diff --git a/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.test.ts b/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.test.ts
index 8a06dddeeec1..2d2c787f936b 100644
--- a/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.test.ts
+++ b/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.test.ts
@@ -4546,6 +4546,71 @@ describe("ClaudeAdapterV2 background wake turns", () => {
     ),
   );
 
+  it.effect.each(["claude-haiku-4-5-20251001", "claude-sonnet-4-6"])(
+    "renegotiates auto only when switching API models after fallback to default: %s",
+    (nextModel) =>
+      Effect.gen(function* () {
+        const harness = yield* makeWakeHarnessWithOptions({ freshQueueOnReopen: true });
+        const modelSelection = {
+          instanceId: ClaudeAdapterV2.CLAUDE_DEFAULT_INSTANCE_ID,
+          model: "claude-haiku-4-5-20251001",
+        };
+        const turnInput = {
+          threadId: harness.threadId,
+          providerThread: harness.providerThread,
+          now: yield* DateTime.now,
+          attachments: [],
+          modelSelection,
+          runtimePolicy: ProviderAdapter.ProviderAdapterV2RuntimePolicy.make({
+            ...CLAUDE_TEST_RUNTIME_POLICY,
+            runtimeMode: "auto",
+          }),
+        };
+        yield* harness.runtime.startTurn(
+          makeClaudeTestTurnInput({
+            ...turnInput,
+            attemptId: RunAttemptId.make("attempt-claude-auto-fallback-1"),
+            text: "Hello.",
+          }),
+        );
+        const openedOptions = harness.getOpenedOptions();
+        assert.equal(openedOptions?.permissionMode, "auto");
+        yield* harness.offerAndWait(claudeSdkFrame({ ...wakeTurnInit, permissionMode: "default" }));
+        yield* Queue.offer(harness.sdkMessages, turnOneResult);
+        yield* Queue.take(harness.terminalReceipts);
+
+        yield* harness.runtime.startTurn(
+          makeClaudeTestTurnInput({
+            ...turnInput,
+            modelSelection: { ...modelSelection, model: nextModel },
+            attemptId: RunAttemptId.make("attempt-claude-auto-fallback-2"),
+            providerTurnOrdinal: 2,
+            text: "Continue.",
+          }),
+        );
+        if (nextModel === modelSelection.model) {
+          assert.strictEqual(harness.getOpenedOptions(), openedOptions);
+          assert.lengthOf(harness.processQueues, 1);
+        } else {
+          const resumedOptions = harness.getOpenedOptions();
+          assert.notStrictEqual(resumedOptions, openedOptions);
+          assert.equal(resumedOptions?.model, nextModel);
+          assert.equal(resumedOptions?.resume, WAKE_NATIVE_SESSION);
+          assert.isUndefined(resumedOptions?.sessionId);
+          assert.equal(resumedOptions?.permissionMode, "auto");
+          assert.lengthOf(harness.processQueues, 2);
+        }
+        assert.lengthOf(harness.offeredMessages, 2);
+        assert.deepEqual(harness.permissionModeChanges, []);
+        assert.deepEqual(harness.liveSelectionChanges, []);
+      }).pipe(
+        Effect.scoped,
+        Effect.provide(
+          Layer.mergeAll(IdAllocator.layer, McpProviderSessions.layer, NodeServices.layer),
+        ),
+      ),
+  );
+
   it.effect("preserves typed Claude plans and todos through generic tool completion", () =>
     Effect.scoped(
       Effect.gen(function* () {
@@ -4627,6 +4692,9 @@ describe("ClaudeAdapterV2 background wake turns", () => {
           harness.sdkMessages,
           toolResults("00000000-0000-4000-8000-000000000502", ["tool-todo-1"]),
         );
+        yield* harness.offerAndWait(
+          claudeSdkFrame({ ...wakeTurnInit, permissionMode: "bypassPermissions" }),
+        );
         yield* Queue.offer(
           harness.sdkMessages,
           claudeSdkFrame({
@@ -4638,6 +4706,13 @@ describe("ClaudeAdapterV2 background wake turns", () => {
             session_id: WAKE_NATIVE_SESSION,
           }),
         );
+        yield* harness.offerAndWait(
+          claudeSdkFrame({
+            ...wakeTurnInit,
+            uuid: "00000000-0000-4000-8000-000000000509",
+            permissionMode: "plan",
+          }),
+        );
         yield* Queue.offer(
           harness.sdkMessages,
           makeResultFrame({
diff --git a/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.ts b/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.ts
index be276af5f0ed..f00bd90b7af6 100644
--- a/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.ts
+++ b/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.ts
@@ -3101,7 +3101,9 @@ interface ClaudeLiveQueryContext {
   // ("early") or only on its result. "acknowledged": the CLI confirmed it took a prompt's uuid
   // before any echo, so it echoes, but a resume's own turns can still run ahead of that prompt.
   promptEchoMode: "unknown" | "acknowledged" | "early" | "result_only";
-  readonly openedPermissionMode: PermissionMode;
+  // The CLI may fall back from the requested mode on its first init frame.
+  openedPermissionMode: PermissionMode;
+  receivedInit: boolean;
   permissionMode: PermissionMode;
   stopping: boolean;
   readonly subagentsFromEarlierProcesses: ReadonlySet<ActiveClaudeSubagent>;
@@ -8455,7 +8457,9 @@ export const makeClaudeAdapterV2 = Effect.fn("makeClaudeAdapterV2")(function* (
             existing.queryPolicyKey === queryPolicyKey &&
             !existing.stopping &&
             existing.selection.queryIdentity !== compiledSelection.queryIdentity &&
-            canApplyClaudeSelectionLive(existing.selection, compiledSelection)
+            canApplyClaudeSelectionLive(existing.selection, compiledSelection) &&
+            (existing.selection.apiModelId === compiledSelection.apiModelId ||
+              existing.openedPermissionMode === queryPolicy.permissionMode)
           ) {
             const live = existing;
             yield* live.query.setModel(compiledSelection.apiModelId).pipe(
@@ -8478,7 +8482,7 @@ export const makeClaudeAdapterV2 = Effect.fn("makeClaudeAdapterV2")(function* (
           ) {
             // Claude can switch its own mode mid-session (EnterPlanMode), and
             // a denied ExitPlanMode leaves it there. Put the live process back
-            // in the thread's mode before the next prompt.
+            // in its initial mode before the next prompt.
             if (existing.permissionMode !== existing.openedPermissionMode) {
               yield* existing.query.setPermissionMode(existing.openedPermissionMode);
               existing.permissionMode = existing.openedPermissionMode;
@@ -8585,6 +8589,7 @@ export const makeClaudeAdapterV2 = Effect.fn("makeClaudeAdapterV2")(function* (
             lastTurn: null,
             promptEchoMode: "unknown",
             openedPermissionMode: queryOptions.permissionMode,
+            receivedInit: false,
             permissionMode: queryOptions.permissionMode,
             stopping: false,
             subagentsFromEarlierProcesses: new Set(
@@ -8598,6 +8603,15 @@ export const makeClaudeAdapterV2 = Effect.fn("makeClaudeAdapterV2")(function* (
             Stream.runForEach((message) =>
               sdkMessageLock.withPermits(1)(
                 Effect.suspend(() => {
+                  if (
+                    message.type === "system" &&
+                    message.subtype === "init" &&
+                    !context.receivedInit
+                  ) {
+                    context.openedPermissionMode =
+                      message.permissionMode ?? context.openedPermissionMode;
+                    context.receivedInit = true;
+                  }
                   if (
                     message.type === "system" &&
                     (message.subtype === "init" || message.subtype === "status") &&