diff --git a/src-node/claude-code-agent.js b/src-node/claude-code-agent.js
index d863e1201..921c286a0 100644
--- a/src-node/claude-code-agent.js
+++ b/src-node/claude-code-agent.js
@@ -363,6 +363,8 @@ async function _runQuery(requestId, prompt, projectPath, model, signal, locale,
             "multiple Edit calls to make targeted changes rather than rewriting the entire " +
             "file with Write. This is critical because Write replaces the entire file content " +
             "which is slow and loses undo history." +
+            "\n\nAlways use full absolute paths for all file operations (Read, Edit, Write, " +
+            "controlEditor). Never use relative paths." +
             "\n\nWhen a tool response mentions the user has typed a clarification, immediately " +
             "call getUserClarification to read it and incorporate the user's feedback into your current work." +
             (locale && !locale.startsWith("en")
diff --git a/src-node/mcp-editor-tools.js b/src-node/mcp-editor-tools.js
index 962456d68..d04b698ae 100644
--- a/src-node/mcp-editor-tools.js
+++ b/src-node/mcp-editor-tools.js
@@ -61,7 +61,7 @@ function createEditorMcpServer(sdkModule, nodeConnector, clarificationAccessors)
     const hasClarification = clarificationAccessors && clarificationAccessors.hasClarification;
     const getEditorStateTool = sdkModule.tool(
         "getEditorState",
-        "Get the current Phoenix editor state: active file, working set (open files), live preview file, " +
+        "Get the current Phoenix editor state: active file, working set (open files with isDirty flag), live preview file, " +
         "cursor/selection info (current line text with surrounding context, or selected text), " +
         "and the currently selected element in the live preview (tag, selector, text preview) if any. " +
         "The live preview selected element may differ from the editor cursor — use execJsInLivePreview to inspect it further. " +
diff --git a/src/core-ai/AIChatPanel.js b/src/core-ai/AIChatPanel.js
index b6a6a616d..1d542c8ad 100644
--- a/src/core-ai/AIChatPanel.js
+++ b/src/core-ai/AIChatPanel.js
@@ -45,6 +45,7 @@ define(function (require, exports, module) {
     const _KernalModeTrust = window.KernalModeTrust;
 
     let _nodeConnector = null;
+    let _currentEntitlementState = null; // "chat" | "login" | "upsell" | "adminDisabled" | null
     let _isStreaming = false;
     let _queuedMessage = null;  // text queued by user while AI is streaming
     let _currentRequestId = null;
@@ -240,15 +241,20 @@ define(function (require, exports, module) {
      * upsell screen if no AI plan, or proceeds to CLI availability check if entitled.
      */
     function _checkEntitlementAndInit() {
-        _removeCurrentPanel();
         const EntitlementsManager = _KernalModeTrust && _KernalModeTrust.EntitlementsManager;
         if (!EntitlementsManager) {
             // No entitlement system (test env or dev) — skip straight to CLI check
-            _checkAvailability();
+            if (_currentEntitlementState !== "chat") {
+                _removeCurrentPanel();
+                _checkAvailability();
+            }
             return;
         }
         if (!EntitlementsManager.isLoggedIn()) {
-            _renderLoginUI();
+            if (_currentEntitlementState !== "login") {
+                _removeCurrentPanel();
+                _renderLoginUI();
+            }
             return;
         }
         // TODO: Switch to EntitlementsManager.getAIEntitlement() once AI entitlement is
@@ -267,12 +273,21 @@ define(function (require, exports, module) {
         //   });
         EntitlementsManager.getLiveEditEntitlement().then(function (entitlement) {
             if (entitlement.activated) {
-                _checkAvailability();
+                if (_currentEntitlementState !== "chat") {
+                    _removeCurrentPanel();
+                    _checkAvailability();
+                }
             } else {
-                _renderUpsellUI(entitlement);
+                if (_currentEntitlementState !== "upsell") {
+                    _removeCurrentPanel();
+                    _renderUpsellUI(entitlement);
+                }
             }
         }).catch(function () {
-            _checkAvailability(); // fallback on error
+            if (_currentEntitlementState !== "chat") {
+                _removeCurrentPanel();
+                _checkAvailability(); // fallback on error
+            }
         });
     }
 
@@ -280,6 +295,7 @@ define(function (require, exports, module) {
      * Render the login prompt UI (user not signed in).
      */
     function _renderLoginUI() {
+        _currentEntitlementState = "login";
         const html =
             '<div class="ai-chat-panel">' +
                 '<div class="ai-unavailable">' +
@@ -302,6 +318,7 @@ define(function (require, exports, module) {
      * Render the upsell UI (user logged in but no AI plan).
      */
     function _renderUpsellUI(entitlement) {
+        _currentEntitlementState = "upsell";
         const html =
             '<div class="ai-chat-panel">' +
                 '<div class="ai-unavailable">' +
@@ -325,6 +342,7 @@ define(function (require, exports, module) {
      * Render the admin-disabled UI (AI turned off by system administrator).
      */
     function _renderAdminDisabledUI() {
+        _currentEntitlementState = "adminDisabled";
         const html =
             '<div class="ai-chat-panel">' +
                 '<div class="ai-unavailable">' +
@@ -359,6 +377,7 @@ define(function (require, exports, module) {
      * Render the full chat UI.
      */
     function _renderChatUI() {
+        _currentEntitlementState = "chat";
         $panel = $(PANEL_HTML);
         $messages = $panel.find(".ai-chat-messages");
         $status = $panel.find(".ai-chat-status");
@@ -567,6 +586,7 @@ define(function (require, exports, module) {
      * Render the unavailable UI (CLI not found).
      */
     function _renderUnavailableUI(error) {
+        _currentEntitlementState = "chat";
         const $unavailable = $(UNAVAILABLE_HTML);
         $unavailable.find(".ai-retry-btn").on("click", function () {
             _checkAvailability();
diff --git a/src/core-ai/aiPhoenixConnectors.js b/src/core-ai/aiPhoenixConnectors.js
index d29430f19..bc89b8a56 100644
--- a/src/core-ai/aiPhoenixConnectors.js
+++ b/src/core-ai/aiPhoenixConnectors.js
@@ -213,7 +213,9 @@ define(function (require, exports, module) {
             if (p.startsWith("/tauri/")) {
                 p = p.replace("/tauri", "");
             }
-            return p;
+            const doc = DocumentManager.getOpenDocumentForPath(file.fullPath);
+            const isDirty = doc ? doc.isDirty : false;
+            return { path: p, isDirty: isDirty };
         });
 
