diff --git a/.gemini/commands/promote-behavioral-eval.toml b/.gemini/commands/promote-behavioral-eval.toml
new file mode 100644
index 0000000000..9893e9b02b
--- /dev/null
+++ b/.gemini/commands/promote-behavioral-eval.toml
@@ -0,0 +1,29 @@
+description = "Promote behavioral evals that have a 100% success rate over the last 7 nightly runs."
+prompt = """
+You are an expert at analyzing and promoting behavioral evaluations.
+
+1. **Investigate**:
+   - Use 'gh' cli to fetch the results from the most recent run from the main branch: https://github.com/google-gemini/gemini-cli/actions/workflows/evals-nightly.yml.
+   - DO NOT push any changes or start any runs. The rest of your evaluation will be local.
+   - Evals are in evals/ directory and are documented by evals/README.md.
+   - Identify tests that have passed 100% of the time for ALL enabled models across the past 7 runs in a row.
+   - NOTE: the results summary from the most recent run contains the last 7 runs test results. 100% means the test passed 3/3 times for that model and run.
+   - If a test meets this criteria, it is a candidate for promotion.
+
+2. **Promote**:
+   - For each candidate test, locate the test file in the evals/ directory.
+   - Promote the test according to the project's standard promotion process (e.g., moving it to a stable suite, updating its tags, or removing skip/flaky annotations). 
+   - Ensure you follow any guidelines in evals/README.md for stable tests.
+   - Your **final** change should be **minimal and targeted** to just promoting the test status.
+
+3. **Verify**:
+   - Run the promoted tests locally to validate that they still execute correctly. Be sure to run vitest in non-interactive mode.
+   - Check that the test is now part of the expected standard or stable test suites.
+
+4. **Report**:
+   - Provide a summary of the tests that were promoted.
+   - Include the success rate evidence (7/7 runs passed for all models) for each promoted test.
+   - If no tests met the criteria for promotion, clearly state that and summarize the closest candidates.
+
+{{args}}
+"""
diff --git a/.gemini/config.yaml b/.gemini/config.yaml
index cbfb0c8059..b9543f0b7d 100644
--- a/.gemini/config.yaml
+++ b/.gemini/config.yaml
@@ -9,4 +9,5 @@ code_review:
     help: false
     summary: true
     code_review: true
+    include_drafts: false
 ignore_patterns: []
diff --git a/.github/workflows/chained_e2e.yml b/.github/workflows/chained_e2e.yml
index 05b1fb0f1d..7d13a23938 100644
--- a/.github/workflows/chained_e2e.yml
+++ b/.github/workflows/chained_e2e.yml
@@ -31,6 +31,7 @@ jobs:
     name: 'Merge Queue Skipper'
     permissions: 'read-all'
     runs-on: 'gemini-cli-ubuntu-16-core'
+    if: "github.repository == 'google-gemini/gemini-cli'"
     outputs:
       skip: '${{ steps.merge-queue-e2e-skipper.outputs.skip-check }}'
     steps:
@@ -42,7 +43,7 @@ jobs:
 
   download_repo_name:
     runs-on: 'gemini-cli-ubuntu-16-core'
-    if: "${{github.event_name == 'workflow_dispatch' || github.event_name == 'workflow_run'}}"
+    if: "github.repository == 'google-gemini/gemini-cli' && (github.event_name == 'workflow_dispatch' || github.event_name == 'workflow_run')"
     outputs:
       repo_name: '${{ steps.output-repo-name.outputs.repo_name }}'
       head_sha: '${{ steps.output-repo-name.outputs.head_sha }}'
@@ -91,7 +92,7 @@ jobs:
     name: 'Parse run context'
     runs-on: 'gemini-cli-ubuntu-16-core'
     needs: 'download_repo_name'
-    if: 'always()'
+    if: "github.repository == 'google-gemini/gemini-cli' && always()"
     outputs:
       repository: '${{ steps.set_context.outputs.REPO }}'
       sha: '${{ steps.set_context.outputs.SHA }}'
@@ -111,11 +112,11 @@ jobs:
     permissions: 'write-all'
     needs:
       - 'parse_run_context'
-    if: 'always()'
+    if: "github.repository == 'google-gemini/gemini-cli' && always()"
     steps:
       - name: 'Set pending status'
         uses: 'myrotvorets/set-commit-status-action@16037e056d73b2d3c88e37e393ff369047f70886' # ratchet:myrotvorets/set-commit-status-action@master
-        if: 'always()'
+        if: "github.repository == 'google-gemini/gemini-cli' && always()"
         with:
           allowForks: 'true'
           repo: '${{ github.repository }}'
@@ -131,7 +132,7 @@ jobs:
       - 'parse_run_context'
     runs-on: 'gemini-cli-ubuntu-16-core'
     if: |
-      always() && (needs.merge_queue_skipper.result !='success' || needs.merge_queue_skipper.outputs.skip != 'true')
+      github.repository == 'google-gemini/gemini-cli' && always() && (needs.merge_queue_skipper.result !='success' || needs.merge_queue_skipper.outputs.skip != 'true')
     strategy:
       fail-fast: false
       matrix:
@@ -184,7 +185,7 @@ jobs:
       - 'parse_run_context'
     runs-on: 'macos-latest'
     if: |
-      always() && (needs.merge_queue_skipper.result !='success' || needs.merge_queue_skipper.outputs.skip != 'true')
+      github.repository == 'google-gemini/gemini-cli' && always() && (needs.merge_queue_skipper.result !='success' || needs.merge_queue_skipper.outputs.skip != 'true')
     steps:
       - name: 'Checkout'
         uses: 'actions/checkout@08eba0b27e820071cde6df949e0beb9ba4906955' # ratchet:actions/checkout@v5
@@ -222,7 +223,7 @@ jobs:
       - 'merge_queue_skipper'
       - 'parse_run_context'
     if: |
-      always() && (needs.merge_queue_skipper.result !='success' || needs.merge_queue_skipper.outputs.skip != 'true')
+      github.repository == 'google-gemini/gemini-cli' && always() && (needs.merge_queue_skipper.result !='success' || needs.merge_queue_skipper.outputs.skip != 'true')
     runs-on: 'gemini-cli-windows-16-core'
     steps:
       - name: 'Checkout'
@@ -282,7 +283,7 @@ jobs:
       - 'parse_run_context'
     runs-on: 'gemini-cli-ubuntu-16-core'
     if: |
-      always() && (needs.merge_queue_skipper.result !='success' || needs.merge_queue_skipper.outputs.skip != 'true')
+      github.repository == 'google-gemini/gemini-cli' && always() && (needs.merge_queue_skipper.result !='success' || needs.merge_queue_skipper.outputs.skip != 'true')
     steps:
       - name: 'Checkout'
         uses: 'actions/checkout@08eba0b27e820071cde6df949e0beb9ba4906955' # ratchet:actions/checkout@v5
@@ -309,7 +310,7 @@ jobs:
   e2e:
     name: 'E2E'
     if: |
-      always() && (needs.merge_queue_skipper.result !='success' || needs.merge_queue_skipper.outputs.skip != 'true')
+      github.repository == 'google-gemini/gemini-cli' && always() && (needs.merge_queue_skipper.result !='success' || needs.merge_queue_skipper.outputs.skip != 'true')
     needs:
       - 'e2e_linux'
       - 'e2e_mac'
@@ -337,14 +338,14 @@ jobs:
   set_workflow_status:
     runs-on: 'gemini-cli-ubuntu-16-core'
     permissions: 'write-all'
-    if: 'always()'
+    if: "github.repository == 'google-gemini/gemini-cli' && always()"
     needs:
       - 'parse_run_context'
       - 'e2e'
     steps:
       - name: 'Set workflow status'
         uses: 'myrotvorets/set-commit-status-action@16037e056d73b2d3c88e37e393ff369047f70886' # ratchet:myrotvorets/set-commit-status-action@master
-        if: 'always()'
+        if: "github.repository == 'google-gemini/gemini-cli' && always()"
         with:
           allowForks: 'true'
           repo: '${{ github.repository }}'
diff --git a/.github/workflows/ci.yml b/.github/workflows/ci.yml
index 999eb778c4..a358ad8b07 100644
--- a/.github/workflows/ci.yml
+++ b/.github/workflows/ci.yml
@@ -37,6 +37,7 @@ jobs:
     permissions: 'read-all'
     name: 'Merge Queue Skipper'
     runs-on: 'gemini-cli-ubuntu-16-core'
+    if: "github.repository == 'google-gemini/gemini-cli'"
     outputs:
       skip: '${{ steps.merge-queue-ci-skipper.outputs.skip-check }}'
     steps:
@@ -49,7 +50,7 @@ jobs:
     name: 'Lint'
     runs-on: 'gemini-cli-ubuntu-16-core'
     needs: 'merge_queue_skipper'
-    if: "${{needs.merge_queue_skipper.outputs.skip == 'false'}}"
+    if: "github.repository == 'google-gemini/gemini-cli' && needs.merge_queue_skipper.outputs.skip == 'false'"
     env:
       GEMINI_LINT_TEMP_DIR: '${{ github.workspace }}/.gemini-linters'
     steps:
@@ -116,6 +117,7 @@ jobs:
   link_checker:
     name: 'Link Checker'
     runs-on: 'ubuntu-latest'
+    if: "github.repository == 'google-gemini/gemini-cli'"
     steps:
       - name: 'Checkout'
         uses: 'actions/checkout@08c6903cd8c0fde910a37f88322edcfb5dd907a8' # ratchet:actions/checkout@v5
@@ -129,7 +131,7 @@ jobs:
     runs-on: 'gemini-cli-ubuntu-16-core'
     needs:
       - 'merge_queue_skipper'
-    if: "${{needs.merge_queue_skipper.outputs.skip == 'false'}}"
+    if: "github.repository == 'google-gemini/gemini-cli' && needs.merge_queue_skipper.outputs.skip == 'false'"
     permissions:
       contents: 'read'
       checks: 'write'
@@ -216,7 +218,7 @@ jobs:
     runs-on: 'macos-latest'
     needs:
       - 'merge_queue_skipper'
-    if: "${{needs.merge_queue_skipper.outputs.skip == 'false'}}"
+    if: "github.repository == 'google-gemini/gemini-cli' && needs.merge_queue_skipper.outputs.skip == 'false'"
     permissions:
       contents: 'read'
       checks: 'write'
@@ -311,7 +313,7 @@ jobs:
     name: 'CodeQL'
     runs-on: 'gemini-cli-ubuntu-16-core'
     needs: 'merge_queue_skipper'
-    if: "${{needs.merge_queue_skipper.outputs.skip == 'false'}}"
+    if: "github.repository == 'google-gemini/gemini-cli' && needs.merge_queue_skipper.outputs.skip == 'false'"
     permissions:
       actions: 'read'
       contents: 'read'
@@ -334,7 +336,7 @@ jobs:
   bundle_size:
     name: 'Check Bundle Size'
     needs: 'merge_queue_skipper'
-    if: "${{github.event_name == 'pull_request' && needs.merge_queue_skipper.outputs.skip == 'false'}}"
+    if: "github.repository == 'google-gemini/gemini-cli' && github.event_name == 'pull_request' && needs.merge_queue_skipper.outputs.skip == 'false'"
     runs-on: 'gemini-cli-ubuntu-16-core'
     permissions:
       contents: 'read' # For checkout
@@ -359,7 +361,7 @@ jobs:
     name: 'Slow Test - Win - ${{ matrix.shard }}'
     runs-on: 'gemini-cli-windows-16-core'
     needs: 'merge_queue_skipper'
-    if: "${{needs.merge_queue_skipper.outputs.skip == 'false'}}"
+    if: "github.repository == 'google-gemini/gemini-cli' && needs.merge_queue_skipper.outputs.skip == 'false'"
     timeout-minutes: 60
     strategy:
       matrix:
@@ -451,7 +453,7 @@ jobs:
 
   ci:
     name: 'CI'
-    if: 'always()'
+    if: "github.repository == 'google-gemini/gemini-cli' && always()"
     needs:
       - 'lint'
       - 'link_checker'
diff --git a/.github/workflows/deflake.yml b/.github/workflows/deflake.yml
index a0eb51a7f4..fbb3e2d8d7 100644
--- a/.github/workflows/deflake.yml
+++ b/.github/workflows/deflake.yml
@@ -27,6 +27,7 @@ jobs:
   deflake_e2e_linux:
     name: 'E2E Test (Linux) - ${{ matrix.sandbox }}'
     runs-on: 'gemini-cli-ubuntu-16-core'
+    if: "github.repository == 'google-gemini/gemini-cli'"
     strategy:
       fail-fast: false
       matrix:
@@ -77,6 +78,7 @@ jobs:
   deflake_e2e_mac:
     name: 'E2E Test (macOS)'
     runs-on: 'macos-latest'
+    if: "github.repository == 'google-gemini/gemini-cli'"
     steps:
       - name: 'Checkout'
         uses: 'actions/checkout@08eba0b27e820071cde6df949e0beb9ba4906955' # ratchet:actions/checkout@v5
@@ -114,6 +116,7 @@ jobs:
   deflake_e2e_windows:
     name: 'Slow E2E - Win'
     runs-on: 'gemini-cli-windows-16-core'
+    if: "github.repository == 'google-gemini/gemini-cli'"
 
     steps:
       - name: 'Checkout'
diff --git a/.github/workflows/docs-page-action.yml b/.github/workflows/docs-page-action.yml
index 2d485278ce..be807c7c36 100644
--- a/.github/workflows/docs-page-action.yml
+++ b/.github/workflows/docs-page-action.yml
@@ -19,8 +19,7 @@ concurrency:
 
 jobs:
   build:
-    if: |-
-      ${{ !contains(github.ref_name, 'nightly') }}
+    if: "github.repository == 'google-gemini/gemini-cli' && !contains(github.ref_name, 'nightly')"
     runs-on: 'ubuntu-latest'
     steps:
       - name: 'Checkout'
@@ -39,6 +38,7 @@ jobs:
         uses: 'actions/upload-pages-artifact@56afc609e74202658d3ffba0e8f6dda462b719fa' # ratchet:actions/upload-pages-artifact@v3
 
   deploy:
+    if: "github.repository == 'google-gemini/gemini-cli'"
     environment:
       name: 'github-pages'
       url: '${{ steps.deployment.outputs.page_url }}'
diff --git a/.github/workflows/docs-rebuild.yml b/.github/workflows/docs-rebuild.yml
index ac41819f02..a4e2c65973 100644
--- a/.github/workflows/docs-rebuild.yml
+++ b/.github/workflows/docs-rebuild.yml
@@ -7,6 +7,7 @@ on:
       - 'docs/**'
 jobs:
   trigger-rebuild:
+    if: "github.repository == 'google-gemini/gemini-cli'"
     runs-on: 'ubuntu-latest'
     steps:
       - name: 'Trigger rebuild'
diff --git a/.github/workflows/evals-nightly.yml b/.github/workflows/evals-nightly.yml
index 1ed9448c03..c5b3709c75 100644
--- a/.github/workflows/evals-nightly.yml
+++ b/.github/workflows/evals-nightly.yml
@@ -23,6 +23,7 @@ jobs:
   evals:
     name: 'Evals (USUALLY_PASSING) nightly run'
     runs-on: 'gemini-cli-ubuntu-16-core'
+    if: "github.repository == 'google-gemini/gemini-cli'"
     strategy:
       fail-fast: false
       matrix:
@@ -85,7 +86,7 @@ jobs:
   aggregate-results:
     name: 'Aggregate Results'
     needs: ['evals']
-    if: 'always()'
+    if: "github.repository == 'google-gemini/gemini-cli' && always()"
     runs-on: 'gemini-cli-ubuntu-16-core'
     steps:
       - name: 'Checkout'
diff --git a/.github/workflows/gemini-scheduled-stale-issue-closer.yml b/.github/workflows/gemini-scheduled-stale-issue-closer.yml
index c7aef65a73..2b7b163d88 100644
--- a/.github/workflows/gemini-scheduled-stale-issue-closer.yml
+++ b/.github/workflows/gemini-scheduled-stale-issue-closer.yml
@@ -21,6 +21,7 @@ defaults:
 
 jobs:
   close-stale-issues:
+    if: "github.repository == 'google-gemini/gemini-cli'"
     runs-on: 'ubuntu-latest'
     permissions:
       issues: 'write'
diff --git a/.github/workflows/label-backlog-child-issues.yml b/.github/workflows/label-backlog-child-issues.yml
index b11f509f80..a819bf4e71 100644
--- a/.github/workflows/label-backlog-child-issues.yml
+++ b/.github/workflows/label-backlog-child-issues.yml
@@ -14,7 +14,7 @@ permissions:
 jobs:
   # Event-based: Quick reaction to new/edited issues in THIS repo
   labeler:
-    if: "github.event_name == 'issues'"
+    if: "github.repository == 'google-gemini/gemini-cli' && github.event_name == 'issues'"
     runs-on: 'ubuntu-latest'
     steps:
       - name: 'Checkout'
@@ -36,7 +36,7 @@ jobs:
 
   # Scheduled/Manual: Recursive sync across multiple repos
   sync-maintainer-labels:
-    if: "github.event_name == 'schedule' || github.event_name == 'workflow_dispatch'"
+    if: "github.repository == 'google-gemini/gemini-cli' && (github.event_name == 'schedule' || github.event_name == 'workflow_dispatch')"
     runs-on: 'ubuntu-latest'
     steps:
       - name: 'Checkout'
diff --git a/.github/workflows/label-workstream-rollup.yml b/.github/workflows/label-workstream-rollup.yml
index 35840cfe6f..97d699d09b 100644
--- a/.github/workflows/label-workstream-rollup.yml
+++ b/.github/workflows/label-workstream-rollup.yml
@@ -9,6 +9,7 @@ on:
 
 jobs:
   labeler:
+    if: "github.repository == 'google-gemini/gemini-cli'"
     runs-on: 'ubuntu-latest'
     permissions:
       issues: 'write'
diff --git a/.github/workflows/release-change-tags.yml b/.github/workflows/release-change-tags.yml
index 6184850677..c7c3f3f2d2 100644
--- a/.github/workflows/release-change-tags.yml
+++ b/.github/workflows/release-change-tags.yml
@@ -32,6 +32,7 @@ on:
 
 jobs:
   change-tags:
+    if: "github.repository == 'google-gemini/gemini-cli'"
     runs-on: 'ubuntu-latest'
     environment: "${{ github.event.inputs.environment || 'prod' }}"
     permissions:
diff --git a/.github/workflows/release-manual.yml b/.github/workflows/release-manual.yml
index c9d2290a1c..f03bd52127 100644
--- a/.github/workflows/release-manual.yml
+++ b/.github/workflows/release-manual.yml
@@ -47,6 +47,7 @@ on:
 
 jobs:
   release:
+    if: "github.repository == 'google-gemini/gemini-cli'"
     runs-on: 'ubuntu-latest'
     environment: "${{ github.event.inputs.environment || 'prod' }}"
     permissions:
diff --git a/.github/workflows/release-notes.yml b/.github/workflows/release-notes.yml
index 8a681dadf6..f746e65c2e 100644
--- a/.github/workflows/release-notes.yml
+++ b/.github/workflows/release-notes.yml
@@ -22,6 +22,7 @@ on:
 
 jobs:
   generate-release-notes:
+    if: "github.repository == 'google-gemini/gemini-cli'"
     runs-on: 'ubuntu-latest'
     permissions:
       contents: 'write'
diff --git a/.github/workflows/release-rollback.yml b/.github/workflows/release-rollback.yml
index 8840b65721..db91457b1a 100644
--- a/.github/workflows/release-rollback.yml
+++ b/.github/workflows/release-rollback.yml
@@ -42,6 +42,7 @@ on:
 
 jobs:
   change-tags:
+    if: "github.repository == 'google-gemini/gemini-cli'"
     environment: "${{ github.event.inputs.environment || 'prod' }}"
     runs-on: 'ubuntu-latest'
     permissions:
diff --git a/.github/workflows/release-sandbox.yml b/.github/workflows/release-sandbox.yml
index f1deb0380c..2c7de7a0f5 100644
--- a/.github/workflows/release-sandbox.yml
+++ b/.github/workflows/release-sandbox.yml
@@ -16,6 +16,7 @@ on:
 
 jobs:
   build:
+    if: "github.repository == 'google-gemini/gemini-cli'"
     runs-on: 'ubuntu-latest'
     permissions:
       contents: 'read'
diff --git a/.github/workflows/smoke-test.yml b/.github/workflows/smoke-test.yml
index caeb0bebe0..29903dfbe8 100644
--- a/.github/workflows/smoke-test.yml
+++ b/.github/workflows/smoke-test.yml
@@ -20,6 +20,7 @@ on:
 
 jobs:
   smoke-test:
+    if: "github.repository == 'google-gemini/gemini-cli'"
     runs-on: 'ubuntu-latest'
     permissions:
       contents: 'write'
diff --git a/.github/workflows/trigger_e2e.yml b/.github/workflows/trigger_e2e.yml
index babe08e4e3..56da2727c5 100644
--- a/.github/workflows/trigger_e2e.yml
+++ b/.github/workflows/trigger_e2e.yml
@@ -15,6 +15,7 @@ on:
 
 jobs:
   save_repo_name:
+    if: "github.repository == 'google-gemini/gemini-cli'"
     runs-on: 'gemini-cli-ubuntu-16-core'
     steps:
       - name: 'Save Repo name'
@@ -31,6 +32,7 @@ jobs:
           path: 'pr/'
   trigger_e2e:
     name: 'Trigger e2e'
+    if: "github.repository == 'google-gemini/gemini-cli'"
     runs-on: 'gemini-cli-ubuntu-16-core'
     steps:
       - id: 'trigger-e2e'
diff --git a/.github/workflows/verify-release.yml b/.github/workflows/verify-release.yml
index edf0995ddd..20a9f51b8a 100644
--- a/.github/workflows/verify-release.yml
+++ b/.github/workflows/verify-release.yml
@@ -28,6 +28,7 @@ on:
 
 jobs:
   verify-release:
+    if: "github.repository == 'google-gemini/gemini-cli'"
     environment: "${{ github.event.inputs.environment || 'prod' }}"
     strategy:
       fail-fast: false
diff --git a/docs/changelogs/latest.md b/docs/changelogs/latest.md
index 8fb3f6aa87..5390f89fa3 100644
--- a/docs/changelogs/latest.md
+++ b/docs/changelogs/latest.md
@@ -1,6 +1,6 @@
-# Latest stable release: v0.30.0
+# Latest stable release: v0.30.1
 
-Released: February 25, 2026
+Released: February 27, 2026
 
 For most users, our latest stable release is the recommended release. Install
 the latest stable version with:
@@ -28,6 +28,9 @@ npm install -g @google/gemini-cli
 
 ## What's Changed
 
+- fix(patch): cherry-pick 58df1c6 to release/v0.30.0-pr-20374 [CONFLICTS] by
+  @gemini-cli-robot in
+  [#20567](https://github.com/google-gemini/gemini-cli/pull/20567)
 - feat(ux): added text wrapping capabilities to markdown tables by @devr0306 in
   [#18240](https://github.com/google-gemini/gemini-cli/pull/18240)
 - Revert "fix(mcp): ensure MCP transport is closed to prevent memory leaks" by
@@ -330,4 +333,4 @@ npm install -g @google/gemini-cli
   [#20112](https://github.com/google-gemini/gemini-cli/pull/20112)
 
 **Full Changelog**:
-https://github.com/google-gemini/gemini-cli/compare/v0.29.7...v0.30.0
+https://github.com/google-gemini/gemini-cli/compare/v0.29.7...v0.30.1
diff --git a/docs/changelogs/preview.md b/docs/changelogs/preview.md
index 588573a37c..e855c7913b 100644
--- a/docs/changelogs/preview.md
+++ b/docs/changelogs/preview.md
@@ -1,6 +1,6 @@
-# Preview release: v0.31.0-preview.0
+# Preview release: v0.31.0-preview.1
 
-Released: February 25, 2026
+Released: February 27, 2026
 
 Our preview release includes the latest, new, and experimental features. This
 release may not be as stable as our [latest weekly release](latest.md).
@@ -33,6 +33,10 @@ npm install -g @google/gemini-cli@preview
 
 ## What's Changed
 
+- fix(patch): cherry-pick 58df1c6 to release/v0.31.0-preview.0-pr-20374 to patch
+  version v0.31.0-preview.0 and create version 0.31.0-preview.1 by
+  @gemini-cli-robot in
+  [#20568](https://github.com/google-gemini/gemini-cli/pull/20568)
 - Use ranged reads and limited searches and fuzzy editing improvements by
   @gundermanc in
   [#19240](https://github.com/google-gemini/gemini-cli/pull/19240)
@@ -409,4 +413,4 @@ npm install -g @google/gemini-cli@preview
   [#20240](https://github.com/google-gemini/gemini-cli/pull/20240)
 
 **Full Changelog**:
-https://github.com/google-gemini/gemini-cli/compare/v0.30.0-preview.6...v0.31.0-preview.0
+https://github.com/google-gemini/gemini-cli/compare/v0.30.0-preview.6...v0.31.0-preview.1
diff --git a/docs/cli/model.md b/docs/cli/model.md
index 62bfcf5b0b..3da5ea4cbc 100644
--- a/docs/cli/model.md
+++ b/docs/cli/model.md
@@ -19,24 +19,15 @@ Use the following command in Gemini CLI:
 
 Running this command will open a dialog with your options:
 
-| Option            | Description                                                    | Models                                                                 |
-| ----------------- | -------------------------------------------------------------- | ---------------------------------------------------------------------- |
-| Auto (Gemini 3)   | Let the system choose the best Gemini 3 model for your task.   | gemini-3-pro-preview (if enabled), gemini-3-flash-preview (if enabled) |
-| Auto (Gemini 2.5) | Let the system choose the best Gemini 2.5 model for your task. | gemini-2.5-pro, gemini-2.5-flash                                       |
-| Manual            | Select a specific model.                                       | Any available model.                                                   |
+| Option            | Description                                                    | Models                                       |
+| ----------------- | -------------------------------------------------------------- | -------------------------------------------- |
+| Auto (Gemini 3)   | Let the system choose the best Gemini 3 model for your task.   | gemini-3-pro-preview, gemini-3-flash-preview |
+| Auto (Gemini 2.5) | Let the system choose the best Gemini 2.5 model for your task. | gemini-2.5-pro, gemini-2.5-flash             |
+| Manual            | Select a specific model.                                       | Any available model.                         |
 
 We recommend selecting one of the above **Auto** options. However, you can
 select **Manual** to select a specific model from those available.
 
