diff --git a/packages/cli/src/test-utils/render.tsx b/packages/cli/src/test-utils/render.tsx
index 6ca30dd8b9..4ac205b74c 100644
--- a/packages/cli/src/test-utils/render.tsx
+++ b/packages/cli/src/test-utils/render.tsx
@@ -16,7 +16,7 @@ import { vi } from 'vitest';
 import stripAnsi from 'strip-ansi';
 import type React from 'react';
 import { act, useState } from 'react';
-import type { LoadedSettings } from '../config/settings.js';
+import { LoadedSettings } from '../config/settings.js';
 import { KeypressProvider } from '../ui/contexts/KeypressContext.js';
 import { SettingsContext } from '../ui/contexts/SettingsContext.js';
 import { ShellFocusContext } from '../ui/contexts/ShellFocusContext.js';
@@ -611,16 +611,18 @@ export const renderWithProviders = async (
     uiState: providedUiState,
     width,
     mouseEventsEnabled = false,
+    useAlternateBuffer: explicitUseAlternateBuffer,
     config,
     uiActions,
     persistentState,
     appState = mockAppState,
   }: {
     shellFocus?: boolean;
-    settings?: LoadedSettings;
+    settings?: LoadedSettings | Partial<LoadedSettings['merged']>;
     uiState?: Partial<UIState>;
     width?: number;
     mouseEventsEnabled?: boolean;
+    useAlternateBuffer?: boolean;
     config?: Config;
     uiActions?: Partial<UIActions>;
     persistentState?: {
@@ -659,15 +661,34 @@ export const renderWithProviders = async (
 
   const terminalWidth = width ?? baseState.terminalWidth;
 
+  const finalSettings =
+    settings instanceof LoadedSettings
+      ? settings
+      : createMockSettings(settings || {});
+
   if (!config) {
     config = await loadCliConfig(
-      settings.merged,
+      finalSettings.merged,
       'random-session-id',
-      {} as unknown as CliArgs,
+      {} as CliArgs,
       { cwd: '/' },
     );
   }
 
+  const useAlternateBuffer =
+    explicitUseAlternateBuffer ??
+    finalSettings.merged.ui?.useAlternateBuffer ??
+    false;
+
+  const finalConfig = new Proxy(config, {
+    get(target, prop) {
+      if (prop === 'getUseAlternateBuffer') {
+        return () => useAlternateBuffer;
+      }
+      return Reflect.get(target, prop);
+    },
+  });
+
   const mainAreaWidth = providedUiState?.mainAreaWidth ?? terminalWidth;
 
   const finalUiState = {
@@ -696,8 +717,8 @@ export const renderWithProviders = async (
 
   const wrapWithProviders = (comp: React.ReactElement) => (
     <AppContext.Provider value={appState}>
-      <ConfigContext.Provider value={config}>
-        <SettingsContext.Provider value={settings}>
+      <ConfigContext.Provider value={finalConfig}>
+        <SettingsContext.Provider value={finalSettings}>
           <UIStateContext.Provider value={finalUiState}>
             <VimModeProvider>
               <ShellFocusContext.Provider value={shellFocus}>
@@ -708,7 +729,7 @@ export const renderWithProviders = async (
                     <UIActionsContext.Provider value={finalUIActions}>
                       <OverflowProvider>
                         <ToolActionsProvider
-                          config={config}
+                          config={finalConfig}
                           toolCalls={allToolCalls}
                         >
                           <AskUserActionsProvider
@@ -834,7 +855,7 @@ export async function renderHookWithProviders<Result, Props>(
     wrapper?: React.ComponentType<{ children: React.ReactNode }>;
     // Options for renderWithProviders
     shellFocus?: boolean;
-    settings?: LoadedSettings;
+    settings?: LoadedSettings | Partial<LoadedSettings['merged']>;
     uiState?: Partial<UIState>;
     width?: number;
     mouseEventsEnabled?: boolean;
diff --git a/packages/cli/src/ui/contexts/ToolActionsContext.test.tsx b/packages/cli/src/ui/contexts/ToolActionsContext.test.tsx
index 642eec0cde..56485bfb7c 100644
--- a/packages/cli/src/ui/contexts/ToolActionsContext.test.tsx
+++ b/packages/cli/src/ui/contexts/ToolActionsContext.test.tsx
@@ -71,6 +71,9 @@ describe('ToolActionsContext', () => {
 