         let livePreviewFile = null;
@@ -338,6 +340,7 @@ define(function (require, exports, module) {
                 deferred.resolve({ base64: base64 });
             })
             .catch(function (err) {
+                console.error("[AI Control] Screenshot failed:", err);
                 deferred.resolve({ base64: null, error: err.message || String(err) });
             });
         return deferred.promise();
@@ -350,6 +353,14 @@ define(function (require, exports, module) {
             return deferred.promise();
         }
 
+        function _onResult(result) {
+            if (result.base64) {
+                console.log("[AI Control] Screenshot taken:", params.selector || "full window",
+                    params.purePreview ? "(pure preview)" : "");
+            }
+            deferred.resolve(result);
+        }
+
         if (params.purePreview) {
             const previousMode = LiveDevMain.getCurrentMode();
             LiveDevMain.setMode(LivePreviewConstants.LIVE_PREVIEW_MODE);
@@ -358,12 +369,12 @@ define(function (require, exports, module) {
                 _captureScreenshot(params.selector)
                     .done(function (result) {
                         LiveDevMain.setMode(previousMode);
-                        deferred.resolve(result);
+                        _onResult(result);
                     });
             }, 150);
         } else {
             _captureScreenshot(params.selector)
-                .done(function (result) { deferred.resolve(result); });
+                .done(function (result) { _onResult(result); });
         }
 
         return deferred.promise();
@@ -490,6 +501,7 @@ define(function (require, exports, module) {
                 });
             })
             .fail(function (err) {
+                console.error("[AI Control] applyEditToBuffer failed:", err);
                 deferred.resolve({ applied: false, error: err.message || String(err) });
             });
         return deferred.promise();
@@ -544,6 +556,7 @@ define(function (require, exports, module) {
                 })
                 .fail(function (err) {
                     _onExecJsDone();
+                    console.error("[AI Control] execJsInLivePreview failed:", err);
                     deferred.resolve({ error: (err && err.message) || String(err) || "evaluate() failed" });
                 });
         }
@@ -581,6 +594,7 @@ define(function (require, exports, module) {
             if (settled) { return; }
             cleanup();
             _onExecJsDone();
+            console.error("[AI Control] Timed out waiting for live preview connection (30s)");
             deferred.resolve({ error: "Timed out waiting for live preview connection (30s)" });
         }, TIMEOUT);
 
@@ -618,18 +632,18 @@ define(function (require, exports, module) {
     function controlEditor(params) {
         const deferred = new $.Deferred();
         const vfsPath = SnapshotStore.realToVfsPath(params.filePath);
-        console.log("controlEditor:", params.operation, params.filePath, "-> vfs:", vfsPath);
+        console.log("[AI Control] controlEditor:", params.operation, params.filePath, "-> vfs:", vfsPath);
 
         function _resolve(result) {
             if (!result.success) {
-                console.error("controlEditor failed:", params.operation, vfsPath, result.error);
+                console.error("[AI Control] controlEditor failed:", params.operation, vfsPath, result.error);
             }
             deferred.resolve(result);
         }
 
         switch (params.operation) {
         case "open":
-            CommandManager.execute(Commands.CMD_OPEN, { fullPath: vfsPath })
+            CommandManager.execute(Commands.CMD_ADD_TO_WORKINGSET_AND_OPEN, { fullPath: vfsPath })
                 .done(function () { _resolve({ success: true }); })
                 .fail(function (err) { _resolve({ success: false, error: String(err) }); });
             break;
diff --git a/src/styles/Extn-AIChatPanel.less b/src/styles/Extn-AIChatPanel.less
index ef56a4c16..915bd0c60 100644
--- a/src/styles/Extn-AIChatPanel.less
+++ b/src/styles/Extn-AIChatPanel.less
@@ -243,6 +243,9 @@
     padding: 8px 10px;
     min-height: 0;
     min-width: 0;
+    -webkit-user-select: text;
+    user-select: text;
+    cursor: default;
 }
 
 /* ── Individual messages ────────────────────────────────────────────── */
@@ -265,6 +268,7 @@
         word-wrap: break-word;
         overflow-wrap: anywhere;
         min-width: 0;
+        -webkit-user-select: text;
         user-select: text;
         cursor: text;
     }
@@ -475,6 +479,7 @@
     margin-bottom: 3px;
     border-radius: 4px;
     background-color: rgba(255, 255, 255, 0.025);
+    border: 1px solid rgba(255, 255, 255, 0.04);
     border-left: 2px solid var(--tool-color, @project-panel-text-2);
 
     .ai-tool-header {