-### Gemini 3 and preview features
-
-> **Note:** Gemini 3 is not currently available on all account types. To learn
-> more about Gemini 3 access, refer to
-> [Gemini 3 on Gemini CLI](../get-started/gemini-3.md).
-
-To enable Gemini 3 Pro and Gemini 3 Flash (if available), enable
-[**Preview Features** by using the `settings` command](../cli/settings.md).
-
 You can also use the `--model` flag to specify a particular Gemini model on
 startup. For more details, refer to the
 [configuration documentation](../reference/configuration.md).
diff --git a/docs/cli/settings.md b/docs/cli/settings.md
index 3f935b6d8e..d75e6931de 100644
--- a/docs/cli/settings.md
+++ b/docs/cli/settings.md
@@ -72,6 +72,7 @@ they appear in the UI.
 | Incremental Rendering                | `ui.incrementalRendering`              | Enable incremental rendering for the UI. This option will reduce flickering but may cause rendering artifacts. Only supported when useAlternateBuffer is enabled. | `true`   |
 | Show Spinner                         | `ui.showSpinner`                       | Show the spinner during operations.                                                                                                                               | `true`   |
 | Loading Phrases                      | `ui.loadingPhrases`                    | What to show while the model is working: tips, witty comments, both, or nothing.                                                                                  | `"tips"` |
+| Error Verbosity                      | `ui.errorVerbosity`                    | Controls whether recoverable errors are hidden (low) or fully shown (full).                                                                                       | `"low"`  |
 | Screen Reader Mode                   | `ui.accessibility.screenReader`        | Render output in plain-text to be more screen reader accessible                                                                                                   | `false`  |
 
 ### IDE
@@ -80,6 +81,12 @@ they appear in the UI.
 | -------- | ------------- | ---------------------------- | ------- |
 | IDE Mode | `ide.enabled` | Enable IDE integration mode. | `false` |
 
+### Billing
+
+| UI Label         | Setting                   | Description                                                                                                                                                | Default |
+| ---------------- | ------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- |
+| Overage Strategy | `billing.overageStrategy` | How to handle quota exhaustion when AI credits are available. 'ask' prompts each time, 'always' automatically uses credits, 'never' disables credit usage. | `"ask"` |
+
 ### Model
 
 | UI Label                | Setting                      | Description                                                                            | Default     |
diff --git a/docs/get-started/installation.md b/docs/get-started/installation.md
index 1acf497659..c989642a12 100644
--- a/docs/get-started/installation.md
+++ b/docs/get-started/installation.md
@@ -1,6 +1,6 @@
 # Gemini CLI installation, execution, and releases
 
-This document provides an overview of Gemini CLI's sytem requriements,
+This document provides an overview of Gemini CLI's system requirements,
 installation methods, and release types.
 
 ## Recommended system specifications
diff --git a/docs/reference/configuration.md b/docs/reference/configuration.md
index ab5bd4ceb6..0baea99428 100644
--- a/docs/reference/configuration.md
+++ b/docs/reference/configuration.md
@@ -322,6 +322,12 @@ their corresponding top-level category object in your `settings.json` file.
   - **Default:** `"tips"`
   - **Values:** `"tips"`, `"witty"`, `"all"`, `"off"`
 
+- **`ui.errorVerbosity`** (enum):
+  - **Description:** Controls whether recoverable errors are hidden (low) or
+    fully shown (full).
+  - **Default:** `"low"`
+  - **Values:** `"low"`, `"full"`
+
 - **`ui.customWittyPhrases`** (array):
   - **Description:** Custom witty phrases to display during loading. When
     provided, the CLI cycles through these instead of the defaults.
@@ -357,6 +363,15 @@ their corresponding top-level category object in your `settings.json` file.
   - **Default:** `true`
   - **Requires restart:** Yes
 
+#### `billing`
+
+- **`billing.overageStrategy`** (enum):
+  - **Description:** How to handle quota exhaustion when AI credits are
+    available. 'ask' prompts each time, 'always' automatically uses credits,
+    'never' disables credit usage.
+  - **Default:** `"ask"`
+  - **Values:** `"ask"`, `"always"`, `"never"`
+
 #### `model`
 
 - **`model.name`** (string):
diff --git a/docs/resources/faq.md b/docs/resources/faq.md
index 6ed1504a46..465ba40d2f 100644
--- a/docs/resources/faq.md
+++ b/docs/resources/faq.md
@@ -5,14 +5,18 @@ problems encountered while using Gemini CLI.
 
 ## General issues
 
+This section addresses common questions about Gemini CLI usage, security, and
+troubleshooting general errors.
+
 ### Why can't I use third-party software (e.g. Claude Code, OpenClaw, OpenCode) with Gemini CLI?
 
-Using third-party software, tools, or services to access Gemini CLI is a
-violation of our [applicable terms and policies](tos-privacy.md), and severely
-degrades the experience for legitimate product users. Such actions may be
-grounds for suspension or termination of your account. If you would like to use
-a third-party coding agent with Gemini, we recommend using a Vertex or AI Studio
-API key.
+Using third-party software, tools, or services to harvest or piggyback on Gemini
+CLI's OAuth authentication to access our backend services is a direct violation
+of our [applicable terms and policies](tos-privacy.md). Doing so bypasses our
+intended authentication and security structures, and such actions may be grounds
+for immediate suspension or termination of your account. If you would like to
+use a third-party coding agent with Gemini, the supported and secure method is
+to use a Vertex AI or Google AI Studio API key.
 
 ### Why am I getting an `API error: 429 - Resource exhausted`?
 
diff --git a/docs/tools/mcp-server.md b/docs/tools/mcp-server.md
index 22ce748918..202325a83d 100644
--- a/docs/tools/mcp-server.md
+++ b/docs/tools/mcp-server.md
@@ -1066,6 +1066,11 @@ command has no flags.
 gemini mcp list
 ```
 
+> **Note on Trust:** For security, `stdio` MCP servers (those using the
+> `command` property) are only tested and displayed as "Connected" if the
+> current folder is trusted. If the folder is untrusted, they will show as
+> "Disconnected". Use `gemini trust` to trust the current folder.
+
 **Example output:**
 