   beforeEach(() => {
     vi.clearAllMocks();
+    // Default to a pending promise to avoid unwanted async state updates in tests
+    // that don't specifically test the IdeClient initialization.
+    vi.mocked(IdeClient.getInstance).mockReturnValue(new Promise(() => {}));
   });
 
   const wrapper = ({ children }: { children: React.ReactNode }) => (
diff --git a/packages/cli/src/ui/contexts/ToolActionsContext.tsx b/packages/cli/src/ui/contexts/ToolActionsContext.tsx
index 10e063e098..cf64ffca2b 100644
--- a/packages/cli/src/ui/contexts/ToolActionsContext.tsx
+++ b/packages/cli/src/ui/contexts/ToolActionsContext.tsx
@@ -52,7 +52,7 @@ interface ToolActionsContextValue {
 
 const ToolActionsContext = createContext<ToolActionsContextValue | null>(null);
 
-export const useToolActions = () => {
+export const useToolActions = (): ToolActionsContextValue => {
   const context = useContext(ToolActionsContext);
   if (!context) {
     throw new Error('useToolActions must be used within a ToolActionsProvider');
@@ -77,24 +77,23 @@ export const ToolActionsProvider: React.FC<ToolActionsProviderProps> = (
 
   useEffect(() => {
     let isMounted = true;
+    let activeClient: IdeClient | null = null;
+
+    const handleStatusChange = () => {
+      if (isMounted && activeClient) {
+        setIsDiffingEnabled(activeClient.isDiffingEnabled());
+      }
+    };
+
     if (config.getIdeMode()) {
       IdeClient.getInstance()
         .then((client) => {
           if (!isMounted) return;
+          activeClient = client;
           setIdeClient(client);
           setIsDiffingEnabled(client.isDiffingEnabled());
 
-          const handleStatusChange = () => {
-            if (isMounted) {
-              setIsDiffingEnabled(client.isDiffingEnabled());
-            }
-          };
-
           client.addStatusChangeListener(handleStatusChange);
-          // Return a cleanup function for the listener
-          return () => {
-            client.removeStatusChangeListener(handleStatusChange);
-          };
         })
         .catch((error) => {
           debugLogger.error('Failed to get IdeClient instance:', error);
@@ -102,6 +101,9 @@ export const ToolActionsProvider: React.FC<ToolActionsProviderProps> = (
     }
     return () => {
       isMounted = false;
+      if (activeClient) {
+        activeClient.removeStatusChangeListener(handleStatusChange);
+      }
     };
   }, [config]);
 
@@ -164,7 +166,13 @@ export const ToolActionsProvider: React.FC<ToolActionsProviderProps> = (
   );
 
   return (
-    <ToolActionsContext.Provider value={{ confirm, cancel, isDiffingEnabled }}>
+    <ToolActionsContext.Provider
+      value={{
+        confirm,
+        cancel,
+        isDiffingEnabled,
+      }}
+    >
       {children}
     </ToolActionsContext.Provider>
   );
diff --git a/packages/core/src/tools/tools.ts b/packages/core/src/tools/tools.ts
index 23e88b608b..0ec4da977b 100644
--- a/packages/core/src/tools/tools.ts
+++ b/packages/core/src/tools/tools.ts
@@ -920,7 +920,6 @@ export const isListResult = (
   res: unknown,
 ): res is ListDirectoryResult | ReadManyFilesResult =>
   isStructuredToolResult(res) && 'files' in res && Array.isArray(res.files);
-
 export type ToolResultDisplay =
   | string
   | FileDiff