
+    def test_parent_warn_child_explicit_deny(self):
+        """Parent warn + child explicitly sets deny -> merged deny (child tightens)."""
+        result = merge_policies(
+            ApmPolicy(unmanaged_files=UnmanagedFilesPolicy(action="warn")),
+            ApmPolicy(unmanaged_files=UnmanagedFilesPolicy(action="deny")),
+        )
+        self.assertEqual(result.unmanaged_files.action, "deny")
+
+    def test_parent_ignore_child_omits(self):
+        """Parent ignore + child omits -> merged ignore."""
+        result = merge_policies(
+            ApmPolicy(unmanaged_files=UnmanagedFilesPolicy(action="ignore")),
+            ApmPolicy(),
+        )
+        self.assertEqual(result.unmanaged_files.action, "ignore")
+
+    def test_parent_none_child_omits(self):
+        """Both omit -> merged None (no opinion)."""
+        result = merge_policies(
+            ApmPolicy(),
+            ApmPolicy(),
+        )
+        self.assertIsNone(result.unmanaged_files.action)
+        self.assertEqual(result.unmanaged_files.effective_action, "ignore")
+
+    def test_directories_inherited_when_child_omits(self):
+        """Parent directories preserved when child omits the block."""
+        result = merge_policies(
+            ApmPolicy(
+                unmanaged_files=UnmanagedFilesPolicy(action="deny", directories=(".github", "docs"))
+            ),
+            ApmPolicy(),  # child omits
+        )
+        self.assertEqual(result.unmanaged_files.action, "deny")
+        self.assertEqual(sorted(result.unmanaged_files.directories), [".github", "docs"])
+
+    def test_three_level_chain_transparency(self):
+        """Enterprise deny -> org omits -> repo omits -> deny preserved."""
+        result = resolve_policy_chain(
+            [
+                ApmPolicy(unmanaged_files=UnmanagedFilesPolicy(action="deny")),
+                ApmPolicy(),  # org omits
+                ApmPolicy(),  # repo omits
+            ]
+        )
+        self.assertEqual(result.unmanaged_files.action, "deny")
+
+
 class TestResolvePolicyChain(unittest.TestCase):
     """Full chain resolution with three levels."""
 
diff --git a/tests/unit/policy/test_parser.py b/tests/unit/policy/test_parser.py
index 0333e35fd..8fe9e8399 100644
--- a/tests/unit/policy/test_parser.py
+++ b/tests/unit/policy/test_parser.py
@@ -318,6 +318,13 @@ def test_long_yaml_string_does_not_crash(self):
         self.assertEqual(policy.version, "1.0")
         self.assertEqual(policy.enforcement, "off")
 
+    def test_omitted_unmanaged_files_yields_none_action(self):
+        """Absent unmanaged_files block -> action is None (no opinion)."""
+        policy, _ = load_policy("name: test\nenforcement: warn\n")
+        self.assertIsNone(policy.unmanaged_files.action)
+        self.assertEqual(policy.unmanaged_files.effective_action, "ignore")
+        self.assertEqual(policy.unmanaged_files.directories, ())
+
 
 class TestLoadPolicyFromFile(unittest.TestCase):
     """Test load_policy from a file path."""
diff --git a/tests/unit/policy/test_policy_checks.py b/tests/unit/policy/test_policy_checks.py
index eef7ff12c..08396403b 100644
--- a/tests/unit/policy/test_policy_checks.py
+++ b/tests/unit/policy/test_policy_checks.py
@@ -9,6 +9,7 @@
 import yaml
 
 from apm_cli.models.apm_package import clear_apm_yml_cache
+from apm_cli.policy.inheritance import merge_policies
 from apm_cli.policy.models import CheckResult, CIAuditResult  # noqa: F401
 from apm_cli.policy.policy_checks import (
     _check_compilation_strategy,
@@ -653,6 +654,53 @@ def test_rglob_cap_skips_check(self, tmp_path, monkeypatch):
         assert result.passed
         assert "capped" in result.message.lower()
 
+    def test_action_none_resolves_to_ignore(self, tmp_path):
+        """action=None standalone: effective_action resolves to 'ignore', check passes."""
+        policy = UnmanagedFilesPolicy(action=None)
+        result = _check_unmanaged_files(tmp_path, None, policy)
+        assert result.passed
+
+    def test_action_none_inherits_parent_deny(self, tmp_path):
+        """action=None + parent deny: merge propagates deny to child."""
+        (tmp_path / ".github" / "agents").mkdir(parents=True)
+        (tmp_path / ".github" / "agents" / "rogue.md").write_text("rogue", encoding="utf-8")
+        parent = ApmPolicy(
+            unmanaged_files=UnmanagedFilesPolicy(action="deny", directories=[".github/agents"])
+        )
+        child = ApmPolicy(unmanaged_files=UnmanagedFilesPolicy(action=None))
+        merged = merge_policies(parent, child)
+        lock = _make_lockfile([{"repo_url": "org/pkg", "deployed_files": []}])
+        result = _check_unmanaged_files(tmp_path, lock, merged.unmanaged_files)
+        assert not result.passed
+
+    def test_rogue_file_caught_parent_deny_child_omits_block(self, tmp_path):
+        """Rogue file is caught when parent says deny but child omits unmanaged_files block."""
+        (tmp_path / ".github" / "agents").mkdir(parents=True)
+        (tmp_path / ".github" / "agents" / "rogue.md").write_text("rogue", encoding="utf-8")
+        parent = ApmPolicy(
+            unmanaged_files=UnmanagedFilesPolicy(action="deny", directories=[".github/agents"])
+        )
+        child = ApmPolicy()  # child omits unmanaged_files entirely (defaults to action=None)
+        merged = merge_policies(parent, child)
+        lock = _make_lockfile([{"repo_url": "org/pkg", "deployed_files": []}])
+        result = _check_unmanaged_files(tmp_path, lock, merged.unmanaged_files)
+        assert not result.passed
+        assert ".github/agents/rogue.md" in result.details
+
+    def test_integration_chain_deny_propagates(self, tmp_path):
+        """Integration chain: parent deny + child omits block -> merge -> check catches rogue file."""
+        (tmp_path / ".github" / "agents").mkdir(parents=True)
+        (tmp_path / ".github" / "agents" / "rogue.md").write_text("rogue", encoding="utf-8")
+        parent_policy = ApmPolicy(
+            unmanaged_files=UnmanagedFilesPolicy(action="deny", directories=[".github/agents"])
+        )
+        child_policy = ApmPolicy(unmanaged_files=UnmanagedFilesPolicy(action=None))
+        merged = merge_policies(parent_policy, child_policy)
+        lock = _make_lockfile([{"repo_url": "org/pkg", "deployed_files": []}])
+        result = _check_unmanaged_files(tmp_path, lock, merged.unmanaged_files)
+        assert not result.passed
+        assert ".github/agents/rogue.md" in result.details
+
 
 # -- Integration: run_policy_checks ---------------------------------
 
diff --git a/tests/unit/policy/test_schema.py b/tests/unit/policy/test_schema.py
index 1677e5210..6eea415aa 100644
--- a/tests/unit/policy/test_schema.py
+++ b/tests/unit/policy/test_schema.py
@@ -96,7 +96,8 @@ class TestUnmanagedFilesPolicyDefaults(unittest.TestCase):
 
     def test_defaults(self):
         uf = UnmanagedFilesPolicy()
-        self.assertEqual(uf.action, "ignore")
+        self.assertIsNone(uf.action)
+        self.assertEqual(uf.effective_action, "ignore")
         self.assertEqual(uf.directories, ())