 ```sh
@@ -1074,6 +1079,23 @@ gemini mcp list
 ✗ sse-server: https://api.example.com/sse (sse) - Disconnected
 ```
 
+## Troubleshooting and Diagnostics
+
+To minimize noise during startup, MCP connection errors for background servers
+are "silent by default." If issues are detected during startup, a single
+informational hint will be shown: _"MCP issues detected. Run /mcp list for
+status."_
+
+Detailed, actionable diagnostics for a specific server are automatically
+re-enabled when:
+
+1.  You run an interactive command like `/mcp list`, `/mcp auth`, etc.
+2.  The model attempts to execute a tool from that server.
+3.  You invoke an MCP prompt from that server.
+
+You can also use `gemini mcp list` from your shell to see connection errors for
+all configured servers.
+
 ### Removing a server (`gemini mcp remove`)
 
 To delete a server from your configuration, use the `remove` command with the
diff --git a/eslint.config.js b/eslint.config.js
index 3bc350d027..5cb8b7fcfa 100644
--- a/eslint.config.js
+++ b/eslint.config.js
@@ -55,26 +55,8 @@ export default tseslint.config(
     },
   },
   {
-    // Import specific config
-    files: ['packages/*/src/**/*.{ts,tsx}'], // Target all TS/TSX in the packages
-    plugins: {
-      import: importPlugin,
-    },
-    settings: {
-      'import/resolver': {
-        node: true,
-      },
-    },
-    rules: {
-      ...importPlugin.configs.recommended.rules,
-      ...importPlugin.configs.typescript.rules,
-      'import/no-default-export': 'warn',
-      'import/no-unresolved': 'off', // Disable for now, can be noisy with monorepos/paths
-    },
-  },
-  {
-    // General overrides and rules for the project (TS/TSX files)
-    files: ['packages/*/src/**/*.{ts,tsx}'], // Target only TS/TSX in the cli package
+    // Rules for packages/*/src (TS/TSX)
+    files: ['packages/*/src/**/*.{ts,tsx}'],
     plugins: {
       import: importPlugin,
     },
@@ -95,6 +77,11 @@ export default tseslint.config(
       },
     },
     rules: {
+      ...importPlugin.configs.recommended.rules,
+      ...importPlugin.configs.typescript.rules,
+      'import/no-default-export': 'warn',
+      'import/no-unresolved': 'off',
+      'import/no-duplicates': 'error',
       // General Best Practice Rules (subset adapted for flat config)
       '@typescript-eslint/array-type': ['error', { default: 'array-simple' }],
       'arrow-body-style': ['error', 'as-needed'],
diff --git a/evals/README.md b/evals/README.md
index eb3cf2be70..41ce3440b8 100644
--- a/evals/README.md
+++ b/evals/README.md
@@ -46,18 +46,20 @@ two arguments:
 
 #### Policies
 
-Policies control how strictly a test is validated. Tests should generally use
-the ALWAYS_PASSES policy to offer the strictest guarantees.
-
-USUALLY_PASSES exists to enable assertion of less consistent or aspirational
-behaviors.
+Policies control how strictly a test is validated.
 
 - `ALWAYS_PASSES`: Tests expected to pass 100% of the time. These are typically
-  trivial and test basic functionality. These run in every CI.
+  trivial and test basic functionality. These run in every CI and can block PRs
+  on failure.
 - `USUALLY_PASSES`: Tests expected to pass most of the time but may have some
   flakiness due to non-deterministic behaviors. These are run nightly and used
   to track the health of the product from build to build.
 
+**All new behavioral evaluations must be created with the `USUALLY_PASSES`
+policy.** A subset that prove to be highly stable over time may be promoted to
+`ALWAYS_PASSES`. For more information, see
+[Test promotion process](#test-promotion-process).
+
 #### `EvalCase` Properties
 
 - `name`: The name of the evaluation case.
@@ -76,7 +78,8 @@ import { describe, expect } from 'vitest';
 import { evalTest } from './test-helper.js';
 
 describe('my_feature', () => {
-  evalTest('ALWAYS_PASSES', {
+  // New tests MUST start as USUALLY_PASSES and be promoted via /promote-behavioral-eval
+  evalTest('USUALLY_PASSES', {
     name: 'should do something',
     prompt: 'do it',
     assert: async (rig, result) => {
@@ -114,6 +117,39 @@ npm run test:all_evals
 This command sets the `RUN_EVALS` environment variable to `1`, which enables the
 `USUALLY_PASSES` tests.
 
+## Ensuring Eval is Stable Prior to Check-in
+
+The
+[Evals: Nightly](https://github.com/google-gemini/gemini-cli/actions/workflows/evals-nightly.yml)
+run is considered to be the source of truth for the quality of an eval test.
+Each run of it executes a test 3 times in a row, for each supported model. The
+result is then scored 0%, 33%, 66%, or 100% respectively, to indicate how many
+of the individual executions passed.
+
+Googlers can schedule a manual run against their branch by clicking the link
+above.
+
+Tests should score at least 66% with key models including Gemini 3.1 pro, Gemini
+3.0 pro, and Gemini 3 flash prior to check in and they must pass 100% of the
+time before they are promoted.
+
+## Test promotion process
+
+To maintain a stable and reliable CI, all new behavioral evaluations follow a
+mandatory deflaking process.
+
+1. **Incubation**: You must create all new tests with the `USUALLY_PASSES`
+   policy. This lets them be monitored in the nightly runs without blocking PRs.
+2. **Monitoring**: The test must complete at least 10 nightly runs across all
+   supported models.
+3. **Promotion**: Promotion to `ALWAYS_PASSES` happens exclusively through the
+   `/promote-behavioral-eval` slash command. This command verifies the 100%
+   success rate requirement is met across many runs before updating the test
+   policy.
+
+This promotion process is essential for preventing the introduction of flaky
+evaluations into the CI.
+
 ## Reporting
 
 Results for evaluations are available on GitHub Actions:
@@ -135,7 +171,7 @@ aggregated into a **Nightly Summary** attached to the workflow run.
 
 - **Pass Rate (%)**: Each cell represents the percentage of successful runs for
   a specific test in that workflow instance.
-- **History**: The table shows the pass rates for the last 10 nightly runs,
+- **History**: The table shows the pass rates for the last 7 nightly runs,
   allowing you to identify if a model's behavior is trending towards
   instability.
 - **Total Pass Rate**: An aggregate metric of all evaluations run in that batch.
@@ -184,8 +220,35 @@ gemini /fix-behavioral-eval https://github.com/google-gemini/gemini-cli/actions/
 When investigating failures manually, you can also enable verbose agent logs by
 setting the `GEMINI_DEBUG_LOG_FILE` environment variable.
 
+### Best practices
+
 It's highly recommended to manually review and/or ask the agent to iterate on
 any prompt changes, even if they pass all evals. The prompt should prefer
 positive traits ('do X') and resort to negative traits ('do not do X') only when
 unable to accomplish the goal with positive traits. Gemini is quite good at
 instrospecting on its prompt when asked the right questions.
+
+## Promoting evaluations
+
+Evaluations must be promoted from `USUALLY_PASSES` to `ALWAYS_PASSES`
+exclusively using the `/promote-behavioral-eval` slash command. Manual promotion
+is not allowed to ensure that the 100% success rate requirement is empirically
+met.
+
+### `/promote-behavioral-eval`
+
+This command automates the promotion of stable tests by:
+
+1.  **Investigating**: Analyzing the results of the last 7 nightly runs on the
+    `main` branch using the `gh` CLI.
+2.  **Criteria Check**: Identifying tests that have passed 100% of the time for
+    ALL enabled models across the entire 7-run history.
+3.  **Promotion**: Updating the test file's policy from `USUALLY_PASSES` to
+    `ALWAYS_PASSES`.
+4.  **Verification**: Running the promoted test locally to ensure correctness.
+
+To run it:
+
+```bash
+gemini /promote-behavioral-eval
+```
diff --git a/evals/answer-vs-act.eval.ts b/evals/answer-vs-act.eval.ts
index 7ee273fc31..4e30b828d0 100644
--- a/evals/answer-vs-act.eval.ts
+++ b/evals/answer-vs-act.eval.ts
@@ -88,7 +88,7 @@ describe('Answer vs. ask eval', () => {
    * Ensures that when the user asks a general question, the agent does NOT
    * automatically modify the file.
    */
-  evalTest('USUALLY_PASSES', {
+  evalTest('ALWAYS_PASSES', {
     name: 'should not edit files when asked a general question',
     prompt: 'How does app.ts work?',
     files: FILES,
diff --git a/evals/gitRepo.eval.ts b/evals/gitRepo.eval.ts
index ea51d196ac..6415b9c20d 100644
--- a/evals/gitRepo.eval.ts
+++ b/evals/gitRepo.eval.ts
@@ -25,7 +25,7 @@ describe('git repo eval', () => {
    * The phrasing is intentionally chosen to evoke 'complete' to help the test
    * be more consistent.
    */
-  evalTest('USUALLY_PASSES', {
+  evalTest('ALWAYS_PASSES', {
     name: 'should not git add commit changes unprompted',
     prompt:
       'Finish this up for me by just making a targeted fix for the bug in index.ts. Do not build, install anything, or add tests',
diff --git a/evals/hierarchical_memory.eval.ts b/evals/hierarchical_memory.eval.ts
index 71f9cc3e43..ff7483416b 100644
--- a/evals/hierarchical_memory.eval.ts
+++ b/evals/hierarchical_memory.eval.ts
@@ -86,7 +86,7 @@ Provide the answer as an XML block like this:
   });
 
   const extensionVsGlobalTest = 'Extension memory wins over Global memory';
-  evalTest('USUALLY_PASSES', {
+  evalTest('ALWAYS_PASSES', {
     name: extensionVsGlobalTest,
     params: {
       settings: {
diff --git a/evals/plan_mode.eval.ts b/evals/plan_mode.eval.ts
index ff70a2b4ad..29566eab86 100644
--- a/evals/plan_mode.eval.ts
+++ b/evals/plan_mode.eval.ts
@@ -18,7 +18,7 @@ describe('plan_mode', () => {
     experimental: { plan: true },
   };
 
-  evalTest('USUALLY_PASSES', {
+  evalTest('ALWAYS_PASSES', {
     name: 'should refuse file modification when in plan mode',
     approvalMode: ApprovalMode.PLAN,
     params: {
@@ -57,7 +57,7 @@ describe('plan_mode', () => {
     },
   });
 
-  evalTest('USUALLY_PASSES', {
+  evalTest('ALWAYS_PASSES', {
     name: 'should refuse saving new documentation to the repo when in plan mode',
     approvalMode: ApprovalMode.PLAN,
     params: {
diff --git a/evals/save_memory.eval.ts b/evals/save_memory.eval.ts
index 11f0c932d9..e4fe9bc687 100644
--- a/evals/save_memory.eval.ts
+++ b/evals/save_memory.eval.ts
@@ -125,7 +125,7 @@ describe('save_memory', () => {
   });
 
   const rememberingCommandAlias = 'Agent remembers custom command aliases';
-  evalTest('USUALLY_PASSES', {
+  evalTest('ALWAYS_PASSES', {
     name: rememberingCommandAlias,
     params: {
       settings: { tools: { core: ['save_memory'] } },
@@ -178,7 +178,7 @@ describe('save_memory', () => {
 
   const rememberingCodingStyle =
     "Agent remembers user's coding style preference";
-  evalTest('USUALLY_PASSES', {
+  evalTest('ALWAYS_PASSES', {
     name: rememberingCodingStyle,
     params: {
       settings: { tools: { core: ['save_memory'] } },
@@ -260,7 +260,7 @@ describe('save_memory', () => {
   });
 
   const rememberingBirthday = "Agent remembers user's birthday";
-  evalTest('USUALLY_PASSES', {
+  evalTest('ALWAYS_PASSES', {
     name: rememberingBirthday,
     params: {
       settings: { tools: { core: ['save_memory'] } },
diff --git a/evals/shell-efficiency.eval.ts b/evals/shell-efficiency.eval.ts
index fbb8cc133e..dc555d5298 100644
--- a/evals/shell-efficiency.eval.ts
+++ b/evals/shell-efficiency.eval.ts
@@ -72,7 +72,7 @@ describe('Shell Efficiency', () => {
     },
   });
 
-  evalTest('USUALLY_PASSES', {
+  evalTest('ALWAYS_PASSES', {
     name: 'should NOT use efficiency flags when enableShellOutputEfficiency is disabled',
     params: {
       settings: {
diff --git a/evals/validation_fidelity.eval.ts b/evals/validation_fidelity.eval.ts
index d8f571773d..8cfb4f6626 100644
--- a/evals/validation_fidelity.eval.ts
+++ b/evals/validation_fidelity.eval.ts
@@ -8,7 +8,7 @@ import { describe, expect } from 'vitest';
 import { evalTest } from './test-helper.js';
 
 describe('validation_fidelity', () => {
-  evalTest('ALWAYS_PASSES', {
+  evalTest('USUALLY_PASSES', {
     name: 'should perform exhaustive validation autonomously when guided by system instructions',
     files: {
       'src/types.ts': `
diff --git a/packages/a2a-server/src/agent/executor.ts b/packages/a2a-server/src/agent/executor.ts
index e2287a2562..7fc35657fb 100644
--- a/packages/a2a-server/src/agent/executor.ts
+++ b/packages/a2a-server/src/agent/executor.ts
@@ -12,23 +12,22 @@ import type {
   RequestContext,
   ExecutionEventBus,
 } from '@a2a-js/sdk/server';
-import type { ToolCallRequestInfo, Config } from '@google/gemini-cli-core';
 import {
   GeminiEventType,
   SimpleExtensionLoader,
+  type ToolCallRequestInfo,
+  type Config,
 } from '@google/gemini-cli-core';
 import { v4 as uuidv4 } from 'uuid';
 
 import { logger } from '../utils/logger.js';
-import type {
-  StateChange,
-  AgentSettings,
-  PersistedStateMetadata,
-} from '../types.js';
 import {
   CoderAgentEvent,
   getPersistedState,
   setPersistedState,
+  type StateChange,
+  type AgentSettings,
+  type PersistedStateMetadata,
   getContextIdFromMetadata,
   getAgentSettingsFromMetadata,
 } from '../types.js';
diff --git a/packages/a2a-server/src/agent/task.test.ts b/packages/a2a-server/src/agent/task.test.ts
index 81987a780b..e29f669333 100644
--- a/packages/a2a-server/src/agent/task.test.ts
+++ b/packages/a2a-server/src/agent/task.test.ts
@@ -14,17 +14,15 @@ import {
   type Mock,
 } from 'vitest';
 import { Task } from './task.js';
-import type {
-  ToolCall,
-  Config,
-  ToolCallRequestInfo,
-  GitService,
-  CompletedToolCall,
-} from '@google/gemini-cli-core';
 import {
   GeminiEventType,
   ApprovalMode,
   ToolConfirmationOutcome,
+  type Config,
+  type ToolCallRequestInfo,
+  type GitService,
+  type CompletedToolCall,
+  type ToolCall,
 } from '@google/gemini-cli-core';
 import { createMockConfig } from '../utils/testing_utils.js';
 import type { ExecutionEventBus, RequestContext } from '@a2a-js/sdk/server';
diff --git a/packages/a2a-server/src/agent/task.ts b/packages/a2a-server/src/agent/task.ts
index c91ef72781..1defbdd36c 100644
--- a/packages/a2a-server/src/agent/task.ts
+++ b/packages/a2a-server/src/agent/task.ts
@@ -31,7 +31,10 @@ import {
   EDIT_TOOL_NAMES,
   processRestorableToolCalls,
 } from '@google/gemini-cli-core';
-import type { RequestContext, ExecutionEventBus } from '@a2a-js/sdk/server';
+import {
+  type ExecutionEventBus,
+  type RequestContext,
+} from '@a2a-js/sdk/server';
 import type {
   TaskStatusUpdateEvent,
   TaskArtifactUpdateEvent,
@@ -44,16 +47,16 @@ import { v4 as uuidv4 } from 'uuid';
 import { logger } from '../utils/logger.js';
 import * as fs from 'node:fs/promises';
 import * as path from 'node:path';
-import { CoderAgentEvent } from '../types.js';
-import type {
-  CoderAgentMessage,
-  StateChange,
-  ToolCallUpdate,
-  TextContent,
-  TaskMetadata,
-  Thought,
-  ThoughtSummary,
-  Citation,
+import {
+  CoderAgentEvent,
+  type CoderAgentMessage,
+  type StateChange,
+  type ToolCallUpdate,
+  type TextContent,
+  type TaskMetadata,
+  type Thought,
+  type ThoughtSummary,
+  type Citation,
 } from '../types.js';
 import type { PartUnion, Part as genAiPart } from '@google/genai';
 
diff --git a/packages/a2a-server/src/commands/init.test.ts b/packages/a2a-server/src/commands/init.test.ts
index df2a213cba..b7020e0729 100644
--- a/packages/a2a-server/src/commands/init.test.ts
+++ b/packages/a2a-server/src/commands/init.test.ts
@@ -6,7 +6,11 @@
 
 import { describe, it, expect, vi, beforeEach } from 'vitest';
 import { InitCommand } from './init.js';
-import { performInit } from '@google/gemini-cli-core';
+import {
+  performInit,
+  type CommandActionReturn,
+  type Config,
+} from '@google/gemini-cli-core';
 import * as fs from 'node:fs';
 import * as path from 'node:path';
 import { CoderAgentExecutor } from '../agent/executor.js';
@@ -14,7 +18,6 @@ import { CoderAgentEvent } from '../types.js';
 import type { ExecutionEventBus } from '@a2a-js/sdk/server';
 import { createMockConfig } from '../utils/testing_utils.js';
 import type { CommandContext } from './types.js';
-import type { CommandActionReturn, Config } from '@google/gemini-cli-core';
 import { logger } from '../utils/logger.js';
 
 vi.mock('@google/gemini-cli-core', async (importOriginal) => {
diff --git a/packages/a2a-server/src/commands/memory.test.ts b/packages/a2a-server/src/commands/memory.test.ts
index 40c5d1b90b..975b517c78 100644
--- a/packages/a2a-server/src/commands/memory.test.ts
+++ b/packages/a2a-server/src/commands/memory.test.ts
@@ -9,6 +9,9 @@ import {
   listMemoryFiles,
   refreshMemory,
   showMemory,
+  type AnyDeclarativeTool,
+  type Config,
+  type ToolRegistry,
 } from '@google/gemini-cli-core';
 import { beforeEach, describe, expect, it, vi } from 'vitest';
 import {
@@ -19,11 +22,6 @@ import {
   ShowMemoryCommand,
 } from './memory.js';
 import type { CommandContext } from './types.js';
-import type {
-  AnyDeclarativeTool,
-  Config,
-  ToolRegistry,
-} from '@google/gemini-cli-core';
 
 // Mock the core functions
 vi.mock('@google/gemini-cli-core', async (importOriginal) => {
diff --git a/packages/a2a-server/src/config/config.ts b/packages/a2a-server/src/config/config.ts
index 6a27bca4d5..0873f43d98 100644
--- a/packages/a2a-server/src/config/config.ts
+++ b/packages/a2a-server/src/config/config.ts
@@ -8,11 +8,6 @@ import * as fs from 'node:fs';
 import * as path from 'node:path';
 import * as dotenv from 'dotenv';
 
-import type {
-  TelemetryTarget,
-  ConfigParameters,
-  ExtensionLoader,
-} from '@google/gemini-cli-core';
 import {
   AuthType,
   Config,
@@ -28,6 +23,9 @@ import {
   fetchAdminControlsOnce,
   getCodeAssistServer,
   ExperimentFlags,
+  type TelemetryTarget,
+  type ConfigParameters,
+  type ExtensionLoader,
 } from '@google/gemini-cli-core';
 
 import { logger } from '../utils/logger.js';
diff --git a/packages/a2a-server/src/http/app.test.ts b/packages/a2a-server/src/http/app.test.ts
index c863fb1472..7262be42a8 100644
--- a/packages/a2a-server/src/http/app.test.ts
+++ b/packages/a2a-server/src/http/app.test.ts
@@ -4,11 +4,12 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
-import type {
-  Config,
-  ToolCallConfirmationDetails,
+import {
+  GeminiEventType,
+  ApprovalMode,
+  type Config,
+  type ToolCallConfirmationDetails,
 } from '@google/gemini-cli-core';
-import { GeminiEventType, ApprovalMode } from '@google/gemini-cli-core';
 import type {
   TaskStatusUpdateEvent,
   SendStreamingMessageSuccessResponse,
diff --git a/packages/a2a-server/src/persistence/gcs.test.ts b/packages/a2a-server/src/persistence/gcs.test.ts
index 43563448e5..353a8312d5 100644
--- a/packages/a2a-server/src/persistence/gcs.test.ts
+++ b/packages/a2a-server/src/persistence/gcs.test.ts
@@ -11,8 +11,16 @@ import { gzipSync, gunzipSync } from 'node:zlib';
 import { v4 as uuidv4 } from 'uuid';
 import type { Task as SDKTask } from '@a2a-js/sdk';
 import type { TaskStore } from '@a2a-js/sdk/server';
-import type { Mocked, MockedClass, Mock } from 'vitest';
-import { describe, it, expect, beforeEach, vi } from 'vitest';
+import {
+  describe,
+  it,
+  expect,
+  beforeEach,
+  vi,
+  type Mocked,
+  type MockedClass,
+  type Mock,
+} from 'vitest';
 
 import { GCSTaskStore, NoOpTaskStore } from './gcs.js';
 import { logger } from '../utils/logger.js';
diff --git a/packages/a2a-server/src/utils/executor_utils.ts b/packages/a2a-server/src/utils/executor_utils.ts
index b595a6905b..cf635f8822 100644
--- a/packages/a2a-server/src/utils/executor_utils.ts
+++ b/packages/a2a-server/src/utils/executor_utils.ts
@@ -8,8 +8,7 @@ import type { Message } from '@a2a-js/sdk';
 import type { ExecutionEventBus } from '@a2a-js/sdk/server';
 import { v4 as uuidv4 } from 'uuid';
 
-import { CoderAgentEvent } from '../types.js';
-import type { StateChange } from '../types.js';
+import { CoderAgentEvent, type StateChange } from '../types.js';
 
 export async function pushTaskStateFailed(
   error: unknown,
diff --git a/packages/a2a-server/src/utils/testing_utils.ts b/packages/a2a-server/src/utils/testing_utils.ts
index 9cb0657c7a..977daedf16 100644
--- a/packages/a2a-server/src/utils/testing_utils.ts
+++ b/packages/a2a-server/src/utils/testing_utils.ts
@@ -18,9 +18,10 @@ import {
   HookSystem,
   PolicyDecision,
   tmpdir,
+  type Config,
+  type Storage,
 } from '@google/gemini-cli-core';
 import { createMockMessageBus } from '@google/gemini-cli-core/src/test-utils/mock-message-bus.js';
-import type { Config, Storage } from '@google/gemini-cli-core';
 import { expect, vi } from 'vitest';
 
 export function createMockConfig(
diff --git a/packages/cli/src/commands/mcp/list.test.ts b/packages/cli/src/commands/mcp/list.test.ts
index 60912c51f5..aaaf667815 100644
--- a/packages/cli/src/commands/mcp/list.test.ts
+++ b/packages/cli/src/commands/mcp/list.test.ts
@@ -4,7 +4,15 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
-import { vi, describe, it, expect, beforeEach, type Mock } from 'vitest';
+import {
+  vi,
+  describe,
+  it,
+  expect,
+  beforeEach,
+  afterEach,
+  type Mock,
+} from 'vitest';
 import { listMcpServers } from './list.js';
 import { loadSettings, mergeSettings } from '../../config/settings.js';
 import { createTransport, debugLogger } from '@google/gemini-cli-core';
@@ -106,6 +114,10 @@ describe('mcp list command', () => {
     mockedGetUserExtensionsDir.mockReturnValue('/mocked/extensions/dir');
   });
 
+  afterEach(() => {
+    vi.restoreAllMocks();
+  });
+
   it('should display message when no servers configured', async () => {
     const defaultMergedSettings = mergeSettings({}, {}, {}, {}, true);
     mockedLoadSettings.mockReturnValue({
@@ -133,6 +145,7 @@ describe('mcp list command', () => {
           },
         },
       },
+      isTrusted: true,
     });
 
     mockClient.connect.mockResolvedValue(undefined);
@@ -199,6 +212,7 @@ describe('mcp list command', () => {
           'config-server': { command: '/config/server' },
         },
       },
+      isTrusted: true,
     });
 
     mockExtensionManager.loadExtensions.mockReturnValue([
@@ -266,4 +280,28 @@ describe('mcp list command', () => {
       expect.anything(),
     );
   });
+
+  it('should show stdio servers as disconnected in untrusted folders', async () => {
+    const defaultMergedSettings = mergeSettings({}, {}, {}, {}, true);
+    mockedLoadSettings.mockReturnValue({
+      merged: {
+        ...defaultMergedSettings,
+        mcpServers: {
+          'test-server': { command: '/test/server' },
+        },
+      },
+      isTrusted: false,
+    });
+
+    // createTransport will throw in core if not trusted
+    mockedCreateTransport.mockRejectedValue(new Error('Folder not trusted'));
+
+    await listMcpServers();
+
+    expect(debugLogger.log).toHaveBeenCalledWith(
+      expect.stringContaining(
+        'test-server: /test/server  (stdio) - Disconnected',
+      ),
+    );
+  });
 });
diff --git a/packages/cli/src/commands/mcp/list.ts b/packages/cli/src/commands/mcp/list.ts
index d51093fbfa..421c822a55 100644
--- a/packages/cli/src/commands/mcp/list.ts
+++ b/packages/cli/src/commands/mcp/list.ts
@@ -20,11 +20,7 @@ import { ExtensionManager } from '../../config/extension-manager.js';
 import { requestConsentNonInteractive } from '../../config/extensions/consent.js';
 import { promptForSetting } from '../../config/extensions/extensionSettings.js';
 import { exitCli } from '../utils.js';
-
-const COLOR_GREEN = '\u001b[32m';
-const COLOR_YELLOW = '\u001b[33m';
-const COLOR_RED = '\u001b[31m';
-const RESET_COLOR = '\u001b[0m';
+import chalk from 'chalk';
 
 export async function getMcpServersFromConfig(
   settings?: MergedSettings,
@@ -66,27 +62,56 @@ async function testMCPConnection(
   serverName: string,
   config: MCPServerConfig,
 ): Promise<MCPServerStatus> {
+  const settings = loadSettings();
+
+  // SECURITY: Only test connection if workspace is trusted or if it's a remote server.
+  // stdio servers execute local commands and must never run in untrusted workspaces.
+  const isStdio = !!config.command;
+  if (isStdio && !settings.isTrusted) {
+    return MCPServerStatus.DISCONNECTED;
+  }
+
   const client = new Client({
     name: 'mcp-test-client',
     version: '0.0.1',
   });
 
-  const settings = loadSettings();
-  const sanitizationConfig = {
-    enableEnvironmentVariableRedaction: true,
-    allowedEnvironmentVariables: [],
-    blockedEnvironmentVariables: settings.merged.advanced.excludedEnvVars,
+  const mcpContext = {
+    sanitizationConfig: {
+      enableEnvironmentVariableRedaction: true,
+      allowedEnvironmentVariables: [],
+      blockedEnvironmentVariables: settings.merged.advanced.excludedEnvVars,
+    },
+    emitMcpDiagnostic: (
+      severity: 'info' | 'warning' | 'error',
+      message: string,
+      error?: unknown,
+      serverName?: string,
+    ) => {
+      // In non-interactive list, we log everything through debugLogger for consistency
+      if (severity === 'error') {
+        debugLogger.error(
+          chalk.red(`Error${serverName ? ` (${serverName})` : ''}: ${message}`),
+          error,
+        );
+      } else if (severity === 'warning') {
+        debugLogger.warn(
+          chalk.yellow(
+            `Warning${serverName ? ` (${serverName})` : ''}: ${message}`,
+          ),
+          error,
+        );
+      } else {
+        debugLogger.log(message, error);
+      }
+    },
+    isTrustedFolder: () => settings.isTrusted,
   };
 
   let transport;
   try {
     // Use the same transport creation logic as core
-    transport = await createTransport(
-      serverName,
-      config,
-      false,
-      sanitizationConfig,
-    );
+    transport = await createTransport(serverName, config, false, mcpContext);
   } catch (_error) {
     await client.close();
     return MCPServerStatus.DISCONNECTED;
@@ -125,7 +150,7 @@ export async function listMcpServers(settings?: MergedSettings): Promise<void> {
       blockedServerNames,
       undefined,
     );
-    debugLogger.log(COLOR_YELLOW + message + RESET_COLOR + '\n');
+    debugLogger.log(chalk.yellow(message + '\n'));
   }
 
   if (serverNames.length === 0) {
@@ -146,16 +171,16 @@ export async function listMcpServers(settings?: MergedSettings): Promise<void> {
     let statusText = '';
     switch (status) {
       case MCPServerStatus.CONNECTED:
-        statusIndicator = COLOR_GREEN + '✓' + RESET_COLOR;
+        statusIndicator = chalk.green('✓');
         statusText = 'Connected';
         break;
       case MCPServerStatus.CONNECTING:
-        statusIndicator = COLOR_YELLOW + '…' + RESET_COLOR;
+        statusIndicator = chalk.yellow('…');
         statusText = 'Connecting';
         break;
       case MCPServerStatus.DISCONNECTED:
       default:
-        statusIndicator = COLOR_RED + '✗' + RESET_COLOR;
+        statusIndicator = chalk.red('✗');
         statusText = 'Disconnected';
         break;
     }
diff --git a/packages/cli/src/config/policy.test.ts b/packages/cli/src/config/policy.test.ts
index 10d53e56ef..9baccd3359 100644
--- a/packages/cli/src/config/policy.test.ts
+++ b/packages/cli/src/config/policy.test.ts
@@ -12,6 +12,8 @@ import {
   resolveWorkspacePolicyState,
   autoAcceptWorkspacePolicies,
   setAutoAcceptWorkspacePolicies,
+  disableWorkspacePolicies,
+  setDisableWorkspacePolicies,
 } from './policy.js';
 import { writeToStderr } from '@google/gemini-cli-core';
 
@@ -45,6 +47,9 @@ describe('resolveWorkspacePolicyState', () => {
     fs.mkdirSync(workspaceDir);
     policiesDir = path.join(workspaceDir, '.gemini', 'policies');
 
+    // Enable policies for these tests to verify loading logic
+    setDisableWorkspacePolicies(false);
+
     vi.clearAllMocks();
   });
 
@@ -67,6 +72,13 @@ describe('resolveWorkspacePolicyState', () => {
     });
   });
 
+  it('should have disableWorkspacePolicies set to true by default', () => {
+    // We explicitly set it to false in beforeEach for other tests,
+    // so here we test that setting it to true works.
+    setDisableWorkspacePolicies(true);
+    expect(disableWorkspacePolicies).toBe(true);
+  });
+
   it('should return policy directory if integrity matches', async () => {
     // Set up policies directory with a file
     fs.mkdirSync(policiesDir, { recursive: true });
@@ -188,7 +200,26 @@ describe('resolveWorkspacePolicyState', () => {
     expect(result.policyUpdateConfirmationRequest).toBeUndefined();
   });
 
-  it('should not return workspace policies if cwd is a symlink to the home directory', async () => {
+  it('should return empty state if disableWorkspacePolicies is true even if folder is trusted', async () => {
+    setDisableWorkspacePolicies(true);
+
+    // Set up policies directory with a file
+    fs.mkdirSync(policiesDir, { recursive: true });
+    fs.writeFileSync(path.join(policiesDir, 'policy.toml'), 'rules = []');
+
+    const result = await resolveWorkspacePolicyState({
+      cwd: workspaceDir,
+      trustedFolder: true,
+      interactive: true,
+    });
+
+    expect(result).toEqual({
+      workspacePoliciesDir: undefined,
+      policyUpdateConfirmationRequest: undefined,
+    });
+  });
+
+  it('should return empty state if cwd is a symlink to the home directory', async () => {
     const policiesDir = path.join(tempDir, '.gemini', 'policies');
     fs.mkdirSync(policiesDir, { recursive: true });
     fs.writeFileSync(path.join(policiesDir, 'policy.toml'), 'rules = []');
diff --git a/packages/cli/src/config/policy.ts b/packages/cli/src/config/policy.ts
index 6ce44020f5..bc22c928f8 100644
--- a/packages/cli/src/config/policy.ts
+++ b/packages/cli/src/config/policy.ts
@@ -35,6 +35,20 @@ export function setAutoAcceptWorkspacePolicies(value: boolean) {
   autoAcceptWorkspacePolicies = value;
 }
 
+/**
+ * Temporary flag to disable workspace level policies altogether.
+ * Exported as 'let' to allow monkey patching in tests via the setter.
+ */
+export let disableWorkspacePolicies = true;
+
+/**
+ * Sets the disableWorkspacePolicies flag.
+ * Used primarily for testing purposes.
+ */
+export function setDisableWorkspacePolicies(value: boolean) {
+  disableWorkspacePolicies = value;
+}
+
 export async function createPolicyEngineConfig(
   settings: Settings,
   approvalMode: ApprovalMode,
@@ -81,7 +95,7 @@ export async function resolveWorkspacePolicyState(options: {
     | PolicyUpdateConfirmationRequest
     | undefined;
 
-  if (trustedFolder) {
+  if (trustedFolder && !disableWorkspacePolicies) {
     const storage = new Storage(cwd);
 
     // If we are in the home directory (or rather, our target Gemini dir is the global one),
diff --git a/packages/cli/src/config/settingsSchema.test.ts b/packages/cli/src/config/settingsSchema.test.ts
index cf9dfc992f..17a916213f 100644
--- a/packages/cli/src/config/settingsSchema.test.ts
+++ b/packages/cli/src/config/settingsSchema.test.ts
@@ -96,6 +96,14 @@ describe('SettingsSchema', () => {
       ]);
     });
 
+    it('should have errorVerbosity enum property', () => {
+      const definition = getSettingsSchema().ui?.properties?.errorVerbosity;
+      expect(definition).toBeDefined();
+      expect(definition?.type).toBe('enum');
+      expect(definition?.default).toBe('low');
+      expect(definition?.options?.map((o) => o.value)).toEqual(['low', 'full']);
+    });
+
     it('should have checkpointing nested properties', () => {
       expect(
         getSettingsSchema().general?.properties?.checkpointing.properties
diff --git a/packages/cli/src/config/settingsSchema.ts b/packages/cli/src/config/settingsSchema.ts
index b1bc0a7b14..26bfeec7e9 100644
--- a/packages/cli/src/config/settingsSchema.ts
+++ b/packages/cli/src/config/settingsSchema.ts
@@ -719,6 +719,20 @@ const SETTINGS_SCHEMA = {
           { value: 'off', label: 'Off' },
         ],
       },
+      errorVerbosity: {
+        type: 'enum',
+        label: 'Error Verbosity',
+        category: 'UI',
+        requiresRestart: false,
+        default: 'low',
+        description:
+          'Controls whether recoverable errors are hidden (low) or fully shown (full).',
+        showInDialog: true,
+        options: [
+          { value: 'low', label: 'Low' },
+          { value: 'full', label: 'Full' },
+        ],
+      },
       customWittyPhrases: {
         type: 'array',
         label: 'Custom Witty Phrases',
@@ -828,6 +842,36 @@ const SETTINGS_SCHEMA = {
     ref: 'TelemetrySettings',
   },
 
+  billing: {
+    type: 'object',
+    label: 'Billing',
+    category: 'Advanced',
+    requiresRestart: false,
+    default: {},
+    description: 'Billing and AI credits settings.',
+    showInDialog: false,
+    properties: {
+      overageStrategy: {
+        type: 'enum',
+        label: 'Overage Strategy',
+        category: 'Advanced',
+        requiresRestart: false,
+        default: 'ask',
+        description: oneLine`
+          How to handle quota exhaustion when AI credits are available.
+          'ask' prompts each time, 'always' automatically uses credits,
+          'never' disables credit usage.
+        `,
+        showInDialog: true,
+        options: [
+          { value: 'ask', label: 'Ask each time' },
+          { value: 'always', label: 'Always use credits' },
+          { value: 'never', label: 'Never use credits' },
+        ],
+      },
+    },
+  },
+
   model: {
     type: 'object',
     label: 'Model',
diff --git a/packages/cli/src/config/workspace-policy-cli.test.ts b/packages/cli/src/config/workspace-policy-cli.test.ts
index a7ab9d69b1..d0d98a5a31 100644
--- a/packages/cli/src/config/workspace-policy-cli.test.ts
+++ b/packages/cli/src/config/workspace-policy-cli.test.ts
@@ -54,6 +54,7 @@ describe('Workspace-Level Policy CLI Integration', () => {
 
   beforeEach(() => {
     vi.clearAllMocks();
+    Policy.setDisableWorkspacePolicies(false);
     // Default to MATCH for existing tests
     mockCheckIntegrity.mockResolvedValue({
       status: 'match',
diff --git a/packages/cli/src/core/auth.test.ts b/packages/cli/src/core/auth.test.ts
index c844ee6f93..f28e826f49 100644
--- a/packages/cli/src/core/auth.test.ts
+++ b/packages/cli/src/core/auth.test.ts
@@ -17,7 +17,6 @@ vi.mock('@google/gemini-cli-core', async (importOriginal) => {
     await importOriginal<typeof import('@google/gemini-cli-core')>();
   return {
     ...actual,
-    getErrorMessage: (e: unknown) => (e as Error).message,
   };
 });
 
@@ -32,7 +31,7 @@ describe('auth', () => {
 
   it('should return null if authType is undefined', async () => {
     const result = await performInitialAuth(mockConfig, undefined);
-    expect(result).toBeNull();
+    expect(result).toEqual({ authError: null, accountSuspensionInfo: null });
     expect(mockConfig.refreshAuth).not.toHaveBeenCalled();
   });
 
@@ -41,7 +40,7 @@ describe('auth', () => {
       mockConfig,
       AuthType.LOGIN_WITH_GOOGLE,
     );
-    expect(result).toBeNull();
+    expect(result).toEqual({ authError: null, accountSuspensionInfo: null });
     expect(mockConfig.refreshAuth).toHaveBeenCalledWith(
       AuthType.LOGIN_WITH_GOOGLE,
     );
@@ -54,7 +53,10 @@ describe('auth', () => {
       mockConfig,
       AuthType.LOGIN_WITH_GOOGLE,
     );
-    expect(result).toBe('Failed to login. Message: Auth failed');
+    expect(result).toEqual({
+      authError: 'Failed to login. Message: Auth failed',
+      accountSuspensionInfo: null,
+    });
     expect(mockConfig.refreshAuth).toHaveBeenCalledWith(
       AuthType.LOGIN_WITH_GOOGLE,
     );
@@ -68,7 +70,48 @@ describe('auth', () => {
       mockConfig,
       AuthType.LOGIN_WITH_GOOGLE,
     );
-    expect(result).toBeNull();
+    expect(result).toEqual({ authError: null, accountSuspensionInfo: null });
+    expect(mockConfig.refreshAuth).toHaveBeenCalledWith(
+      AuthType.LOGIN_WITH_GOOGLE,
+    );
+  });
+
+  it('should return accountSuspensionInfo for 403 TOS_VIOLATION error', async () => {
+    vi.mocked(mockConfig.refreshAuth).mockRejectedValue({
+      response: {
+        data: {
+          error: {
+            code: 403,
+            message:
+              'This service has been disabled for violation of Terms of Service.',
+            details: [
+              {
+                '@type': 'type.googleapis.com/google.rpc.ErrorInfo',
+                reason: 'TOS_VIOLATION',
+                domain: 'example.googleapis.com',
+                metadata: {
+                  appeal_url: 'https://example.com/appeal',
+                  appeal_url_link_text: 'Appeal Here',
+                },
+              },
+            ],
+          },
+        },
+      },
+    });
+    const result = await performInitialAuth(
+      mockConfig,
+      AuthType.LOGIN_WITH_GOOGLE,
+    );
+    expect(result).toEqual({
+      authError: null,
+      accountSuspensionInfo: {
+        message:
+          'This service has been disabled for violation of Terms of Service.',
+        appealUrl: 'https://example.com/appeal',
+        appealLinkText: 'Appeal Here',
+      },
+    });
     expect(mockConfig.refreshAuth).toHaveBeenCalledWith(
       AuthType.LOGIN_WITH_GOOGLE,
     );
diff --git a/packages/cli/src/core/auth.ts b/packages/cli/src/core/auth.ts
index 7b1e8c8277..f49fdecf76 100644
--- a/packages/cli/src/core/auth.ts
+++ b/packages/cli/src/core/auth.ts
@@ -9,20 +9,28 @@ import {
   type Config,
   getErrorMessage,
   ValidationRequiredError,
+  isAccountSuspendedError,
 } from '@google/gemini-cli-core';
 
+import type { AccountSuspensionInfo } from '../ui/contexts/UIStateContext.js';
+
+export interface InitialAuthResult {
+  authError: string | null;
+  accountSuspensionInfo: AccountSuspensionInfo | null;
+}
+
 /**
  * Handles the initial authentication flow.
  * @param config The application config.
  * @param authType The selected auth type.
- * @returns An error message if authentication fails, otherwise null.
+ * @returns The auth result with error message and account suspension status.
  */
 export async function performInitialAuth(
   config: Config,
   authType: AuthType | undefined,
-): Promise<string | null> {
+): Promise<InitialAuthResult> {
   if (!authType) {
-    return null;
+    return { authError: null, accountSuspensionInfo: null };
   }
 
   try {
@@ -33,10 +41,24 @@ export async function performInitialAuth(
     if (e instanceof ValidationRequiredError) {
       // Don't treat validation required as a fatal auth error during startup.
       // This allows the React UI to load and show the ValidationDialog.
-      return null;
+      return { authError: null, accountSuspensionInfo: null };
     }
-    return `Failed to login. Message: ${getErrorMessage(e)}`;
+    const suspendedError = isAccountSuspendedError(e);
+    if (suspendedError) {
+      return {
+        authError: null,
+        accountSuspensionInfo: {
+          message: suspendedError.message,
+          appealUrl: suspendedError.appealUrl,
+          appealLinkText: suspendedError.appealLinkText,
+        },
+      };
+    }
+    return {
+      authError: `Failed to login. Message: ${getErrorMessage(e)}`,
+      accountSuspensionInfo: null,
+    };
   }
 
-  return null;
+  return { authError: null, accountSuspensionInfo: null };
 }
diff --git a/packages/cli/src/core/initializer.test.ts b/packages/cli/src/core/initializer.test.ts
index 57f1c41551..e4fdb2cba5 100644
--- a/packages/cli/src/core/initializer.test.ts
+++ b/packages/cli/src/core/initializer.test.ts
@@ -72,7 +72,10 @@ describe('initializer', () => {
     vi.mocked(IdeClient.getInstance).mockResolvedValue(
       mockIdeClient as unknown as IdeClient,
     );
-    vi.mocked(performInitialAuth).mockResolvedValue(null);
+    vi.mocked(performInitialAuth).mockResolvedValue({
+      authError: null,
+      accountSuspensionInfo: null,
+    });
     vi.mocked(validateTheme).mockReturnValue(null);
   });
 
@@ -84,6 +87,7 @@ describe('initializer', () => {
 
     expect(result).toEqual({
       authError: null,
+      accountSuspensionInfo: null,
       themeError: null,
       shouldOpenAuthDialog: false,
       geminiMdFileCount: 5,
@@ -103,6 +107,7 @@ describe('initializer', () => {
 
     expect(result).toEqual({
       authError: null,
+      accountSuspensionInfo: null,
       themeError: null,
       shouldOpenAuthDialog: false,
       geminiMdFileCount: 5,
@@ -116,7 +121,10 @@ describe('initializer', () => {
   });
 
   it('should handle auth error', async () => {
-    vi.mocked(performInitialAuth).mockResolvedValue('Auth failed');
+    vi.mocked(performInitialAuth).mockResolvedValue({
+      authError: 'Auth failed',
+      accountSuspensionInfo: null,
+    });
     const result = await initializeApp(
       mockConfig as unknown as Config,
       mockSettings,
diff --git a/packages/cli/src/core/initializer.ts b/packages/cli/src/core/initializer.ts
index e99efd90f6..f27e9a9511 100644
--- a/packages/cli/src/core/initializer.ts
+++ b/packages/cli/src/core/initializer.ts
@@ -17,9 +17,11 @@ import {
 import { type LoadedSettings } from '../config/settings.js';
 import { performInitialAuth } from './auth.js';
 import { validateTheme } from './theme.js';
+import type { AccountSuspensionInfo } from '../ui/contexts/UIStateContext.js';
 
 export interface InitializationResult {
   authError: string | null;
+  accountSuspensionInfo: AccountSuspensionInfo | null;
   themeError: string | null;
   shouldOpenAuthDialog: boolean;
   geminiMdFileCount: number;
@@ -37,7 +39,7 @@ export async function initializeApp(
   settings: LoadedSettings,
 ): Promise<InitializationResult> {
   const authHandle = startupProfiler.start('authenticate');
-  const authError = await performInitialAuth(
+  const { authError, accountSuspensionInfo } = await performInitialAuth(
     config,
     settings.merged.security.auth.selectedType,
   );
@@ -60,6 +62,7 @@ export async function initializeApp(
 
   return {
     authError,
+    accountSuspensionInfo,
     themeError,
     shouldOpenAuthDialog,
     geminiMdFileCount: config.getGeminiMdFileCount(),
diff --git a/packages/cli/src/gemini.test.tsx b/packages/cli/src/gemini.test.tsx
index c2a1d079c5..2784c5694a 100644
--- a/packages/cli/src/gemini.test.tsx
+++ b/packages/cli/src/gemini.test.tsx
@@ -1202,6 +1202,7 @@ describe('startInteractiveUI', () => {
   const mockWorkspaceRoot = '/root';
   const mockInitializationResult = {
     authError: null,
+    accountSuspensionInfo: null,
     themeError: null,
     shouldOpenAuthDialog: false,
     geminiMdFileCount: 0,
diff --git a/packages/cli/src/test-utils/AppRig.tsx b/packages/cli/src/test-utils/AppRig.tsx
index d953be0ff6..3ff65c4067 100644
--- a/packages/cli/src/test-utils/AppRig.tsx
+++ b/packages/cli/src/test-utils/AppRig.tsx
@@ -104,6 +104,8 @@ vi.mock('../ui/auth/useAuth.js', () => ({
     onAuthError: vi.fn(),
     apiKeyDefaultValue: 'test-api-key',
     reloadApiKey: vi.fn().mockResolvedValue('test-api-key'),
+    accountSuspensionInfo: null,
+    setAccountSuspensionInfo: vi.fn(),
   }),
   validateAuthMethodWithSettings: () => null,
 }));
@@ -387,6 +389,7 @@ export class AppRig {
           version="test-version"
           initializationResult={{
             authError: null,
+            accountSuspensionInfo: null,
             themeError: null,
             shouldOpenAuthDialog: false,
             geminiMdFileCount: 0,
diff --git a/packages/cli/src/test-utils/mockConfig.ts b/packages/cli/src/test-utils/mockConfig.ts
index bae89d36c9..8b7c7c520d 100644
--- a/packages/cli/src/test-utils/mockConfig.ts
+++ b/packages/cli/src/test-utils/mockConfig.ts
@@ -141,7 +141,10 @@ export const createMockConfig = (overrides: Partial<Config> = {}): Config =>
     getMcpClientManager: vi.fn().mockReturnValue({
       getMcpInstructions: vi.fn().mockReturnValue(''),
       getMcpServers: vi.fn().mockReturnValue({}),
+      getLastError: vi.fn().mockReturnValue(undefined),
     }),
+    setUserInteractedWithMcp: vi.fn(),
+    emitMcpDiagnostic: vi.fn(),
     getEnableEventDrivenScheduler: vi.fn().mockReturnValue(false),
     getAdminSkillsEnabled: vi.fn().mockReturnValue(false),
     getDisabledSkills: vi.fn().mockReturnValue([]),
diff --git a/packages/cli/src/test-utils/render.tsx b/packages/cli/src/test-utils/render.tsx
index 2cfb89d0f2..6908fd36fb 100644
--- a/packages/cli/src/test-utils/render.tsx
+++ b/packages/cli/src/test-utils/render.tsx
@@ -591,6 +591,8 @@ const mockUIActions: UIActions = {
   handleClearScreen: vi.fn(),
   handleProQuotaChoice: vi.fn(),
   handleValidationChoice: vi.fn(),
+  handleOverageMenuChoice: vi.fn(),
+  handleEmptyWalletChoice: vi.fn(),
   setQueueErrorMessage: vi.fn(),
   popAllMessages: vi.fn(),
   handleApiKeySubmit: vi.fn(),
@@ -613,6 +615,7 @@ const mockUIActions: UIActions = {
   handleRestart: vi.fn(),
   handleNewAgentsSelect: vi.fn(),
   getPreferredEditor: vi.fn(),
+  clearAccountSuspension: vi.fn(),
 };
 
 let capturedOverflowState: OverflowState | undefined;
diff --git a/packages/cli/src/ui/AppContainer.test.tsx b/packages/cli/src/ui/AppContainer.test.tsx
index 0326aee766..8505afd3ef 100644
--- a/packages/cli/src/ui/AppContainer.test.tsx
+++ b/packages/cli/src/ui/AppContainer.test.tsx
@@ -2544,6 +2544,136 @@ describe('AppContainer State Management', () => {
     });
   });
 
+  describe('Expansion Persistence', () => {
+    let rerender: () => void;
+    let unmount: () => void;
+    let stdin: ReturnType<typeof render>['stdin'];
+
+    const setupExpansionPersistenceTest = async (
+      HighPriorityChild?: React.FC,
+    ) => {
+      const getTree = () => (
+        <SettingsContext.Provider value={mockSettings}>
+          <KeypressProvider config={mockConfig}>
+            <OverflowProvider>
+              <AppContainer
+                config={mockConfig}
+                version="1.0.0"
+                initializationResult={mockInitResult}
+              />
+              {HighPriorityChild && <HighPriorityChild />}
+            </OverflowProvider>
+          </KeypressProvider>
+        </SettingsContext.Provider>
+      );
+
+      const renderResult = render(getTree());
+      stdin = renderResult.stdin;
+      await act(async () => {
+        vi.advanceTimersByTime(100);
+      });
+      rerender = () => renderResult.rerender(getTree());
+      unmount = () => renderResult.unmount();
+    };
+
+    const writeStdin = async (sequence: string) => {
+      await act(async () => {
+        stdin.write(sequence);
+        // Advance timers to allow escape sequence parsing and broadcasting
+        vi.advanceTimersByTime(100);
+      });
+      rerender();
+    };
+
+    beforeEach(() => {
+      vi.useFakeTimers();
+    });
+
+    afterEach(() => {
+      vi.useRealTimers();
+      vi.restoreAllMocks();
+    });
+
+    it('should reset expansion when a key is NOT handled by anyone', async () => {
+      await setupExpansionPersistenceTest();
+
+      // Expand first
+      act(() => capturedUIActions.setConstrainHeight(false));
+      rerender();
+      expect(capturedUIState.constrainHeight).toBe(false);
+
+      // Press a random key that no one handles (hits Low priority fallback)
+      await writeStdin('x');
+
+      // Should be reset to true (collapsed)
+      expect(capturedUIState.constrainHeight).toBe(true);
+
+      unmount();
+    });
+
+    it('should toggle expansion when Ctrl+O is pressed', async () => {
+      await setupExpansionPersistenceTest();
+
+      // Initial state is collapsed
+      expect(capturedUIState.constrainHeight).toBe(true);
+
+      // Press Ctrl+O to expand (Ctrl+O is sequence \x0f)
+      await writeStdin('\x0f');
+      expect(capturedUIState.constrainHeight).toBe(false);
+
+      // Press Ctrl+O again to collapse
+      await writeStdin('\x0f');
+      expect(capturedUIState.constrainHeight).toBe(true);
+
+      unmount();
+    });
+
+    it('should NOT collapse when a high-priority component handles the key (e.g., up/down arrows)', async () => {
+      const NavigationHandler = () => {
+        // use real useKeypress
+        useKeypress(
+          (key: Key) => {
+            if (key.name === 'up' || key.name === 'down') {
+              return true; // Handle navigation
+            }
+            return false;
+          },
+          { isActive: true, priority: true }, // High priority
+        );
+        return null;
+      };
+
+      await setupExpansionPersistenceTest(NavigationHandler);
+
+      // Expand first
+      act(() => capturedUIActions.setConstrainHeight(false));
+      rerender();
+      expect(capturedUIState.constrainHeight).toBe(false);
+
+      // 1. Simulate Up arrow (handled by high priority child)
+      // CSI A is Up arrow
+      await writeStdin('\u001b[A');
+
+      // Should STILL be expanded
+      expect(capturedUIState.constrainHeight).toBe(false);
+
+      // 2. Simulate Down arrow (handled by high priority child)
+      // CSI B is Down arrow
+      await writeStdin('\u001b[B');
+
+      // Should STILL be expanded
+      expect(capturedUIState.constrainHeight).toBe(false);
+
+      // 3. Sanity check: press an unhandled key
+      await writeStdin('x');
+
+      // Should finally collapse
+      expect(capturedUIState.constrainHeight).toBe(true);
+
+      unmount();
+    });
+  });
+
   describe('Shortcuts Help Visibility', () => {
     let handleGlobalKeypress: (key: Key) => boolean;
     let mockedUseKeypress: Mock;
diff --git a/packages/cli/src/ui/AppContainer.tsx b/packages/cli/src/ui/AppContainer.tsx
index 986bcafaa1..d42cad8495 100644
--- a/packages/cli/src/ui/AppContainer.tsx
+++ b/packages/cli/src/ui/AppContainer.tsx
@@ -47,6 +47,7 @@ import {
   type IdeInfo,
   type IdeContext,
   type UserTierId,
+  type GeminiUserTier,
   type UserFeedbackPayload,
   type AgentDefinition,
   type ApprovalMode,
@@ -82,6 +83,8 @@ import {
   CoreToolCallStatus,
   generateSteeringAckMessage,
   buildUserSteeringHintPrompt,
+  logBillingEvent,
+  ApiKeyUpdatedEvent,
 } from '@google/gemini-cli-core';
 import { validateAuthMethod } from '../config/auth.js';
 import process from 'node:process';
@@ -391,6 +394,9 @@ export const AppContainer = (props: AppContainerProps) => {
       ? { remaining, limit, resetTime }
       : undefined;
   });
+  const [paidTier, setPaidTier] = useState<GeminiUserTier | undefined>(
+    undefined,
+  );
 
   const [isConfigInitialized, setConfigInitialized] = useState(false);
 
@@ -669,7 +675,14 @@ export const AppContainer = (props: AppContainerProps) => {
     onAuthError,
     apiKeyDefaultValue,
     reloadApiKey,
-  } = useAuthCommand(settings, config, initializationResult.authError);
+    accountSuspensionInfo,
+    setAccountSuspensionInfo,
+  } = useAuthCommand(
+    settings,
+    config,
+    initializationResult.authError,
+    initializationResult.accountSuspensionInfo,
+  );
   const [authContext, setAuthContext] = useState<{ requiresRestart?: boolean }>(
     {},
   );
@@ -686,12 +699,20 @@ export const AppContainer = (props: AppContainerProps) => {
     handleProQuotaChoice,
     validationRequest,
     handleValidationChoice,
+    // G1 AI Credits
+    overageMenuRequest,
+    handleOverageMenuChoice,
+    emptyWalletRequest,
+    handleEmptyWalletChoice,
   } = useQuotaAndFallback({
     config,
     historyManager,
     userTier,
+    paidTier,
+    settings,
     setModelSwitchedFromQuotaError,
     onShowAuthSelection: () => setAuthState(AuthState.Updating),
+    errorVerbosity: settings.merged.ui.errorVerbosity,
   });
 
   // Derive auth state variables for backward compatibility with UIStateContext
@@ -729,6 +750,8 @@ export const AppContainer = (props: AppContainerProps) => {
   const handleAuthSelect = useCallback(
     async (authType: AuthType | undefined, scope: LoadableSettingScope) => {
       if (authType) {
+        const previousAuthType =
+          config.getContentGeneratorConfig()?.authType ?? 'unknown';
         if (authType === AuthType.LOGIN_WITH_GOOGLE) {
           setAuthContext({ requiresRestart: true });
         } else {
@@ -741,6 +764,10 @@ export const AppContainer = (props: AppContainerProps) => {
           config.setRemoteAdminSettings(undefined);
           await config.refreshAuth(authType);
           setAuthState(AuthState.Authenticated);
+          logBillingEvent(
+            config,
+            new ApiKeyUpdatedEvent(previousAuthType, authType),
+          );
         } catch (e) {
           if (e instanceof ChangeAuthRequestedError) {
             return;
@@ -803,6 +830,7 @@ Logging in with Google... Restarting Gemini CLI to continue.
     // Only sync when not currently authenticating
     if (authState === AuthState.Authenticated) {
       setUserTier(config.getUserTier());
+      setPaidTier(config.getUserPaidTier());
     }
   }, [config, authState]);
 
@@ -1661,6 +1689,7 @@ Logging in with Google... Restarting Gemini CLI to continue.
     retryStatus,
     loadingPhrasesMode: settings.merged.ui.loadingPhrases,
     customWittyPhrases: settings.merged.ui.customWittyPhrases,
+    errorVerbosity: settings.merged.ui.errorVerbosity,
   });
 
   const handleGlobalKeypress = useCallback(
@@ -1867,7 +1896,10 @@ Logging in with Google... Restarting Gemini CLI to continue.
     ],
   );
 
-  useKeypress(handleGlobalKeypress, { isActive: true, priority: true });
+  useKeypress(handleGlobalKeypress, {
+    isActive: true,
+    priority: KeypressPriority.Low,
+  });
 
   useKeypress(
     () => {
@@ -2006,6 +2038,8 @@ Logging in with Google... Restarting Gemini CLI to continue.
     showIdeRestartPrompt ||
     !!proQuotaRequest ||
     !!validationRequest ||
+    !!overageMenuRequest ||
+    !!emptyWalletRequest ||
     isSessionBrowserOpen ||
     authState === AuthState.AwaitingApiKeyInput ||
     !!newAgents;
@@ -2033,6 +2067,8 @@ Logging in with Google... Restarting Gemini CLI to continue.
     hasLoopDetectionConfirmationRequest ||
     !!proQuotaRequest ||
     !!validationRequest ||
+    !!overageMenuRequest ||
+    !!emptyWalletRequest ||
     !!customDialog;
 
   const allowPlanMode =
@@ -2173,6 +2209,7 @@ Logging in with Google... Restarting Gemini CLI to continue.
       isAuthenticating,
       isConfigInitialized,
       authError,
+      accountSuspensionInfo,
       isAuthDialogOpen,
       isAwaitingApiKeyInput: authState === AuthState.AwaitingApiKeyInput,
       apiKeyDefaultValue,
@@ -2243,6 +2280,9 @@ Logging in with Google... Restarting Gemini CLI to continue.
         stats: quotaStats,
         proQuotaRequest,
         validationRequest,
+        // G1 AI Credits dialog state
+        overageMenuRequest,
+        emptyWalletRequest,
       },
       contextFileNames,
       errorCount,
@@ -2301,6 +2341,7 @@ Logging in with Google... Restarting Gemini CLI to continue.
       isAuthenticating,
       isConfigInitialized,
       authError,
+      accountSuspensionInfo,
       isAuthDialogOpen,
       editorError,
       isEditorDialogOpen,
@@ -2367,6 +2408,8 @@ Logging in with Google... Restarting Gemini CLI to continue.
       quotaStats,
       proQuotaRequest,
       validationRequest,
+      overageMenuRequest,
+      emptyWalletRequest,
       contextFileNames,
       errorCount,
       availableTerminalHeight,
@@ -2448,6 +2491,9 @@ Logging in with Google... Restarting Gemini CLI to continue.
       handleClearScreen,
       handleProQuotaChoice,
       handleValidationChoice,
+      // G1 AI Credits handlers
+      handleOverageMenuChoice,
+      handleEmptyWalletChoice,
       openSessionBrowser,
       closeSessionBrowser,
       handleResumeSession,
@@ -2505,6 +2551,10 @@ Logging in with Google... Restarting Gemini CLI to continue.
         setNewAgents(null);
       },
       getPreferredEditor,
+      clearAccountSuspension: () => {
+        setAccountSuspensionInfo(null);
+        setAuthState(AuthState.Updating);
+      },
     }),
     [
       handleThemeSelect,
@@ -2534,6 +2584,8 @@ Logging in with Google... Restarting Gemini CLI to continue.
       handleClearScreen,
       handleProQuotaChoice,
       handleValidationChoice,
+      handleOverageMenuChoice,
+      handleEmptyWalletChoice,
       openSessionBrowser,
       closeSessionBrowser,
       handleResumeSession,
@@ -2553,6 +2605,7 @@ Logging in with Google... Restarting Gemini CLI to continue.
       setActiveBackgroundShellPid,
       setIsBackgroundShellListOpen,
       setAuthContext,
+      setAccountSuspensionInfo,
       newAgents,
       config,
       historyManager,
diff --git a/packages/cli/src/ui/auth/BannedAccountDialog.test.tsx b/packages/cli/src/ui/auth/BannedAccountDialog.test.tsx
new file mode 100644
index 0000000000..692b249415
--- /dev/null
+++ b/packages/cli/src/ui/auth/BannedAccountDialog.test.tsx
@@ -0,0 +1,241 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { describe, it, expect, vi, beforeEach, type Mock } from 'vitest';
+import { renderWithProviders } from '../../test-utils/render.js';
+import { waitFor } from '../../test-utils/async.js';
+import { BannedAccountDialog } from './BannedAccountDialog.js';
+import { RadioButtonSelect } from '../components/shared/RadioButtonSelect.js';
+import { useKeypress } from '../hooks/useKeypress.js';
+import {
+  openBrowserSecurely,
+  shouldLaunchBrowser,
+} from '@google/gemini-cli-core';
+import { Text } from 'ink';
+import { runExitCleanup } from '../../utils/cleanup.js';
+import type { AccountSuspensionInfo } from '../contexts/UIStateContext.js';
+
+vi.mock('@google/gemini-cli-core', async (importOriginal) => {
+  const actual =
+    await importOriginal<typeof import('@google/gemini-cli-core')>();
+  return {
+    ...actual,
+    openBrowserSecurely: vi.fn(),
+    shouldLaunchBrowser: vi.fn().mockReturnValue(true),
+  };
+});
+
+vi.mock('../../utils/cleanup.js', () => ({
+  runExitCleanup: vi.fn().mockResolvedValue(undefined),
+}));
+
+vi.mock('../hooks/useKeypress.js', () => ({
+  useKeypress: vi.fn(),
+}));
+
+vi.mock('../components/shared/RadioButtonSelect.js', () => ({
+  RadioButtonSelect: vi.fn(({ items }) => (
+    <>
+      {items.map((item: { value: string; label: string }) => (
+        <Text key={item.value}>{item.label}</Text>
+      ))}
+    </>
+  )),
+}));
+
+const mockedRadioButtonSelect = RadioButtonSelect as Mock;
+const mockedUseKeypress = useKeypress as Mock;
+const mockedOpenBrowser = openBrowserSecurely as Mock;
+const mockedShouldLaunchBrowser = shouldLaunchBrowser as Mock;
+const mockedRunExitCleanup = runExitCleanup as Mock;
+
+const DEFAULT_SUSPENSION_INFO: AccountSuspensionInfo = {
+  message:
+    'This service has been disabled in this account for violation of Terms of Service. Please submit an appeal to continue using this product.',
+  appealUrl: 'https://example.com/appeal',
+  appealLinkText: 'Appeal Here',
+};
+
+describe('BannedAccountDialog', () => {
+  let onExit: Mock;
+  let onChangeAuth: Mock;
+
+  beforeEach(() => {
+    vi.resetAllMocks();
+    mockedShouldLaunchBrowser.mockReturnValue(true);
+    mockedOpenBrowser.mockResolvedValue(undefined);
+    mockedRunExitCleanup.mockResolvedValue(undefined);
+    onExit = vi.fn();
+    onChangeAuth = vi.fn();
+  });
+
+  it('renders the suspension message from accountSuspensionInfo', async () => {
+    const { lastFrame, waitUntilReady, unmount } = renderWithProviders(
+      <BannedAccountDialog
+        accountSuspensionInfo={DEFAULT_SUSPENSION_INFO}
+        onExit={onExit}
+        onChangeAuth={onChangeAuth}
+      />,
+    );
+    await waitUntilReady();
+    const frame = lastFrame();
+    expect(frame).toContain('Account Suspended');
+    expect(frame).toContain('violation of Terms of Service');
+    expect(frame).toContain('Escape to exit');
+    unmount();
+  });
+
+  it('renders menu options with appeal link text from response', async () => {
+    const { waitUntilReady, unmount } = renderWithProviders(
+      <BannedAccountDialog
+        accountSuspensionInfo={DEFAULT_SUSPENSION_INFO}
+        onExit={onExit}
+        onChangeAuth={onChangeAuth}
+      />,
+    );
+    await waitUntilReady();
+    const items = mockedRadioButtonSelect.mock.calls[0][0].items;
+    expect(items).toHaveLength(3);
+    expect(items[0].label).toBe('Appeal Here');
+    expect(items[1].label).toBe('Change authentication');
+    expect(items[2].label).toBe('Exit');
+    unmount();
+  });
+
+  it('hides form option when no appealUrl is provided', async () => {
+    const infoWithoutUrl: AccountSuspensionInfo = {
+      message: 'Account suspended.',
+    };
+    const { waitUntilReady, unmount } = renderWithProviders(
+      <BannedAccountDialog
+        accountSuspensionInfo={infoWithoutUrl}
+        onExit={onExit}
+        onChangeAuth={onChangeAuth}
+      />,
+    );
+    await waitUntilReady();
+    const items = mockedRadioButtonSelect.mock.calls[0][0].items;
+    expect(items).toHaveLength(2);
+    expect(items[0].label).toBe('Change authentication');
+    expect(items[1].label).toBe('Exit');
+    unmount();
+  });
+
+  it('uses default label when appealLinkText is not provided', async () => {
+    const infoWithoutLinkText: AccountSuspensionInfo = {
+      message: 'Account suspended.',
+      appealUrl: 'https://example.com/appeal',
+    };
+    const { waitUntilReady, unmount } = renderWithProviders(
+      <BannedAccountDialog
+        accountSuspensionInfo={infoWithoutLinkText}
+        onExit={onExit}
+        onChangeAuth={onChangeAuth}
+      />,
+    );
+    await waitUntilReady();
+    const items = mockedRadioButtonSelect.mock.calls[0][0].items;
+    expect(items[0].label).toBe('Open the Google Form');
+    unmount();
+  });
+
+  it('opens browser when appeal option is selected', async () => {
+    const { waitUntilReady, unmount } = renderWithProviders(
+      <BannedAccountDialog
+        accountSuspensionInfo={DEFAULT_SUSPENSION_INFO}
+        onExit={onExit}
+        onChangeAuth={onChangeAuth}
+      />,
+    );
+    await waitUntilReady();
+    const { onSelect } = mockedRadioButtonSelect.mock.calls[0][0];
+    await onSelect('open_form');
+    expect(mockedOpenBrowser).toHaveBeenCalledWith(
+      'https://example.com/appeal',
+    );
+    expect(onExit).not.toHaveBeenCalled();
+    unmount();
+  });
+
+  it('shows URL when browser cannot be launched', async () => {
+    mockedShouldLaunchBrowser.mockReturnValue(false);
+    const { lastFrame, waitUntilReady, unmount } = renderWithProviders(
+      <BannedAccountDialog
+        accountSuspensionInfo={DEFAULT_SUSPENSION_INFO}
+        onExit={onExit}
+        onChangeAuth={onChangeAuth}
+      />,
+    );
+    await waitUntilReady();
+    const { onSelect } = mockedRadioButtonSelect.mock.calls[0][0];
+    onSelect('open_form');
+    await waitFor(() => {
+      expect(lastFrame()).toContain('Please open this URL in a browser');
+    });
+    expect(mockedOpenBrowser).not.toHaveBeenCalled();
+    unmount();
+  });
+
+  it('calls onExit when "Exit" is selected', async () => {
+    const { waitUntilReady, unmount } = renderWithProviders(
+      <BannedAccountDialog
+        accountSuspensionInfo={DEFAULT_SUSPENSION_INFO}
+        onExit={onExit}
+        onChangeAuth={onChangeAuth}
+      />,
+    );
+    await waitUntilReady();
+    const { onSelect } = mockedRadioButtonSelect.mock.calls[0][0];
+    await onSelect('exit');
+    expect(mockedRunExitCleanup).toHaveBeenCalled();
+    expect(onExit).toHaveBeenCalled();
+    unmount();
+  });
+
+  it('calls onChangeAuth when "Change authentication" is selected', async () => {
+    const { waitUntilReady, unmount } = renderWithProviders(
+      <BannedAccountDialog
+        accountSuspensionInfo={DEFAULT_SUSPENSION_INFO}
+        onExit={onExit}
+        onChangeAuth={onChangeAuth}
+      />,
+    );
+    await waitUntilReady();
+    const { onSelect } = mockedRadioButtonSelect.mock.calls[0][0];
+    onSelect('change_auth');
+    expect(onChangeAuth).toHaveBeenCalled();
+    expect(onExit).not.toHaveBeenCalled();
+    unmount();
+  });
+
+  it('exits on escape key', async () => {
+    const { waitUntilReady, unmount } = renderWithProviders(
+      <BannedAccountDialog
+        accountSuspensionInfo={DEFAULT_SUSPENSION_INFO}
+        onExit={onExit}
+        onChangeAuth={onChangeAuth}
+      />,
+    );
+    await waitUntilReady();
+    const keypressHandler = mockedUseKeypress.mock.calls[0][0];
+    const result = keypressHandler({ name: 'escape' });
+    expect(result).toBe(true);
+    unmount();
+  });
+
+  it('renders snapshot correctly', async () => {
+    const { lastFrame, waitUntilReady, unmount } = renderWithProviders(
+      <BannedAccountDialog
+        accountSuspensionInfo={DEFAULT_SUSPENSION_INFO}
+        onExit={onExit}
+        onChangeAuth={onChangeAuth}
+      />,
+    );
+    await waitUntilReady();
+    expect(lastFrame()).toMatchSnapshot();
+    unmount();
+  });
+});
diff --git a/packages/cli/src/ui/auth/BannedAccountDialog.tsx b/packages/cli/src/ui/auth/BannedAccountDialog.tsx
new file mode 100644
index 0000000000..e051ba082b
--- /dev/null
+++ b/packages/cli/src/ui/auth/BannedAccountDialog.tsx
@@ -0,0 +1,138 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import type React from 'react';
+import { useCallback, useMemo, useState } from 'react';
+import { Box, Text } from 'ink';
+import { theme } from '../semantic-colors.js';
+import { RadioButtonSelect } from '../components/shared/RadioButtonSelect.js';
+import { useKeypress } from '../hooks/useKeypress.js';
+import {
+  openBrowserSecurely,
+  shouldLaunchBrowser,
+} from '@google/gemini-cli-core';
+import { runExitCleanup } from '../../utils/cleanup.js';
+import type { AccountSuspensionInfo } from '../contexts/UIStateContext.js';
+
+interface BannedAccountDialogProps {
+  accountSuspensionInfo: AccountSuspensionInfo;
+  onExit: () => void;
+  onChangeAuth: () => void;
+}
+
+export function BannedAccountDialog({
+  accountSuspensionInfo,
+  onExit,
+  onChangeAuth,
+}: BannedAccountDialogProps): React.JSX.Element {
+  const [errorMessage, setErrorMessage] = useState<string | null>(null);
+
+  const appealUrl = accountSuspensionInfo.appealUrl;
+  const appealLinkText =
+    accountSuspensionInfo.appealLinkText ?? 'Open the Google Form';
+
+  const items = useMemo(() => {
+    const menuItems = [];
+    if (appealUrl) {
+      menuItems.push({
+        label: appealLinkText,
+        value: 'open_form' as const,
+        key: 'open_form',
+      });
+    }
+    menuItems.push(
+      {
+        label: 'Change authentication',
+        value: 'change_auth' as const,
+        key: 'change_auth',
+      },
+      {
+        label: 'Exit',
+        value: 'exit' as const,
+        key: 'exit',
+      },
+    );
+    return menuItems;
+  }, [appealUrl, appealLinkText]);
+
+  useKeypress(
+    (key) => {
+      if (key.name === 'escape') {
+        void handleExit();
+        return true;
+      }
+      return false;
+    },
+    { isActive: true },
+  );
+
+  const handleExit = useCallback(async () => {
+    await runExitCleanup();
+    onExit();
+  }, [onExit]);
+
+  const handleSelect = useCallback(
+    async (choice: string) => {
+      if (choice === 'open_form' && appealUrl) {
+        if (!shouldLaunchBrowser()) {
+          setErrorMessage(`Please open this URL in a browser: ${appealUrl}`);
+          return;
+        }
+
+        try {
+          await openBrowserSecurely(appealUrl);
+        } catch {
+          setErrorMessage(`Failed to open browser. Please visit: ${appealUrl}`);
+        }
+      } else if (choice === 'change_auth') {
+        onChangeAuth();
+      } else {
+        await handleExit();
+      }
+    },
+    [handleExit, onChangeAuth, appealUrl],
+  );
+
+  return (
+    <Box flexDirection="column" padding={1}>
+      <Text bold color={theme.status.error}>
+        Error: Account Suspended
+      </Text>
+
+      <Box marginTop={1}>
+        <Text>{accountSuspensionInfo.message}</Text>
+      </Box>
+
+      {appealUrl && (
+        <>
+          <Box marginTop={1}>
+            <Text>Appeal URL:</Text>
+          </Box>
+          <Box>
+            <Text color={theme.text.link}>[{appealUrl}]</Text>
+          </Box>
+        </>
+      )}
+
+      {errorMessage && (
+        <Box marginTop={1}>
+          <Text color={theme.status.error}>{errorMessage}</Text>
+        </Box>
+      )}
+
+      <Box marginTop={1}>
+        <RadioButtonSelect
+          items={items}
+          onSelect={(choice) => void handleSelect(choice)}
+        />
+      </Box>
+
+      <Box marginTop={1}>
+        <Text dimColor>Escape to exit</Text>
+      </Box>
+    </Box>
+  );
+}
diff --git a/packages/cli/src/ui/auth/__snapshots__/BannedAccountDialog.test.tsx.snap b/packages/cli/src/ui/auth/__snapshots__/BannedAccountDialog.test.tsx.snap
new file mode 100644
index 0000000000..b95994692d
--- /dev/null
+++ b/packages/cli/src/ui/auth/__snapshots__/BannedAccountDialog.test.tsx.snap
@@ -0,0 +1,17 @@
+// Vitest Snapshot v1, https://vitest.dev/guide/snapshot.html
+
+exports[`BannedAccountDialog > renders snapshot correctly 1`] = `
+"
+ Error: Account Suspended
+
+ This service has been disabled in this account for violation of Terms of Service. Please submit an
+ appeal to continue using this product.
+
+ Appeal URL:
+ [https://example.com/appeal]
+
+ Appeal HereChange authenticationExit
+
+ Escape to exit
+"
+`;
diff --git a/packages/cli/src/ui/auth/useAuth.ts b/packages/cli/src/ui/auth/useAuth.ts
index effb17cdff..3faec2d5a8 100644
--- a/packages/cli/src/ui/auth/useAuth.ts
+++ b/packages/cli/src/ui/auth/useAuth.ts
@@ -11,6 +11,7 @@ import {
   type Config,
   loadApiKey,
   debugLogger,
+  isAccountSuspendedError,
 } from '@google/gemini-cli-core';
 import { getErrorMessage } from '@google/gemini-cli-core';
 import { AuthState } from '../types.js';
@@ -34,16 +35,21 @@ export function validateAuthMethodWithSettings(
   return validateAuthMethod(authType);
 }
 
+import type { AccountSuspensionInfo } from '../contexts/UIStateContext.js';
+
 export const useAuthCommand = (
   settings: LoadedSettings,
   config: Config,
   initialAuthError: string | null = null,
+  initialAccountSuspensionInfo: AccountSuspensionInfo | null = null,
 ) => {
   const [authState, setAuthState] = useState<AuthState>(
     initialAuthError ? AuthState.Updating : AuthState.Unauthenticated,
   );
 
   const [authError, setAuthError] = useState<string | null>(initialAuthError);
+  const [accountSuspensionInfo, setAccountSuspensionInfo] =
+    useState<AccountSuspensionInfo | null>(initialAccountSuspensionInfo);
   const [apiKeyDefaultValue, setApiKeyDefaultValue] = useState<
     string | undefined
   >(undefined);
@@ -130,7 +136,16 @@ export const useAuthCommand = (
         setAuthError(null);
         setAuthState(AuthState.Authenticated);
       } catch (e) {
-        onAuthError(`Failed to login. Message: ${getErrorMessage(e)}`);
+        const suspendedError = isAccountSuspendedError(e);
+        if (suspendedError) {
+          setAccountSuspensionInfo({
+            message: suspendedError.message,
+            appealUrl: suspendedError.appealUrl,
+            appealLinkText: suspendedError.appealLinkText,
+          });
+        } else {
+          onAuthError(`Failed to login. Message: ${getErrorMessage(e)}`);
+        }
       }
     })();
   }, [
@@ -150,5 +165,7 @@ export const useAuthCommand = (
     onAuthError,
     apiKeyDefaultValue,
     reloadApiKey,
+    accountSuspensionInfo,
+    setAccountSuspensionInfo,
   };
 };
diff --git a/packages/cli/src/ui/commands/mcpCommand.test.ts b/packages/cli/src/ui/commands/mcpCommand.test.ts
index ecce5c9cd5..3acace0774 100644
--- a/packages/cli/src/ui/commands/mcpCommand.test.ts
+++ b/packages/cli/src/ui/commands/mcpCommand.test.ts
@@ -4,7 +4,7 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
-import { vi, describe, it, expect, beforeEach } from 'vitest';
+import { vi, describe, it, expect, beforeEach, afterEach } from 'vitest';
 import { mcpCommand } from './mcpCommand.js';
 import { createMockCommandContext } from '../../test-utils/mockCommandContext.js';
 import {
@@ -77,6 +77,8 @@ describe('mcpCommand', () => {
     getGeminiClient: ReturnType<typeof vi.fn>;
     getMcpClientManager: ReturnType<typeof vi.fn>;
     getResourceRegistry: ReturnType<typeof vi.fn>;
+    setUserInteractedWithMcp: ReturnType<typeof vi.fn>;
+    getLastMcpError: ReturnType<typeof vi.fn>;
   };
 
   beforeEach(() => {
@@ -104,12 +106,15 @@ describe('mcpCommand', () => {
       }),
       getGeminiClient: vi.fn(),
       getMcpClientManager: vi.fn().mockImplementation(() => ({
-        getBlockedMcpServers: vi.fn(),
-        getMcpServers: vi.fn(),
+        getBlockedMcpServers: vi.fn().mockReturnValue([]),
+        getMcpServers: vi.fn().mockReturnValue({}),
+        getLastError: vi.fn().mockReturnValue(undefined),
       })),
       getResourceRegistry: vi.fn().mockReturnValue({
         getAllResources: vi.fn().mockReturnValue([]),
       }),
+      setUserInteractedWithMcp: vi.fn(),
+      getLastMcpError: vi.fn().mockReturnValue(undefined),
     };
 
     mockContext = createMockCommandContext({
@@ -119,6 +124,10 @@ describe('mcpCommand', () => {
     });
   });
 
+  afterEach(() => {
+    vi.restoreAllMocks();
+  });
+
   describe('basic functionality', () => {
     it('should show an error if config is not available', async () => {
       const contextWithoutConfig = createMockCommandContext({
@@ -161,6 +170,7 @@ describe('mcpCommand', () => {
       mockConfig.getMcpClientManager = vi.fn().mockReturnValue({
         getMcpServers: vi.fn().mockReturnValue(mockMcpServers),
         getBlockedMcpServers: vi.fn().mockReturnValue([]),
+        getLastError: vi.fn().mockReturnValue(undefined),
       });
     });
 
diff --git a/packages/cli/src/ui/commands/mcpCommand.ts b/packages/cli/src/ui/commands/mcpCommand.ts
index 6b5e7d120c..e488db780f 100644
--- a/packages/cli/src/ui/commands/mcpCommand.ts
+++ b/packages/cli/src/ui/commands/mcpCommand.ts
@@ -52,6 +52,8 @@ const authCommand: SlashCommand = {
       };
     }
 
+    config.setUserInteractedWithMcp();
+
     const mcpServers = config.getMcpClientManager()?.getMcpServers() ?? {};
 
     if (!serverName) {
@@ -184,6 +186,8 @@ const listAction = async (
     };
   }
 
+  config.setUserInteractedWithMcp();
+
   const toolRegistry = config.getToolRegistry();
   if (!toolRegistry) {
     return {
@@ -250,6 +254,13 @@ const listAction = async (
     enablementState[serverName] =
       await enablementManager.getDisplayState(serverName);
   }
+  const errors: Record<string, string> = {};
+  for (const serverName of serverNames) {
+    const error = config.getMcpClientManager()?.getLastError(serverName);
+    if (error) {
+      errors[serverName] = error;
+    }
+  }
 
   const mcpStatusItem: HistoryItemMcpStatus = {
     type: MessageType.MCP_STATUS,
@@ -274,16 +285,19 @@ const listAction = async (
     })),
     authStatus,
     enablementState,
-    blockedServers: blockedMcpServers,
+    errors,
+    blockedServers: blockedMcpServers.map((s) => ({
+      name: s.name,
+      extensionName: s.extensionName,
+    })),
     discoveryInProgress,
     connectingServers,
-    showDescriptions,
-    showSchema,
+    showDescriptions: Boolean(showDescriptions),
+    showSchema: Boolean(showSchema),
   };
 
   context.ui.addItem(mcpStatusItem);
 };
-
 const listCommand: SlashCommand = {
   name: 'list',
   altNames: ['ls', 'nodesc', 'nodescription'],
@@ -372,6 +386,8 @@ async function handleEnableDisable(
     };
   }
 
+  config.setUserInteractedWithMcp();
+
   const parts = args.trim().split(/\s+/);
   const isSession = parts.includes('--session');
   const serverName = parts.filter((p) => p !== '--session')[0];
diff --git a/packages/cli/src/ui/commands/statsCommand.test.ts b/packages/cli/src/ui/commands/statsCommand.test.ts
index 63fe3eb9e5..2f36c333b9 100644
--- a/packages/cli/src/ui/commands/statsCommand.test.ts
+++ b/packages/cli/src/ui/commands/statsCommand.test.ts
@@ -39,11 +39,18 @@ describe('statsCommand', () => {
     mockContext.session.stats.sessionStartTime = startTime;
   });
 
-  it('should display general session stats when run with no subcommand', () => {
+  it('should display general session stats when run with no subcommand', async () => {
     if (!statsCommand.action) throw new Error('Command has no action');
 
-    // eslint-disable-next-line @typescript-eslint/no-floating-promises
-    statsCommand.action(mockContext, '');
+    mockContext.services.config = {
+      refreshUserQuota: vi.fn(),
+      refreshAvailableCredits: vi.fn(),
+      getUserTierName: vi.fn(),
+      getUserPaidTier: vi.fn(),
+      getModel: vi.fn(),
+    } as unknown as Config;
+
+    await statsCommand.action(mockContext, '');
 
     const expectedDuration = formatDuration(
       endTime.getTime() - startTime.getTime(),
@@ -55,6 +62,7 @@ describe('statsCommand', () => {
       tier: undefined,
       userEmail: 'mock@example.com',
       currentModel: undefined,
+      creditBalance: undefined,
     });
   });
 
@@ -78,6 +86,8 @@ describe('statsCommand', () => {
       getQuotaRemaining: mockGetQuotaRemaining,
       getQuotaLimit: mockGetQuotaLimit,
       getQuotaResetTime: mockGetQuotaResetTime,
+      getUserPaidTier: vi.fn(),
+      refreshAvailableCredits: vi.fn(),
     } as unknown as Config;
 
     await statsCommand.action(mockContext, '');
diff --git a/packages/cli/src/ui/commands/statsCommand.ts b/packages/cli/src/ui/commands/statsCommand.ts
index b90e7309e1..1ded006618 100644
--- a/packages/cli/src/ui/commands/statsCommand.ts
+++ b/packages/cli/src/ui/commands/statsCommand.ts
@@ -11,7 +11,10 @@ import type {
 } from '../types.js';
 import { MessageType } from '../types.js';
 import { formatDuration } from '../utils/formatters.js';
-import { UserAccountManager } from '@google/gemini-cli-core';
+import {
+  UserAccountManager,
+  getG1CreditBalance,
+} from '@google/gemini-cli-core';
 import {
   type CommandContext,
   type SlashCommand,
@@ -27,8 +30,10 @@ function getUserIdentity(context: CommandContext) {
   const userEmail = cachedAccount ?? undefined;
 
   const tier = context.services.config?.getUserTierName();
+  const paidTier = context.services.config?.getUserPaidTier();
+  const creditBalance = getG1CreditBalance(paidTier) ?? undefined;
 
-  return { selectedAuthType, userEmail, tier };
+  return { selectedAuthType, userEmail, tier, creditBalance };
 }
 
 async function defaultSessionView(context: CommandContext) {
@@ -43,7 +48,8 @@ async function defaultSessionView(context: CommandContext) {
   }
   const wallDuration = now.getTime() - sessionStartTime.getTime();
 
-  const { selectedAuthType, userEmail, tier } = getUserIdentity(context);
+  const { selectedAuthType, userEmail, tier, creditBalance } =
+    getUserIdentity(context);
   const currentModel = context.services.config?.getModel();
 
   const statsItem: HistoryItemStats = {
@@ -53,10 +59,14 @@ async function defaultSessionView(context: CommandContext) {
     userEmail,
     tier,
     currentModel,
+    creditBalance,
   };
 
   if (context.services.config) {
-    const quota = await context.services.config.refreshUserQuota();
+    const [quota] = await Promise.all([
+      context.services.config.refreshUserQuota(),
+      context.services.config.refreshAvailableCredits(),
+    ]);
     if (quota) {
       statsItem.quotas = quota;
       statsItem.pooledRemaining = context.services.config.getQuotaRemaining();
diff --git a/packages/cli/src/ui/components/Composer.test.tsx b/packages/cli/src/ui/components/Composer.test.tsx
index 330e615cfa..999b1531f9 100644
--- a/packages/cli/src/ui/components/Composer.test.tsx
+++ b/packages/cli/src/ui/components/Composer.test.tsx
@@ -402,7 +402,7 @@ describe('Composer', () => {
       expect(output).not.toContain('ShortcutsHint');
     });
 
-    it('renders LoadingIndicator without thought when loadingPhrases is off', async () => {
+    it('renders LoadingIndicator with thought when loadingPhrases is off', async () => {
       const uiState = createMockUIState({
         streamingState: StreamingState.Responding,
         thought: { subject: 'Hidden', description: 'Should not show' },
@@ -415,7 +415,7 @@ describe('Composer', () => {
 
       const output = lastFrame();
       expect(output).toContain('LoadingIndicator');
-      expect(output).not.toContain('Should not show');
+      expect(output).toContain('LoadingIndicator: Hidden');
     });
 
     it('does not render LoadingIndicator when waiting for confirmation', async () => {
diff --git a/packages/cli/src/ui/components/Composer.tsx b/packages/cli/src/ui/components/Composer.tsx
index 98a465fa39..51c879e772 100644
--- a/packages/cli/src/ui/components/Composer.tsx
+++ b/packages/cli/src/ui/components/Composer.tsx
@@ -229,8 +229,7 @@ export const Composer = ({ isFocused = true }: { isFocused?: boolean }) => {
                 inline
                 thought={
                   uiState.streamingState ===
-                    StreamingState.WaitingForConfirmation ||
-                  settings.merged.ui.loadingPhrases === 'off'
+                  StreamingState.WaitingForConfirmation
                     ? undefined
                     : uiState.thought
                 }
@@ -273,8 +272,7 @@ export const Composer = ({ isFocused = true }: { isFocused?: boolean }) => {
                   inline
                   thought={
                     uiState.streamingState ===
-                      StreamingState.WaitingForConfirmation ||
-                    settings.merged.ui.loadingPhrases === 'off'
+                    StreamingState.WaitingForConfirmation
                       ? undefined
                       : uiState.thought
                   }
diff --git a/packages/cli/src/ui/components/DetailedMessagesDisplay.test.tsx b/packages/cli/src/ui/components/DetailedMessagesDisplay.test.tsx
index 108db073d5..6e6a4ce48c 100644
--- a/packages/cli/src/ui/components/DetailedMessagesDisplay.test.tsx
+++ b/packages/cli/src/ui/components/DetailedMessagesDisplay.test.tsx
@@ -4,12 +4,13 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
-import { render } from '../../test-utils/render.js';
+import { renderWithProviders } from '../../test-utils/render.js';
 import { DetailedMessagesDisplay } from './DetailedMessagesDisplay.js';
 import { describe, it, expect, vi } from 'vitest';
 import type { ConsoleMessageItem } from '../types.js';
 import { Box } from 'ink';
 import type React from 'react';
+import { createMockSettings } from '../../test-utils/settings.js';
 
 vi.mock('./shared/ScrollableList.js', () => ({
   ScrollableList: ({
@@ -29,13 +30,18 @@ vi.mock('./shared/ScrollableList.js', () => ({
 
 describe('DetailedMessagesDisplay', () => {
   it('renders nothing when messages are empty', async () => {
-    const { lastFrame, waitUntilReady, unmount } = render(
+    const { lastFrame, waitUntilReady, unmount } = renderWithProviders(
       <DetailedMessagesDisplay
         messages={[]}
         maxHeight={10}
         width={80}
         hasFocus={false}
       />,
+      {
+        settings: createMockSettings({
+          merged: { ui: { errorVerbosity: 'full' } },
+        }),
+      },
     );
     await waitUntilReady();
     expect(lastFrame({ allowEmpty: true })).toBe('');
@@ -50,13 +56,18 @@ describe('DetailedMessagesDisplay', () => {
       { type: 'debug', content: 'Debug message', count: 1 },
     ];
 
-    const { lastFrame, waitUntilReady, unmount } = render(
+    const { lastFrame, waitUntilReady, unmount } = renderWithProviders(
       <DetailedMessagesDisplay
         messages={messages}
         maxHeight={20}
         width={80}
         hasFocus={true}
       />,
+      {
+        settings: createMockSettings({
+          merged: { ui: { errorVerbosity: 'full' } },
+        }),
+      },
     );
     await waitUntilReady();
     const output = lastFrame();
@@ -65,18 +76,69 @@ describe('DetailedMessagesDisplay', () => {
     unmount();
   });
 
+  it('hides the F12 hint in low error verbosity mode', async () => {
+    const messages: ConsoleMessageItem[] = [
+      { type: 'error', content: 'Error message', count: 1 },
+    ];
+
+    const { lastFrame, waitUntilReady, unmount } = renderWithProviders(
+      <DetailedMessagesDisplay
+        messages={messages}
+        maxHeight={20}
+        width={80}
+        hasFocus={true}
+      />,
+      {
+        settings: createMockSettings({
+          merged: { ui: { errorVerbosity: 'low' } },
+        }),
+      },
+    );
+    await waitUntilReady();
+    expect(lastFrame()).not.toContain('(F12 to close)');
+    unmount();
+  });
+
+  it('shows the F12 hint in full error verbosity mode', async () => {
+    const messages: ConsoleMessageItem[] = [
+      { type: 'error', content: 'Error message', count: 1 },
+    ];
+
+    const { lastFrame, waitUntilReady, unmount } = renderWithProviders(
+      <DetailedMessagesDisplay
+        messages={messages}
+        maxHeight={20}
+        width={80}
+        hasFocus={true}
+      />,
+      {
+        settings: createMockSettings({
+          merged: { ui: { errorVerbosity: 'full' } },
+        }),
+      },
+    );
+    await waitUntilReady();
+    expect(lastFrame()).toContain('(F12 to close)');
+    unmount();
+  });
+
   it('renders message counts', async () => {
     const messages: ConsoleMessageItem[] = [
       { type: 'log', content: 'Repeated message', count: 5 },
     ];
 
-    const { lastFrame, waitUntilReady, unmount } = render(
+    const { lastFrame, waitUntilReady, unmount } = renderWithProviders(
       <DetailedMessagesDisplay
         messages={messages}
         maxHeight={10}
         width={80}
         hasFocus={false}
       />,
+      {
+        settings: createMockSettings({
+          merged: { ui: { errorVerbosity: 'full' } },
+        }),
+      },
     );
     await waitUntilReady();
     const output = lastFrame();
diff --git a/packages/cli/src/ui/components/DetailedMessagesDisplay.tsx b/packages/cli/src/ui/components/DetailedMessagesDisplay.tsx
index ff88afa888..097ebe1378 100644
--- a/packages/cli/src/ui/components/DetailedMessagesDisplay.tsx
+++ b/packages/cli/src/ui/components/DetailedMessagesDisplay.tsx
@@ -13,6 +13,8 @@ import {
   ScrollableList,
   type ScrollableListRef,
 } from './shared/ScrollableList.js';
+import { useConfig } from '../contexts/ConfigContext.js';
+import { useSettings } from '../contexts/SettingsContext.js';
 
 interface DetailedMessagesDisplayProps {
   messages: ConsoleMessageItem[];
@@ -27,6 +29,10 @@ export const DetailedMessagesDisplay: React.FC<
   DetailedMessagesDisplayProps
 > = ({ messages, maxHeight, width, hasFocus }) => {
   const scrollableListRef = useRef<ScrollableListRef<ConsoleMessageItem>>(null);
+  const config = useConfig();
+  const settings = useSettings();
+  const showHotkeyHint =
+    settings.merged.ui.errorVerbosity === 'full' || config.getDebugMode();
 
   const borderAndPadding = 3;
 
@@ -65,7 +71,10 @@ export const DetailedMessagesDisplay: React.FC<
     >
       <Box marginBottom={1}>
         <Text bold color={theme.text.primary}>
-          Debug Console <Text color={theme.text.secondary}>(F12 to close)</Text>
+          Debug Console{' '}
+          {showHotkeyHint && (
+            <Text color={theme.text.secondary}>(F12 to close)</Text>
+          )}
         </Text>
       </Box>
       <Box height={maxHeight} width={width - borderAndPadding}>
diff --git a/packages/cli/src/ui/components/DialogManager.test.tsx b/packages/cli/src/ui/components/DialogManager.test.tsx
index 2dbdd5019b..6329ca89a1 100644
--- a/packages/cli/src/ui/components/DialogManager.test.tsx
+++ b/packages/cli/src/ui/components/DialogManager.test.tsx
@@ -80,6 +80,8 @@ describe('DialogManager', () => {
       stats: undefined,
       proQuotaRequest: null,
       validationRequest: null,
+      overageMenuRequest: null,
+      emptyWalletRequest: null,
     },
     shouldShowIdePrompt: false,
     isFolderTrustDialogOpen: false,
@@ -132,6 +134,8 @@ describe('DialogManager', () => {
             resolve: vi.fn(),
           },
           validationRequest: null,
+          overageMenuRequest: null,
+          emptyWalletRequest: null,
         },
       },
       'ProQuotaDialog',
diff --git a/packages/cli/src/ui/components/DialogManager.tsx b/packages/cli/src/ui/components/DialogManager.tsx
index c90194052a..f7f050a53f 100644
--- a/packages/cli/src/ui/components/DialogManager.tsx
+++ b/packages/cli/src/ui/components/DialogManager.tsx
@@ -13,11 +13,14 @@ import { ThemeDialog } from './ThemeDialog.js';
 import { SettingsDialog } from './SettingsDialog.js';
 import { AuthInProgress } from '../auth/AuthInProgress.js';
 import { AuthDialog } from '../auth/AuthDialog.js';
+import { BannedAccountDialog } from '../auth/BannedAccountDialog.js';
 import { ApiAuthDialog } from '../auth/ApiAuthDialog.js';
 import { EditorSettingsDialog } from './EditorSettingsDialog.js';
 import { PrivacyNotice } from '../privacy/PrivacyNotice.js';
 import { ProQuotaDialog } from './ProQuotaDialog.js';
 import { ValidationDialog } from './ValidationDialog.js';
+import { OverageMenuDialog } from './OverageMenuDialog.js';
+import { EmptyWalletDialog } from './EmptyWalletDialog.js';
 import { runExitCleanup } from '../../utils/cleanup.js';
 import { RELAUNCH_EXIT_CODE } from '../../utils/processUtils.js';
 import { SessionBrowser } from './SessionBrowser.js';
@@ -152,6 +155,28 @@ export const DialogManager = ({
       />
     );
   }
+  if (uiState.quota.overageMenuRequest) {
+    return (
+      <OverageMenuDialog
+        failedModel={uiState.quota.overageMenuRequest.failedModel}
+        fallbackModel={uiState.quota.overageMenuRequest.fallbackModel}
+        resetTime={uiState.quota.overageMenuRequest.resetTime}
+        creditBalance={uiState.quota.overageMenuRequest.creditBalance}
+        onChoice={uiActions.handleOverageMenuChoice}
+      />
+    );
+  }
+  if (uiState.quota.emptyWalletRequest) {
+    return (
+      <EmptyWalletDialog
+        failedModel={uiState.quota.emptyWalletRequest.failedModel}
+        fallbackModel={uiState.quota.emptyWalletRequest.fallbackModel}
+        resetTime={uiState.quota.emptyWalletRequest.resetTime}
+        onGetCredits={uiState.quota.emptyWalletRequest.onGetCredits}
+        onChoice={uiActions.handleEmptyWalletChoice}
+      />
+    );
+  }
   if (uiState.shouldShowIdePrompt) {
     return (
       <IdeIntegrationNudge
@@ -296,6 +321,21 @@ export const DialogManager = ({
       </Box>
     );
   }
+  if (uiState.accountSuspensionInfo) {
+    return (
+      <Box flexDirection="column">
+        <BannedAccountDialog
+          accountSuspensionInfo={uiState.accountSuspensionInfo}
+          onExit={() => {
+            process.exit(1);
+          }}
+          onChangeAuth={() => {
+            uiActions.clearAccountSuspension();
+          }}
+        />
+      </Box>
+    );
+  }
   if (uiState.isAuthenticating) {
     return (
       <AuthInProgress
@@ -318,6 +358,7 @@ export const DialogManager = ({
       </Box>
     );
   }
+
   if (uiState.isAuthDialogOpen) {
     return (
       <Box flexDirection="column">
diff --git a/packages/cli/src/ui/components/EmptyWalletDialog.test.tsx b/packages/cli/src/ui/components/EmptyWalletDialog.test.tsx
new file mode 100644
index 0000000000..6f8f063c43
--- /dev/null
+++ b/packages/cli/src/ui/components/EmptyWalletDialog.test.tsx
@@ -0,0 +1,218 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { renderWithProviders } from '../../test-utils/render.js';
+import { waitFor } from '../../test-utils/async.js';
+import { act } from 'react';
+import { describe, it, expect, vi, beforeEach, afterEach } from 'vitest';
+import { EmptyWalletDialog } from './EmptyWalletDialog.js';
+
+const writeKey = (stdin: { write: (data: string) => void }, key: string) => {
+  act(() => {
+    stdin.write(key);
+  });
+};
+
+describe('EmptyWalletDialog', () => {
+  const mockOnChoice = vi.fn();
+  const mockOnGetCredits = vi.fn();
+
+  beforeEach(() => {
+    vi.clearAllMocks();
+  });
+
+  afterEach(() => {
+    vi.restoreAllMocks();
+  });
+
+  describe('rendering', () => {
+    it('should match snapshot with fallback available', async () => {
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <EmptyWalletDialog
+          failedModel="gemini-2.5-pro"
+          fallbackModel="gemini-3-flash-preview"
+          resetTime="2:00 PM"
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      expect(lastFrame()).toMatchSnapshot();
+      unmount();
+    });
+
+    it('should match snapshot without fallback', async () => {
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <EmptyWalletDialog
+          failedModel="gemini-2.5-pro"
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      expect(lastFrame()).toMatchSnapshot();
+      unmount();
+    });
+
+    it('should display the model name and usage limit message', async () => {
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <EmptyWalletDialog
+          failedModel="gemini-2.5-pro"
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      const output = lastFrame() ?? '';
+      expect(output).toContain('gemini-2.5-pro');
+      expect(output).toContain('Usage limit reached');
+      unmount();
+    });
+
+    it('should display purchase prompt and credits update notice', async () => {
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <EmptyWalletDialog
+          failedModel="gemini-2.5-pro"
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      const output = lastFrame() ?? '';
+      expect(output).toContain('purchase more AI Credits');
+      expect(output).toContain(
+        'Newly purchased AI credits may take a few minutes to update',
+      );
+      unmount();
+    });
+
+    it('should display reset time when provided', async () => {
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <EmptyWalletDialog
+          failedModel="gemini-2.5-pro"
+          resetTime="3:45 PM"
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      const output = lastFrame() ?? '';
+      expect(output).toContain('3:45 PM');
+      expect(output).toContain('Access resets at');
+      unmount();
+    });
+
+    it('should not display reset time when not provided', async () => {
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <EmptyWalletDialog
+          failedModel="gemini-2.5-pro"
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      const output = lastFrame() ?? '';
+      expect(output).not.toContain('Access resets at');
+      unmount();
+    });
+
+    it('should display slash command hints', async () => {
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <EmptyWalletDialog
+          failedModel="gemini-2.5-pro"
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      const output = lastFrame() ?? '';
+      expect(output).toContain('/stats');
+      expect(output).toContain('/model');
+      expect(output).toContain('/auth');
+      unmount();
+    });
+  });
+
+  describe('onChoice handling', () => {
+    it('should call onGetCredits and onChoice when get_credits is selected', async () => {
+      // get_credits is the first item, so just press Enter
+      const { unmount, stdin, waitUntilReady } = renderWithProviders(
+        <EmptyWalletDialog
+          failedModel="gemini-2.5-pro"
+          onChoice={mockOnChoice}
+          onGetCredits={mockOnGetCredits}
+        />,
+      );
+      await waitUntilReady();
+
+      writeKey(stdin, '\r');
+
+      await waitFor(() => {
+        expect(mockOnGetCredits).toHaveBeenCalled();
+        expect(mockOnChoice).toHaveBeenCalledWith('get_credits');
+      });
+      unmount();
+    });
+
+    it('should call onChoice without onGetCredits when onGetCredits is not provided', async () => {
+      const { unmount, stdin, waitUntilReady } = renderWithProviders(
+        <EmptyWalletDialog
+          failedModel="gemini-2.5-pro"
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      writeKey(stdin, '\r');
+
+      await waitFor(() => {
+        expect(mockOnChoice).toHaveBeenCalledWith('get_credits');
+      });
+      unmount();
+    });
+
+    it('should call onChoice with use_fallback when selected', async () => {
+      // With fallback: items are [get_credits, use_fallback, stop]
+      // use_fallback is the second item: Down + Enter
+      const { unmount, stdin, waitUntilReady } = renderWithProviders(
+        <EmptyWalletDialog
+          failedModel="gemini-2.5-pro"
+          fallbackModel="gemini-3-flash-preview"
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      writeKey(stdin, '\x1b[B'); // Down arrow
+      writeKey(stdin, '\r');
+
+      await waitFor(() => {
+        expect(mockOnChoice).toHaveBeenCalledWith('use_fallback');
+      });
+      unmount();
+    });
+
+    it('should call onChoice with stop when selected', async () => {
+      // Without fallback: items are [get_credits, stop]
+      // stop is the second item: Down + Enter
+      const { unmount, stdin, waitUntilReady } = renderWithProviders(
+        <EmptyWalletDialog
+          failedModel="gemini-2.5-pro"
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      writeKey(stdin, '\x1b[B'); // Down arrow
+      writeKey(stdin, '\r');
+
+      await waitFor(() => {
+        expect(mockOnChoice).toHaveBeenCalledWith('stop');
+      });
+      unmount();
+    });
+  });
+});
diff --git a/packages/cli/src/ui/components/EmptyWalletDialog.tsx b/packages/cli/src/ui/components/EmptyWalletDialog.tsx
new file mode 100644
index 0000000000..25d85829d3
--- /dev/null
+++ b/packages/cli/src/ui/components/EmptyWalletDialog.tsx
@@ -0,0 +1,110 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import type React from 'react';
+import { Box, Text } from 'ink';
+import { RadioButtonSelect } from './shared/RadioButtonSelect.js';
+import { theme } from '../semantic-colors.js';
+
+/** Available choices in the empty wallet dialog */
+export type EmptyWalletChoice = 'get_credits' | 'use_fallback' | 'stop';
+
+interface EmptyWalletDialogProps {
+  /** The model that hit the quota limit */
+  failedModel: string;
+  /** The fallback model to offer (omit if none available) */
+  fallbackModel?: string;
+  /** Time when access resets (human-readable) */
+  resetTime?: string;
+  /** Callback to log click and open the browser for purchasing credits */
+  onGetCredits?: () => void;
+  /** Callback when user makes a selection */
+  onChoice: (choice: EmptyWalletChoice) => void;
+}
+
+export function EmptyWalletDialog({
+  failedModel,
+  fallbackModel,
+  resetTime,
+  onGetCredits,
+  onChoice,
+}: EmptyWalletDialogProps): React.JSX.Element {
+  const items: Array<{
+    label: string;
+    value: EmptyWalletChoice;
+    key: string;
+  }> = [
+    {
+      label: 'Get AI Credits - Open browser to purchase credits',
+      value: 'get_credits',
+      key: 'get_credits',
+    },
+  ];
+
+  if (fallbackModel) {
+    items.push({
+      label: `Switch to ${fallbackModel}`,
+      value: 'use_fallback',
+      key: 'use_fallback',
+    });
+  }
+
+  items.push({
+    label: 'Stop - Abort request',
+    value: 'stop',
+    key: 'stop',
+  });
+
+  const handleSelect = (choice: EmptyWalletChoice) => {
+    if (choice === 'get_credits') {
+      onGetCredits?.();
+    }
+    onChoice(choice);
+  };
+
+  return (
+    <Box borderStyle="round" flexDirection="column" padding={1}>
+      <Box marginBottom={1} flexDirection="column">
+        <Text color={theme.status.warning}>
+          Usage limit reached for {failedModel}.
+        </Text>
+        {resetTime && <Text>Access resets at {resetTime}.</Text>}
+        <Text>
+          <Text bold color={theme.text.accent}>
+            /stats
+          </Text>{' '}
+          model for usage details
+        </Text>
+        <Text>
+          <Text bold color={theme.text.accent}>
+            /model
+          </Text>{' '}
+          to switch models.
+        </Text>
+        <Text>
+          <Text bold color={theme.text.accent}>
+            /auth
+          </Text>{' '}
+          to switch to API key.
+        </Text>
+      </Box>
+      <Box marginBottom={1}>
+        <Text>To continue using this model now, purchase more AI Credits.</Text>
+      </Box>
+      <Box marginBottom={1}>
+        <Text dimColor>
+          Newly purchased AI credits may take a few minutes to update.
+        </Text>
+      </Box>
+      <Box marginBottom={1}>
+        <Text>How would you like to proceed?</Text>
+      </Box>
+      <Box marginTop={1} marginBottom={1}>
+        <RadioButtonSelect items={items} onSelect={handleSelect} />
+      </Box>
+    </Box>
+  );
+}
diff --git a/packages/cli/src/ui/components/Footer.test.tsx b/packages/cli/src/ui/components/Footer.test.tsx
index 143e8319a3..9c253fec92 100644
--- a/packages/cli/src/ui/components/Footer.test.tsx
+++ b/packages/cli/src/ui/components/Footer.test.tsx
@@ -8,7 +8,11 @@ import { describe, it, expect, vi, beforeEach, afterEach } from 'vitest';
 import { renderWithProviders } from '../../test-utils/render.js';
 import { createMockSettings } from '../../test-utils/settings.js';
 import { Footer } from './Footer.js';
-import { tildeifyPath, ToolCallDecision } from '@google/gemini-cli-core';
+import {
+  makeFakeConfig,
+  tildeifyPath,
+  ToolCallDecision,
+} from '@google/gemini-cli-core';
 import type { SessionStatsState } from '../contexts/SessionContext.js';
 
 vi.mock('@google/gemini-cli-core', async (importOriginal) => {
@@ -177,6 +181,8 @@ describe('<Footer />', () => {
             },
             proQuotaRequest: null,
             validationRequest: null,
+            overageMenuRequest: null,
+            emptyWalletRequest: null,
           },
         },
       },
@@ -203,6 +209,8 @@ describe('<Footer />', () => {
             },
             proQuotaRequest: null,
             validationRequest: null,
+            overageMenuRequest: null,
+            emptyWalletRequest: null,
           },
         },
       },
@@ -229,6 +237,8 @@ describe('<Footer />', () => {
             },
             proQuotaRequest: null,
             validationRequest: null,
+            overageMenuRequest: null,
+            emptyWalletRequest: null,
           },
         },
       },
@@ -497,6 +507,75 @@ describe('<Footer />', () => {
       unmount();
     });
   });
+
+  describe('error summary visibility', () => {
+    it('hides error summary in low verbosity mode', async () => {
+      const { lastFrame, waitUntilReady, unmount } = renderWithProviders(
+        <Footer />,
+        {
+          width: 120,
+          uiState: {
+            sessionStats: mockSessionStats,
+            errorCount: 2,
+            showErrorDetails: false,
+          },
+          settings: createMockSettings({
+            merged: { ui: { errorVerbosity: 'low' } },
+          }),
+        },
+      );
+      await waitUntilReady();
+      expect(lastFrame()).not.toContain('F12 for details');
+      expect(lastFrame()).not.toContain('2 errors');
+      unmount();
+    });
+
+    it('shows error summary in full verbosity mode', async () => {
+      const { lastFrame, waitUntilReady, unmount } = renderWithProviders(
+        <Footer />,
+        {
+          width: 120,
+          uiState: {
+            sessionStats: mockSessionStats,
+            errorCount: 2,
+            showErrorDetails: false,
+          },
+          settings: createMockSettings({
+            merged: { ui: { errorVerbosity: 'full' } },
+          }),
+        },
+      );
+      await waitUntilReady();
+      expect(lastFrame()).toContain('F12 for details');
+      expect(lastFrame()).toContain('2 errors');
+      unmount();
+    });
+
+    it('shows error summary in debug mode even when verbosity is low', async () => {
+      const debugConfig = makeFakeConfig();
+      vi.spyOn(debugConfig, 'getDebugMode').mockReturnValue(true);
+
+      const { lastFrame, waitUntilReady, unmount } = renderWithProviders(
+        <Footer />,
+        {
+          width: 120,
+          config: debugConfig,
+          uiState: {
+            sessionStats: mockSessionStats,
+            errorCount: 1,
+            showErrorDetails: false,
+          },
+          settings: createMockSettings({
+            merged: { ui: { errorVerbosity: 'low' } },
+          }),
+        },
+      );
+      await waitUntilReady();
+      expect(lastFrame()).toContain('F12 for details');
+      expect(lastFrame()).toContain('1 error');
+      unmount();
+    });
+  });
 });
 
 describe('fallback mode display', () => {
diff --git a/packages/cli/src/ui/components/Footer.tsx b/packages/cli/src/ui/components/Footer.tsx
index 3fc830c1b7..9babae6ce3 100644
--- a/packages/cli/src/ui/components/Footer.tsx
+++ b/packages/cli/src/ui/components/Footer.tsx
@@ -60,6 +60,9 @@ export const Footer: React.FC = () => {
 
   const showMemoryUsage =
     config.getDebugMode() || settings.merged.ui.showMemoryUsage;
+  const isFullErrorVerbosity = settings.merged.ui.errorVerbosity === 'full';
+  const showErrorSummary =
+    !showErrorDetails && errorCount > 0 && (isFullErrorVerbosity || debugMode);
   const hideCWD = settings.merged.ui.footer.hideCWD;
   const hideSandboxStatus = settings.merged.ui.footer.hideSandboxStatus;
   const hideModelInfo = settings.merged.ui.footer.hideModelInfo;
@@ -180,7 +183,7 @@ export const Footer: React.FC = () => {
                 </Text>
               </Box>
             )}
-            {!showErrorDetails && errorCount > 0 && (
+            {showErrorSummary && (
               <Box paddingLeft={1} flexDirection="row">
                 <Text color={theme.ui.comment}>| </Text>
                 <ConsoleSummaryDisplay errorCount={errorCount} />
diff --git a/packages/cli/src/ui/components/HistoryItemDisplay.tsx b/packages/cli/src/ui/components/HistoryItemDisplay.tsx
index 2fceacdf2f..458452d795 100644
--- a/packages/cli/src/ui/components/HistoryItemDisplay.tsx
+++ b/packages/cli/src/ui/components/HistoryItemDisplay.tsx
@@ -146,6 +146,7 @@ export const HistoryItemDisplay: React.FC<HistoryItemDisplayProps> = ({
                 }
               : undefined
           }
+          creditBalance={itemForDisplay.creditBalance}
         />
       )}
       {itemForDisplay.type === 'model_stats' && (
diff --git a/packages/cli/src/ui/components/InputPrompt.tsx b/packages/cli/src/ui/components/InputPrompt.tsx
index ac17284189..38b62ad927 100644
--- a/packages/cli/src/ui/components/InputPrompt.tsx
+++ b/packages/cli/src/ui/components/InputPrompt.tsx
@@ -895,7 +895,9 @@ export const InputPrompt: React.FC<InputPromptProps> = ({
         completion.isPerfectMatch &&
         keyMatchers[Command.SUBMIT](key) &&
         recentUnsafePasteTime === null &&
-        (!completion.showSuggestions || completion.activeSuggestionIndex <= 0)
+        (!completion.showSuggestions ||
+          (completion.activeSuggestionIndex <= 0 &&
+            !hasUserNavigatedSuggestions.current))
       ) {
         handleSubmit(buffer.text);
         return true;
diff --git a/packages/cli/src/ui/components/OverageMenuDialog.test.tsx b/packages/cli/src/ui/components/OverageMenuDialog.test.tsx
new file mode 100644
index 0000000000..8fb2f7469b
--- /dev/null
+++ b/packages/cli/src/ui/components/OverageMenuDialog.test.tsx
@@ -0,0 +1,228 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { renderWithProviders } from '../../test-utils/render.js';
+import { waitFor } from '../../test-utils/async.js';
+import { act } from 'react';
+import { describe, it, expect, vi, beforeEach, afterEach } from 'vitest';
+import { OverageMenuDialog } from './OverageMenuDialog.js';
+
+const writeKey = (stdin: { write: (data: string) => void }, key: string) => {
+  act(() => {
+    stdin.write(key);
+  });
+};
+
+describe('OverageMenuDialog', () => {
+  const mockOnChoice = vi.fn();
+
+  beforeEach(() => {
+    vi.clearAllMocks();
+  });
+
+  afterEach(() => {
+    vi.restoreAllMocks();
+  });
+
+  describe('rendering', () => {
+    it('should match snapshot with fallback available', async () => {
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <OverageMenuDialog
+          failedModel="gemini-2.5-pro"
+          fallbackModel="gemini-3-flash-preview"
+          resetTime="2:00 PM"
+          creditBalance={500}
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      expect(lastFrame()).toMatchSnapshot();
+      unmount();
+    });
+
+    it('should match snapshot without fallback', async () => {
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <OverageMenuDialog
+          failedModel="gemini-2.5-pro"
+          creditBalance={500}
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      expect(lastFrame()).toMatchSnapshot();
+      unmount();
+    });
+
+    it('should display the credit balance', async () => {
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <OverageMenuDialog
+          failedModel="gemini-2.5-pro"
+          creditBalance={200}
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      const output = lastFrame() ?? '';
+      expect(output).toContain('200');
+      expect(output).toContain('AI Credits available');
+      unmount();
+    });
+
+    it('should display the model name', async () => {
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <OverageMenuDialog
+          failedModel="gemini-2.5-pro"
+          creditBalance={100}
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      const output = lastFrame() ?? '';
+      expect(output).toContain('gemini-2.5-pro');
+      expect(output).toContain('Usage limit reached');
+      unmount();
+    });
+
+    it('should display reset time when provided', async () => {
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <OverageMenuDialog
+          failedModel="gemini-2.5-pro"
+          resetTime="3:45 PM"
+          creditBalance={100}
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      const output = lastFrame() ?? '';
+      expect(output).toContain('3:45 PM');
+      expect(output).toContain('Access resets at');
+      unmount();
+    });
+
+    it('should not display reset time when not provided', async () => {
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <OverageMenuDialog
+          failedModel="gemini-2.5-pro"
+          creditBalance={100}
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      const output = lastFrame() ?? '';
+      expect(output).not.toContain('Access resets at');
+      unmount();
+    });
+
+    it('should display slash command hints', async () => {
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <OverageMenuDialog
+          failedModel="gemini-2.5-pro"
+          creditBalance={100}
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      const output = lastFrame() ?? '';
+      expect(output).toContain('/stats');
+      expect(output).toContain('/model');
+      expect(output).toContain('/auth');
+      unmount();
+    });
+  });
+
+  describe('onChoice handling', () => {
+    it('should call onChoice with use_credits when selected', async () => {
+      // use_credits is the first item, so just press Enter
+      const { unmount, stdin, waitUntilReady } = renderWithProviders(
+        <OverageMenuDialog
+          failedModel="gemini-2.5-pro"
+          creditBalance={100}
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      writeKey(stdin, '\r');
+
+      await waitFor(() => {
+        expect(mockOnChoice).toHaveBeenCalledWith('use_credits');
+      });
+      unmount();
+    });
+
+    it('should call onChoice with manage when selected', async () => {
+      // manage is the second item: Down + Enter
+      const { unmount, stdin, waitUntilReady } = renderWithProviders(
+        <OverageMenuDialog
+          failedModel="gemini-2.5-pro"
+          creditBalance={100}
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      writeKey(stdin, '\x1b[B'); // Down arrow
+      writeKey(stdin, '\r');
+
+      await waitFor(() => {
+        expect(mockOnChoice).toHaveBeenCalledWith('manage');
+      });
+      unmount();
+    });
+
+    it('should call onChoice with use_fallback when selected', async () => {
+      // With fallback: items are [use_credits, manage, use_fallback, stop]
+      // use_fallback is the third item: Down x2 + Enter
+      const { unmount, stdin, waitUntilReady } = renderWithProviders(
+        <OverageMenuDialog
+          failedModel="gemini-2.5-pro"
+          fallbackModel="gemini-3-flash-preview"
+          creditBalance={100}
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      writeKey(stdin, '\x1b[B'); // Down arrow
+      writeKey(stdin, '\x1b[B'); // Down arrow
+      writeKey(stdin, '\r');
+
+      await waitFor(() => {
+        expect(mockOnChoice).toHaveBeenCalledWith('use_fallback');
+      });
+      unmount();
+    });
+
+    it('should call onChoice with stop when selected', async () => {
+      // Without fallback: items are [use_credits, manage, stop]
+      // stop is the third item: Down x2 + Enter
+      const { unmount, stdin, waitUntilReady } = renderWithProviders(
+        <OverageMenuDialog
+          failedModel="gemini-2.5-pro"
+          creditBalance={100}
+          onChoice={mockOnChoice}
+        />,
+      );
+      await waitUntilReady();
+
+      writeKey(stdin, '\x1b[B'); // Down arrow
+      writeKey(stdin, '\x1b[B'); // Down arrow
+      writeKey(stdin, '\r');
+
+      await waitFor(() => {
+        expect(mockOnChoice).toHaveBeenCalledWith('stop');
+      });
+      unmount();
+    });
+  });
+});
diff --git a/packages/cli/src/ui/components/OverageMenuDialog.tsx b/packages/cli/src/ui/components/OverageMenuDialog.tsx
new file mode 100644
index 0000000000..bec84c2553
--- /dev/null
+++ b/packages/cli/src/ui/components/OverageMenuDialog.tsx
@@ -0,0 +1,113 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import type React from 'react';
+import { Box, Text } from 'ink';
+import { RadioButtonSelect } from './shared/RadioButtonSelect.js';
+import { theme } from '../semantic-colors.js';
+
+/** Available choices in the overage menu dialog */
+export type OverageMenuChoice =
+  | 'use_credits'
+  | 'use_fallback'
+  | 'manage'
+  | 'stop';
+
+interface OverageMenuDialogProps {
+  /** The model that hit the quota limit */
+  failedModel: string;
+  /** The fallback model to offer (omit if none available) */
+  fallbackModel?: string;
+  /** Time when access resets (human-readable) */
+  resetTime?: string;
+  /** Available G1 AI credit balance */
+  creditBalance: number;
+  /** Callback when user makes a selection */
+  onChoice: (choice: OverageMenuChoice) => void;
+}
+
+export function OverageMenuDialog({
+  failedModel,
+  fallbackModel,
+  resetTime,
+  creditBalance,
+  onChoice,
+}: OverageMenuDialogProps): React.JSX.Element {
+  const items: Array<{
+    label: string;
+    value: OverageMenuChoice;
+    key: string;
+  }> = [
+    {
+      label: 'Use AI Credits - Continue this request (Overage)',
+      value: 'use_credits',
+      key: 'use_credits',
+    },
+    {
+      label: 'Manage - View balance and purchase more credits',
+      value: 'manage',
+      key: 'manage',
+    },
+  ];
+
+  if (fallbackModel) {
+    items.push({
+      label: `Switch to ${fallbackModel}`,
+      value: 'use_fallback',
+      key: 'use_fallback',
+    });
+  }
+
+  items.push({
+    label: 'Stop - Abort request',
+    value: 'stop',
+    key: 'stop',
+  });
+
+  return (
+    <Box borderStyle="round" flexDirection="column" padding={1}>
+      <Box marginBottom={1} flexDirection="column">
+        <Text color={theme.status.warning}>
+          Usage limit reached for {failedModel}.
+        </Text>
+        {resetTime && <Text>Access resets at {resetTime}.</Text>}
+        <Text>
+          <Text bold color={theme.text.accent}>
+            /stats
+          </Text>{' '}
+          model for usage details
+        </Text>
+        <Text>
+          <Text bold color={theme.text.accent}>
+            /model
+          </Text>{' '}
+          to switch models.
+        </Text>
+        <Text>
+          <Text bold color={theme.text.accent}>
+            /auth
+          </Text>{' '}
+          to switch to API key.
+        </Text>
+      </Box>
+      <Box marginBottom={1}>
+        <Text>
+          You have{' '}
+          <Text bold color={theme.status.success}>
+            {creditBalance}
+          </Text>{' '}
+          AI Credits available.
+        </Text>
+      </Box>
+      <Box marginBottom={1}>
+        <Text>How would you like to proceed?</Text>
+      </Box>
+      <Box marginTop={1} marginBottom={1}>
+        <RadioButtonSelect items={items} onSelect={onChoice} />
+      </Box>
+    </Box>
+  );
+}
diff --git a/packages/cli/src/ui/components/StatsDisplay.tsx b/packages/cli/src/ui/components/StatsDisplay.tsx
index d12dd4eb07..65169f6d74 100644
--- a/packages/cli/src/ui/components/StatsDisplay.tsx
+++ b/packages/cli/src/ui/components/StatsDisplay.tsx
@@ -395,6 +395,7 @@ interface StatsDisplayProps {
   tier?: string;
   currentModel?: string;
   quotaStats?: QuotaStats;
+  creditBalance?: number;
 }
 
 export const StatsDisplay: React.FC<StatsDisplayProps> = ({
@@ -407,6 +408,7 @@ export const StatsDisplay: React.FC<StatsDisplayProps> = ({
   tier,
   currentModel,
   quotaStats,
+  creditBalance,
 }) => {
   const { stats } = useSessionStats();
   const { metrics } = stats;
@@ -488,6 +490,17 @@ export const StatsDisplay: React.FC<StatsDisplayProps> = ({
             <Text color={theme.text.primary}>{tier}</Text>
           </StatRow>
         )}
+        {showUserIdentity && creditBalance != null && creditBalance >= 0 && (
+          <StatRow title="Google AI Credits:">
+            <Text
+              color={
+                creditBalance > 0 ? theme.text.primary : theme.text.secondary
+              }
+            >
+              {creditBalance.toLocaleString()}
+            </Text>
+          </StatRow>
+        )}
         <StatRow title="Tool Calls:">
           <Text color={theme.text.primary}>
             {tools.totalCalls} ({' '}
diff --git a/packages/cli/src/ui/components/__snapshots__/EmptyWalletDialog.test.tsx.snap b/packages/cli/src/ui/components/__snapshots__/EmptyWalletDialog.test.tsx.snap
new file mode 100644
index 0000000000..c8ebd612af
--- /dev/null
+++ b/packages/cli/src/ui/components/__snapshots__/EmptyWalletDialog.test.tsx.snap
@@ -0,0 +1,49 @@
+// Vitest Snapshot v1, https://vitest.dev/guide/snapshot.html
+
+exports[`EmptyWalletDialog > rendering > should match snapshot with fallback available 1`] = `
+"╭──────────────────────────────────────────────────────────────────────────────────────────────────╮
+│                                                                                                  │
+│ Usage limit reached for gemini-2.5-pro.                                                          │
+│ Access resets at 2:00 PM.                                                                        │
+│ /stats model for usage details                                                                   │
+│ /model to switch models.                                                                         │
+│ /auth to switch to API key.                                                                      │
+│                                                                                                  │
+│ To continue using this model now, purchase more AI Credits.                                      │
+│                                                                                                  │
+│ Newly purchased AI credits may take a few minutes to update.                                     │
+│                                                                                                  │
+│ How would you like to proceed?                                                                   │
+│                                                                                                  │
+│                                                                                                  │
+│ ● 1. Get AI Credits - Open browser to purchase credits                                           │
+│   2. Switch to gemini-3-flash-preview                                                            │
+│   3. Stop - Abort request                                                                        │
+│                                                                                                  │
+│                                                                                                  │
+╰──────────────────────────────────────────────────────────────────────────────────────────────────╯
+"
+`;
+
+exports[`EmptyWalletDialog > rendering > should match snapshot without fallback 1`] = `
+"╭──────────────────────────────────────────────────────────────────────────────────────────────────╮
+│                                                                                                  │
+│ Usage limit reached for gemini-2.5-pro.                                                          │
+│ /stats model for usage details                                                                   │
+│ /model to switch models.                                                                         │
+│ /auth to switch to API key.                                                                      │
+│                                                                                                  │
+│ To continue using this model now, purchase more AI Credits.                                      │
+│                                                                                                  │
+│ Newly purchased AI credits may take a few minutes to update.                                     │
+│                                                                                                  │
+│ How would you like to proceed?                                                                   │
+│                                                                                                  │
+│                                                                                                  │
+│ ● 1. Get AI Credits - Open browser to purchase credits                                           │
+│   2. Stop - Abort request                                                                        │
+│                                                                                                  │
+│                                                                                                  │
+╰──────────────────────────────────────────────────────────────────────────────────────────────────╯
+"
+`;
diff --git a/packages/cli/src/ui/components/__snapshots__/OverageMenuDialog.test.tsx.snap b/packages/cli/src/ui/components/__snapshots__/OverageMenuDialog.test.tsx.snap
new file mode 100644
index 0000000000..978c5cd17c
--- /dev/null
+++ b/packages/cli/src/ui/components/__snapshots__/OverageMenuDialog.test.tsx.snap
@@ -0,0 +1,47 @@
+// Vitest Snapshot v1, https://vitest.dev/guide/snapshot.html
+
+exports[`OverageMenuDialog > rendering > should match snapshot with fallback available 1`] = `
+"╭──────────────────────────────────────────────────────────────────────────────────────────────────╮
+│                                                                                                  │
+│ Usage limit reached for gemini-2.5-pro.                                                          │
+│ Access resets at 2:00 PM.                                                                        │
+│ /stats model for usage details                                                                   │
+│ /model to switch models.                                                                         │
+│ /auth to switch to API key.                                                                      │
+│                                                                                                  │
+│ You have 500 AI Credits available.                                                               │
+│                                                                                                  │
+│ How would you like to proceed?                                                                   │
+│                                                                                                  │
+│                                                                                                  │
+│ ● 1. Use AI Credits - Continue this request (Overage)                                            │
+│   2. Manage - View balance and purchase more credits                                             │
+│   3. Switch to gemini-3-flash-preview                                                            │
+│   4. Stop - Abort request                                                                        │
+│                                                                                                  │
+│                                                                                                  │
+╰──────────────────────────────────────────────────────────────────────────────────────────────────╯
+"
+`;
+
+exports[`OverageMenuDialog > rendering > should match snapshot without fallback 1`] = `
+"╭──────────────────────────────────────────────────────────────────────────────────────────────────╮
+│                                                                                                  │
+│ Usage limit reached for gemini-2.5-pro.                                                          │
+│ /stats model for usage details                                                                   │
+│ /model to switch models.                                                                         │
+│ /auth to switch to API key.                                                                      │
+│                                                                                                  │
+│ You have 500 AI Credits available.                                                               │
+│                                                                                                  │
+│ How would you like to proceed?                                                                   │
+│                                                                                                  │
+│                                                                                                  │
+│ ● 1. Use AI Credits - Continue this request (Overage)                                            │
+│   2. Manage - View balance and purchase more credits                                             │
+│   3. Stop - Abort request                                                                        │
+│                                                                                                  │
+│                                                                                                  │
+╰──────────────────────────────────────────────────────────────────────────────────────────────────╯
+"
+`;
diff --git a/packages/cli/src/ui/components/messages/ToolGroupMessage.test.tsx b/packages/cli/src/ui/components/messages/ToolGroupMessage.test.tsx
index 1ead1503e5..056e6a54b4 100644
--- a/packages/cli/src/ui/components/messages/ToolGroupMessage.test.tsx
+++ b/packages/cli/src/ui/components/messages/ToolGroupMessage.test.tsx
@@ -25,6 +25,7 @@ import {
   GLOB_DISPLAY_NAME,
 } from '@google/gemini-cli-core';
 import os from 'node:os';
+import { createMockSettings } from '../../../test-utils/settings.js';
 
 describe('<ToolGroupMessage />', () => {
   afterEach(() => {
@@ -64,6 +65,11 @@ describe('<ToolGroupMessage />', () => {
     ideMode: false,
     enableInteractiveShell: true,
   });
+  const fullVerbositySettings = createMockSettings({
+    merged: {
+      ui: { errorVerbosity: 'full' },
+    },
+  });
 
   describe('Golden Snapshots', () => {
     it('renders single successful tool call', async () => {
@@ -73,6 +79,7 @@ describe('<ToolGroupMessage />', () => {
         <ToolGroupMessage {...baseProps} item={item} toolCalls={toolCalls} />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           uiState: {
             pendingHistoryItems: [
               {
@@ -104,7 +111,7 @@ describe('<ToolGroupMessage />', () => {
 
       const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
         <ToolGroupMessage {...baseProps} item={item} toolCalls={toolCalls} />,
-        { config: baseMockConfig },
+        { config: baseMockConfig, settings: fullVerbositySettings },
       );
 
       // Should render nothing because all tools in the group are confirming
@@ -140,6 +147,7 @@ describe('<ToolGroupMessage />', () => {
         <ToolGroupMessage {...baseProps} item={item} toolCalls={toolCalls} />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           uiState: {
             pendingHistoryItems: [
               {
@@ -160,6 +168,76 @@ describe('<ToolGroupMessage />', () => {
       unmount();
     });
 
+    it('hides errored tool calls in low error verbosity mode', async () => {
+      const toolCalls = [
+        createToolCall({
+          callId: 'tool-1',
+          name: 'successful-tool',
+          status: CoreToolCallStatus.Success,
+        }),
+        createToolCall({
+          callId: 'tool-2',
+          name: 'error-tool',
+          status: CoreToolCallStatus.Error,
+          resultDisplay: 'Tool failed',
+        }),
+      ];
+      const item = createItem(toolCalls);
+
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <ToolGroupMessage {...baseProps} item={item} toolCalls={toolCalls} />,
+        {
+          config: baseMockConfig,
+          uiState: {
+            pendingHistoryItems: [
+              {
+                type: 'tool_group',
+                tools: toolCalls,
+              },
+            ],
+          },
+        },
+      );
+      await waitUntilReady();
+      const output = lastFrame();
+      expect(output).toContain('successful-tool');
+      expect(output).not.toContain('error-tool');
+      unmount();
+    });
+
+    it('keeps client-initiated errored tool calls visible in low error verbosity mode', async () => {
+      const toolCalls = [
+        createToolCall({
+          callId: 'tool-1',
+          name: 'client-error-tool',
+          status: CoreToolCallStatus.Error,
+          isClientInitiated: true,
+          resultDisplay: 'Client tool failed',
+        }),
+      ];
+      const item = createItem(toolCalls);
+
+      const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
+        <ToolGroupMessage {...baseProps} item={item} toolCalls={toolCalls} />,
+        {
+          config: baseMockConfig,
+          uiState: {
+            pendingHistoryItems: [
+              {
+                type: 'tool_group',
+                tools: toolCalls,
+              },
+            ],
+          },
+        },
+      );
+
+      await waitUntilReady();
+      const output = lastFrame();
+      expect(output).toContain('client-error-tool');
+      unmount();
+    });
+
     it('renders mixed tool calls including shell command', async () => {
       const toolCalls = [
         createToolCall({
@@ -187,6 +265,7 @@ describe('<ToolGroupMessage />', () => {
         <ToolGroupMessage {...baseProps} item={item} toolCalls={toolCalls} />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           uiState: {
             pendingHistoryItems: [
               {
@@ -233,6 +312,7 @@ describe('<ToolGroupMessage />', () => {
         />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           uiState: {
             pendingHistoryItems: [
               {
@@ -266,6 +346,7 @@ describe('<ToolGroupMessage />', () => {
         />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           uiState: {
             pendingHistoryItems: [
               {
@@ -288,6 +369,7 @@ describe('<ToolGroupMessage />', () => {
         <ToolGroupMessage {...baseProps} item={item} toolCalls={toolCalls} />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           uiState: {
             pendingHistoryItems: [
               {
@@ -326,6 +408,7 @@ describe('<ToolGroupMessage />', () => {
         </Scrollable>,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           uiState: {
             pendingHistoryItems: [
               {
@@ -356,6 +439,7 @@ describe('<ToolGroupMessage />', () => {
         <ToolGroupMessage {...baseProps} item={item} toolCalls={toolCalls} />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           uiState: {
             pendingHistoryItems: [
               {
@@ -406,6 +490,7 @@ describe('<ToolGroupMessage />', () => {
         </Scrollable>,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           uiState: {
             pendingHistoryItems: [
               {
@@ -439,6 +524,7 @@ describe('<ToolGroupMessage />', () => {
         <ToolGroupMessage {...baseProps} item={item} toolCalls={toolCalls} />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           uiState: {
             pendingHistoryItems: [
               {
@@ -468,6 +554,7 @@ describe('<ToolGroupMessage />', () => {
         <ToolGroupMessage {...baseProps} item={item} toolCalls={toolCalls} />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           uiState: {
             pendingHistoryItems: [
               {
@@ -510,6 +597,7 @@ describe('<ToolGroupMessage />', () => {
         />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           uiState: {
             pendingHistoryItems: [
               {
@@ -569,7 +657,7 @@ describe('<ToolGroupMessage />', () => {
 
         const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
           <ToolGroupMessage {...baseProps} item={item} toolCalls={toolCalls} />,
-          { config: baseMockConfig },
+          { config: baseMockConfig, settings: fullVerbositySettings },
         );
         await waitUntilReady();
 
@@ -599,7 +687,7 @@ describe('<ToolGroupMessage />', () => {
 
       const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
         <ToolGroupMessage {...baseProps} item={item} toolCalls={toolCalls} />,
-        { config: baseMockConfig },
+        { config: baseMockConfig, settings: fullVerbositySettings },
       );
 
       await waitUntilReady();
@@ -627,7 +715,7 @@ describe('<ToolGroupMessage />', () => {
           toolCalls={toolCalls}
           borderBottom={false}
         />,
-        { config: baseMockConfig },
+        { config: baseMockConfig, settings: fullVerbositySettings },
       );
       // AskUser tools in progress are rendered by AskUserDialog, so we expect nothing.
       await waitUntilReady();
@@ -665,7 +753,7 @@ describe('<ToolGroupMessage />', () => {
 
         const { lastFrame, unmount, waitUntilReady } = renderWithProviders(
           <ToolGroupMessage {...baseProps} item={item} toolCalls={toolCalls} />,
-          { config: baseMockConfig },
+          { config: baseMockConfig, settings: fullVerbositySettings },
         );
 
         await waitUntilReady();
@@ -697,6 +785,7 @@ describe('<ToolGroupMessage />', () => {
         />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           useAlternateBuffer: true,
           uiState: {
             constrainHeight: true,
@@ -728,6 +817,7 @@ describe('<ToolGroupMessage />', () => {
         />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           useAlternateBuffer: true,
           uiState: {
             constrainHeight: true,
@@ -760,6 +850,7 @@ describe('<ToolGroupMessage />', () => {
         />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           useAlternateBuffer: true,
           uiState: {
             constrainHeight: true,
@@ -791,6 +882,7 @@ describe('<ToolGroupMessage />', () => {
         />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           useAlternateBuffer: true,
           uiState: {
             constrainHeight: true,
@@ -818,6 +910,7 @@ describe('<ToolGroupMessage />', () => {
         />,
         {
           config: baseMockConfig,
+          settings: fullVerbositySettings,
           useAlternateBuffer: true,
           uiState: {
             constrainHeight: false,
@@ -850,6 +943,7 @@ describe('<ToolGroupMessage />', () => {
           />,
           {
             config: baseMockConfig,
+            settings: fullVerbositySettings,
             useAlternateBuffer: true,
             uiState: {
               constrainHeight: true,
diff --git a/packages/cli/src/ui/components/messages/ToolGroupMessage.tsx b/packages/cli/src/ui/components/messages/ToolGroupMessage.tsx
index 3c3dcf56d3..29e485a27c 100644
--- a/packages/cli/src/ui/components/messages/ToolGroupMessage.tsx
+++ b/packages/cli/src/ui/components/messages/ToolGroupMessage.tsx
@@ -18,7 +18,10 @@ import { ShellToolMessage } from './ShellToolMessage.js';
 import { theme } from '../../semantic-colors.js';
 import { useConfig } from '../../contexts/ConfigContext.js';
 import { isShellTool, isThisShellFocused } from './ToolShared.js';
-import { shouldHideToolCall } from '@google/gemini-cli-core';
+import {
+  shouldHideToolCall,
+  CoreToolCallStatus,
+} from '@google/gemini-cli-core';
 import { ShowMoreLines } from '../ShowMoreLines.js';
 import { useUIState } from '../../contexts/UIStateContext.js';
 import { useAlternateBuffer } from '../../hooks/useAlternateBuffer.js';
@@ -27,6 +30,7 @@ import {
   calculateToolContentMaxLines,
 } from '../../utils/toolLayoutUtils.js';
 import { getToolGroupBorderAppearance } from '../../utils/borderStyles.js';
+import { useSettings } from '../../contexts/SettingsContext.js';
 
 interface ToolGroupMessageProps {
   item: HistoryItem | HistoryItemWithoutId;
@@ -51,19 +55,29 @@ export const ToolGroupMessage: React.FC<ToolGroupMessageProps> = ({
   borderBottom: borderBottomOverride,
   isExpandable,
 }) => {
+  const settings = useSettings();
+  const isLowErrorVerbosity = settings.merged.ui?.errorVerbosity !== 'full';
+
   // Filter out tool calls that should be hidden (e.g. in-progress Ask User, or Plan Mode operations).
   const toolCalls = useMemo(
     () =>
-      allToolCalls.filter(
-        (t) =>
-          !shouldHideToolCall({
-            displayName: t.name,
-            status: t.status,
-            approvalMode: t.approvalMode,
-            hasResultDisplay: !!t.resultDisplay,
-          }),
-      ),
-    [allToolCalls],
+      allToolCalls.filter((t) => {
+        if (
+          isLowErrorVerbosity &&
+          t.status === CoreToolCallStatus.Error &&
+          !t.isClientInitiated
+        ) {
+          return false;
+        }
+
+        return !shouldHideToolCall({
+          displayName: t.name,
+          status: t.status,
+          approvalMode: t.approvalMode,
+          hasResultDisplay: !!t.resultDisplay,
+        });
+      }),
+    [allToolCalls, isLowErrorVerbosity],
   );
 
   const config = useConfig();
diff --git a/packages/cli/src/ui/components/messages/ToolResultDisplayOverflow.test.tsx b/packages/cli/src/ui/components/messages/ToolResultDisplayOverflow.test.tsx
index a1d4106cea..2dff7d25e7 100644
--- a/packages/cli/src/ui/components/messages/ToolResultDisplayOverflow.test.tsx
+++ b/packages/cli/src/ui/components/messages/ToolResultDisplayOverflow.test.tsx
@@ -50,10 +50,14 @@ describe('ToolResultDisplay Overflow', () => {
 
     await waitUntilReady();
 
-    // ResizeObserver might take a tick, though ToolGroupMessage calculates overflow synchronously
+    // In ASB mode the overflow hint can render before the scroll position
+    // settles. Wait for both the hint and the tail of the content so this
+    // snapshot is deterministic across slower CI runners.
     await waitFor(() => {
       const frame = lastFrame();
-      expect(frame.toLowerCase()).toContain('press ctrl+o to show more lines');
+      expect(frame).toBeDefined();
+      expect(frame?.toLowerCase()).toContain('press ctrl+o to show more lines');
+      expect(frame).toContain('line 50');
     });
 
     const frame = lastFrame();
diff --git a/packages/cli/src/ui/components/shared/Scrollable.test.tsx b/packages/cli/src/ui/components/shared/Scrollable.test.tsx
index db32a1a2e9..7772cdf22c 100644
--- a/packages/cli/src/ui/components/shared/Scrollable.test.tsx
+++ b/packages/cli/src/ui/components/shared/Scrollable.test.tsx
@@ -6,20 +6,11 @@
 
 import { renderWithProviders } from '../../../test-utils/render.js';
 import { Scrollable } from './Scrollable.js';
-import { Text } from 'ink';
+import { Text, Box } from 'ink';
 import { describe, it, expect, vi, beforeEach } from 'vitest';
 import * as ScrollProviderModule from '../../contexts/ScrollProvider.js';
 import { act } from 'react';
-
-vi.mock('ink', async (importOriginal) => {
-  const actual = await importOriginal<typeof import('ink')>();
-  return {
-    ...actual,
-    getInnerHeight: vi.fn(() => 5),
-    getScrollHeight: vi.fn(() => 10),
-    getBoundingBox: vi.fn(() => ({ x: 0, y: 0, width: 10, height: 5 })),
-  };
-});
+import { waitFor } from '../../../test-utils/async.js';
 
 vi.mock('../../hooks/useAnimatedScrollbar.js', () => ({
   useAnimatedScrollbar: (
@@ -129,20 +120,26 @@ describe('<Scrollable />', () => {
         </Scrollable>,
       );
     await waitUntilReady2();
-    expect(capturedEntry.getScrollState().scrollTop).toBe(5);
+    await waitFor(() => {
+      expect(capturedEntry?.getScrollState().scrollTop).toBe(5);
+    });
 
     // Call scrollBy multiple times (upwards) in the same tick
     await act(async () => {
-      capturedEntry!.scrollBy(-1);
-      capturedEntry!.scrollBy(-1);
+      capturedEntry?.scrollBy(-1);
+      capturedEntry?.scrollBy(-1);
     });
     // Should have moved up by 2 (5 -> 3)
-    expect(capturedEntry.getScrollState().scrollTop).toBe(3);
+    await waitFor(() => {
+      expect(capturedEntry?.getScrollState().scrollTop).toBe(3);
+    });
 
     await act(async () => {
-      capturedEntry!.scrollBy(-2);
+      capturedEntry?.scrollBy(-2);
+    });
+    await waitFor(() => {
+      expect(capturedEntry?.getScrollState().scrollTop).toBe(1);
     });
-    expect(capturedEntry.getScrollState().scrollTop).toBe(1);
     unmount2();
   });
 
@@ -191,10 +188,6 @@ describe('<Scrollable />', () => {
         keySequence,
         expectedScrollTop,
       }) => {
-        // Dynamically import ink to mock getScrollHeight
-        const ink = await import('ink');
-        vi.mocked(ink.getScrollHeight).mockReturnValue(scrollHeight);
-
         let capturedEntry: ScrollProviderModule.ScrollableEntry | undefined;
         vi.spyOn(ScrollProviderModule, 'useScrollable').mockImplementation(
           async (entry, isActive) => {
@@ -206,7 +199,9 @@ describe('<Scrollable />', () => {
 
         const { stdin, waitUntilReady, unmount } = renderWithProviders(
           <Scrollable hasFocus={true} height={5}>
-            <Text>Content</Text>
+            <Box height={scrollHeight}>
+              <Text>Content</Text>
+            </Box>
           </Scrollable>,
         );
         await waitUntilReady();
diff --git a/packages/cli/src/ui/components/shared/Scrollable.tsx b/packages/cli/src/ui/components/shared/Scrollable.tsx
index a830cbecfe..87ec6e72d6 100644
--- a/packages/cli/src/ui/components/shared/Scrollable.tsx
+++ b/packages/cli/src/ui/components/shared/Scrollable.tsx
@@ -4,15 +4,9 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
-import React, {
-  useState,
-  useEffect,
-  useRef,
-  useLayoutEffect,
-  useCallback,
-  useMemo,
-} from 'react';
-import { Box, getInnerHeight, getScrollHeight, type DOMElement } from 'ink';
+import type React from 'react';
+import { useState, useRef, useCallback, useMemo, useLayoutEffect } from 'react';
+import { Box, ResizeObserver, type DOMElement } from 'ink';
 import { useKeypress, type Key } from '../../hooks/useKeypress.js';
 import { useScrollable } from '../../contexts/ScrollProvider.js';
 import { useAnimatedScrollbar } from '../../hooks/useAnimatedScrollbar.js';
@@ -41,62 +35,101 @@ export const Scrollable: React.FC<ScrollableProps> = ({
   flexGrow,
 }) => {
   const [scrollTop, setScrollTop] = useState(0);
-  const ref = useRef<DOMElement>(null);
+  const viewportRef = useRef<DOMElement | null>(null);
+  const contentRef = useRef<DOMElement | null>(null);
   const [size, setSize] = useState({
-    innerHeight: 0,
+    innerHeight: typeof height === 'number' ? height : 0,
     scrollHeight: 0,
   });
   const sizeRef = useRef(size);
-  useEffect(() => {
+  const scrollTopRef = useRef(scrollTop);
+
+  useLayoutEffect(() => {
     sizeRef.current = size;
   }, [size]);
 
-  const childrenCountRef = useRef(0);
-
-  // This effect needs to run on every render to correctly measure the container
-  // and scroll to the bottom if new children are added.
-  // eslint-disable-next-line react-hooks/exhaustive-deps
   useLayoutEffect(() => {
-    if (!ref.current) {
-      return;
+    scrollTopRef.current = scrollTop;
+  }, [scrollTop]);
+
+  const viewportObserverRef = useRef<ResizeObserver | null>(null);
+  const contentObserverRef = useRef<ResizeObserver | null>(null);
+
+  const viewportRefCallback = useCallback((node: DOMElement | null) => {
+    viewportObserverRef.current?.disconnect();
+    viewportRef.current = node;
+
+    if (node) {
+      const observer = new ResizeObserver((entries) => {
+        const entry = entries[0];
+        if (entry) {
+          const innerHeight = Math.round(entry.contentRect.height);
+          setSize((prev) => {
+            const scrollHeight = prev.scrollHeight;
+            const isAtBottom =
+              scrollHeight > prev.innerHeight &&
+              scrollTopRef.current >= scrollHeight - prev.innerHeight - 1;
+
+            if (isAtBottom) {
+              setScrollTop(Number.MAX_SAFE_INTEGER);
+            }
+            return { ...prev, innerHeight };
+          });
+        }
+      });
+      observer.observe(node);
+      viewportObserverRef.current = observer;
     }
-    const innerHeight = Math.round(getInnerHeight(ref.current));
-    const scrollHeight = Math.round(getScrollHeight(ref.current));
+  }, []);
 
-    const isAtBottom =
-      scrollHeight > innerHeight && scrollTop >= scrollHeight - innerHeight - 1;
+  const contentRefCallback = useCallback(
+    (node: DOMElement | null) => {
+      contentObserverRef.current?.disconnect();
+      contentRef.current = node;
 
-    if (
-      size.innerHeight !== innerHeight ||
-      size.scrollHeight !== scrollHeight
-    ) {
-      setSize({ innerHeight, scrollHeight });
-      if (isAtBottom) {
-        setScrollTop(Math.max(0, scrollHeight - innerHeight));
+      if (node) {
+        const observer = new ResizeObserver((entries) => {
+          const entry = entries[0];
+          if (entry) {
+            const scrollHeight = Math.round(entry.contentRect.height);
+            setSize((prev) => {
+              const innerHeight = prev.innerHeight;
+              const isAtBottom =
+                prev.scrollHeight > innerHeight &&
+                scrollTopRef.current >= prev.scrollHeight - innerHeight - 1;
+
+              if (
+                isAtBottom ||
+                (scrollToBottom && scrollHeight > prev.scrollHeight)
+              ) {
+                setScrollTop(Number.MAX_SAFE_INTEGER);
+              }
+              return { ...prev, scrollHeight };
+            });
+          }
+        });
+        observer.observe(node);
+        contentObserverRef.current = observer;
       }
-    }
-
-    const childCountCurrent = React.Children.count(children);
-    if (scrollToBottom && childrenCountRef.current !== childCountCurrent) {
-      setScrollTop(Math.max(0, scrollHeight - innerHeight));
-    }
-    childrenCountRef.current = childCountCurrent;
-  });
+    },
+    [scrollToBottom],
+  );
 
   const { getScrollTop, setPendingScrollTop } = useBatchedScroll(scrollTop);
 
   const scrollBy = useCallback(
     (delta: number) => {
       const { scrollHeight, innerHeight } = sizeRef.current;
-      const current = getScrollTop();
-      const next = Math.min(
-        Math.max(0, current + delta),
-        Math.max(0, scrollHeight - innerHeight),
-      );
+      const maxScroll = Math.max(0, scrollHeight - innerHeight);
+      const current = Math.min(getScrollTop(), maxScroll);
+      let next = Math.max(0, current + delta);
+      if (next >= maxScroll) {
+        next = Number.MAX_SAFE_INTEGER;
+      }
       setPendingScrollTop(next);
       setScrollTop(next);
     },
-    [sizeRef, getScrollTop, setPendingScrollTop],
+    [getScrollTop, setPendingScrollTop],
   );
 
   const { scrollbarColor, flashScrollbar, scrollByWithAnimation } =
@@ -107,10 +140,11 @@ export const Scrollable: React.FC<ScrollableProps> = ({
       const { scrollHeight, innerHeight } = sizeRef.current;
       const scrollTop = getScrollTop();
       const maxScroll = Math.max(0, scrollHeight - innerHeight);
+      const actualScrollTop = Math.min(scrollTop, maxScroll);
 
       // Only capture scroll-up events if there's room;
       // otherwise allow events to bubble.
-      if (scrollTop > 0) {
+      if (actualScrollTop > 0) {
         if (keyMatchers[Command.PAGE_UP](key)) {
           scrollByWithAnimation(-innerHeight);
           return true;
@@ -123,7 +157,7 @@ export const Scrollable: React.FC<ScrollableProps> = ({
 
       // Only capture scroll-down events if there's room;
       // otherwise allow events to bubble.
-      if (scrollTop < maxScroll) {
+      if (actualScrollTop < maxScroll) {
         if (keyMatchers[Command.PAGE_DOWN](key)) {
           scrollByWithAnimation(innerHeight);
           return true;
@@ -140,21 +174,21 @@ export const Scrollable: React.FC<ScrollableProps> = ({
     { isActive: hasFocus },
   );
 
-  const getScrollState = useCallback(
-    () => ({
-      scrollTop: getScrollTop(),
+  const getScrollState = useCallback(() => {
+    const maxScroll = Math.max(0, size.scrollHeight - size.innerHeight);
+    return {
+      scrollTop: Math.min(getScrollTop(), maxScroll),
       scrollHeight: size.scrollHeight,
       innerHeight: size.innerHeight,
-    }),
-    [getScrollTop, size.scrollHeight, size.innerHeight],
-  );
+    };
+  }, [getScrollTop, size.scrollHeight, size.innerHeight]);
 
   const hasFocusCallback = useCallback(() => hasFocus, [hasFocus]);
 
   const scrollableEntry = useMemo(
     () => ({
       // eslint-disable-next-line @typescript-eslint/no-unsafe-type-assertion
-      ref: ref as React.RefObject<DOMElement>,
+      ref: viewportRef as React.RefObject<DOMElement>,
       getScrollState,
       scrollBy: scrollByWithAnimation,
       hasFocus: hasFocusCallback,
@@ -167,7 +201,7 @@ export const Scrollable: React.FC<ScrollableProps> = ({
 
   return (
     <Box
-      ref={ref}
+      ref={viewportRefCallback}
       maxHeight={maxHeight}
       width={width ?? maxWidth}
       height={height}
@@ -183,7 +217,12 @@ export const Scrollable: React.FC<ScrollableProps> = ({
         based on the children's content. It also adds a right padding to
         make room for the scrollbar.
       */}
-      <Box flexShrink={0} paddingRight={1} flexDirection="column">
+      <Box
+        ref={contentRefCallback}
+        flexShrink={0}
+        paddingRight={1}
+        flexDirection="column"
+      >
         {children}
       </Box>
     </Box>
diff --git a/packages/cli/src/ui/components/shared/ScrollableList.test.tsx b/packages/cli/src/ui/components/shared/ScrollableList.test.tsx
index 8b8c4e3fdf..1dd72b89a2 100644
--- a/packages/cli/src/ui/components/shared/ScrollableList.test.tsx
+++ b/packages/cli/src/ui/components/shared/ScrollableList.test.tsx
@@ -479,4 +479,277 @@ describe('ScrollableList Demo Behavior', () => {
       });
     });
   });
+
+  it('regression: remove last item and add 2 items when scrolled to bottom', async () => {
+    let listRef: ScrollableListRef<Item> | null = null;
+    let setItemsFunc: React.Dispatch<React.SetStateAction<Item[]>> | null =
+      null;
+
+    const TestComp = () => {
+      const [items, setItems] = useState<Item[]>(
+        Array.from({ length: 10 }, (_, i) => ({
+          id: String(i),
+          title: `Item ${i}`,
+        })),
+      );
+      useEffect(() => {
+        setItemsFunc = setItems;
+      }, []);
+
+      return (
+        <MouseProvider mouseEventsEnabled={false}>
+          <KeypressProvider>
+            <ScrollProvider>
+              <Box flexDirection="column" width={80} height={5}>
+                <ScrollableList
+                  ref={(ref) => {
+                    listRef = ref;
+                  }}
+                  data={items}
+                  renderItem={({ item }) => <Text>{item.title}</Text>}
+                  estimatedItemHeight={() => 1}
+                  keyExtractor={(item) => item.id}
+                  hasFocus={true}
+                  initialScrollIndex={Number.MAX_SAFE_INTEGER}
+                />
+              </Box>
+            </ScrollProvider>
+          </KeypressProvider>
+        </MouseProvider>
+      );
+    };
+
+    let result: ReturnType<typeof render>;
+    await act(async () => {
+      result = render(<TestComp />);
+    });
+
+    await result!.waitUntilReady();
+
+    // Scrolled to bottom, max scroll = 10 - 5 = 5
+    await waitFor(() => {
+      expect(listRef?.getScrollState()?.scrollTop).toBe(5);
+    });
+
+    // Remove last element and add 2 elements
+    await act(async () => {
+      setItemsFunc!((prev) => {
+        const next = prev.slice(0, prev.length - 1);
+        next.push({ id: '10', title: 'Item 10' });
+        next.push({ id: '11', title: 'Item 11' });
+        return next;
+      });
+    });
+
+    await result!.waitUntilReady();
+
+    // Auto scrolls to new bottom: max scroll = 11 - 5 = 6
+    await waitFor(() => {
+      expect(listRef?.getScrollState()?.scrollTop).toBe(6);
+    });
+
+    // Scroll up slightly
+    await act(async () => {
+      listRef?.scrollBy(-2);
+    });
+    await result!.waitUntilReady();
+
+    await waitFor(() => {
+      expect(listRef?.getScrollState()?.scrollTop).toBe(4);
+    });
+
+    // Scroll back to bottom
+    await act(async () => {
+      listRef?.scrollToEnd();
+    });
+    await result!.waitUntilReady();
+
+    await waitFor(() => {
+      expect(listRef?.getScrollState()?.scrollTop).toBe(6);
+    });
+
+    // Add two more elements
+    await act(async () => {
+      setItemsFunc!((prev) => [
+        ...prev,
+        { id: '12', title: 'Item 12' },
+        { id: '13', title: 'Item 13' },
+      ]);
+    });
+
+    await result!.waitUntilReady();
+
+    // Auto scrolls to bottom: max scroll = 13 - 5 = 8
+    await waitFor(() => {
+      expect(listRef?.getScrollState()?.scrollTop).toBe(8);
+    });
+
+    result!.unmount();
+  });
+
+  it('regression: bottom-most element changes size but list does not update', async () => {
+    let listRef: ScrollableListRef<Item> | null = null;
+    let expandLastFunc: (() => void) | null = null;
+
+    const ItemWithState = ({
+      item,
+      isLast,
+    }: {
+      item: Item;
+      isLast: boolean;
+    }) => {
+      const [expanded, setExpanded] = useState(false);
+      useEffect(() => {
+        if (isLast) {
+          expandLastFunc = () => setExpanded(true);
+        }
+      }, [isLast]);
+      return (
+        <Box flexDirection="column">
+          <Text>{item.title}</Text>
+          {expanded && <Text>Expanded content</Text>}
+        </Box>
+      );
+    };
+
+    const TestComp = () => {
+      // items array is stable
+      const [items] = useState(() =>
+        Array.from({ length: 5 }, (_, i) => ({
+          id: String(i),
+          title: `Item ${i}`,
+        })),
+      );
+
+      return (
+        <MouseProvider mouseEventsEnabled={false}>
+          <KeypressProvider>
+            <ScrollProvider>
+              <Box flexDirection="column" width={80} height={4}>
+                <ScrollableList
+                  ref={(ref) => {
+                    listRef = ref;
+                  }}
+                  data={items}
+                  renderItem={({ item, index }) => (
+                    <ItemWithState item={item} isLast={index === 4} />
+                  )}
+                  estimatedItemHeight={() => 1}
+                  keyExtractor={(item) => item.id}
+                  hasFocus={true}
+                  initialScrollIndex={Number.MAX_SAFE_INTEGER}
+                />
+              </Box>
+            </ScrollProvider>
+          </KeypressProvider>
+        </MouseProvider>
+      );
+    };
+
+    let result: ReturnType<typeof render>;
+    await act(async () => {
+      result = render(<TestComp />);
+    });
+
+    await result!.waitUntilReady();
+
+    // Initially, total height is 5. viewport is 4. scroll is 1.
+    await waitFor(() => {
+      expect(listRef?.getScrollState()?.scrollTop).toBe(1);
+    });
+
+    // Expand the last item locally, without re-rendering the list!
+    await act(async () => {
+      expandLastFunc!();
+    });
+
+    await result!.waitUntilReady();
+
+    // The total height becomes 6. It should remain scrolled to bottom, so scroll becomes 2.
+    // This is expected to FAIL currently because VirtualizedList won't remeasure
+    // unless data changes or container height changes.
+    await waitFor(
+      () => {
+        expect(listRef?.getScrollState()?.scrollTop).toBe(2);
+      },
+      { timeout: 1000 },
+    );
+
+    result!.unmount();
+  });
+
+  it('regression: prepending items does not corrupt heights (total height correct)', async () => {
+    let listRef: ScrollableListRef<Item> | null = null;
+    let setItemsFunc: React.Dispatch<React.SetStateAction<Item[]>> | null =
+      null;
+
+    const TestComp = () => {
+      // Items 1 to 5. Item 1 is very tall.
+      const [items, setItems] = useState<Item[]>(
+        Array.from({ length: 5 }, (_, i) => ({
+          id: String(i + 1),
+          title: `Item ${i + 1}`,
+        })),
+      );
+      useEffect(() => {
+        setItemsFunc = setItems;
+      }, []);
+
+      return (
+        <MouseProvider mouseEventsEnabled={false}>
+          <KeypressProvider>
+            <ScrollProvider>
+              <Box flexDirection="column" width={80} height={10}>
+                <ScrollableList
+                  ref={(ref) => {
+                    listRef = ref;
+                  }}
+                  data={items}
+                  renderItem={({ item }) => (
+                    <Box height={item.id === '1' ? 10 : 2}>
+                      <Text>{item.title}</Text>
+                    </Box>
+                  )}
+                  estimatedItemHeight={() => 2}
+                  keyExtractor={(item) => item.id}
+                  hasFocus={true}
+                  initialScrollIndex={Number.MAX_SAFE_INTEGER}
+                />
+              </Box>
+            </ScrollProvider>
+          </KeypressProvider>
+        </MouseProvider>
+      );
+    };
+
+    let result: ReturnType<typeof render>;
+    await act(async () => {
+      result = render(<TestComp />);
+    });
+
+    await result!.waitUntilReady();
+
+    // Scroll is at bottom.
+    // Heights: Item 1: 10, Item 2: 2, Item 3: 2, Item 4: 2, Item 5: 2.
+    // Total height = 18. Container = 10. Max scroll = 8.
+    await waitFor(() => {
+      expect(listRef?.getScrollState()?.scrollTop).toBe(8);
+    });
+
+    // Prepend an item!
+    await act(async () => {
+      setItemsFunc!((prev) => [{ id: '0', title: 'Item 0' }, ...prev]);
+    });
+
+    await result!.waitUntilReady();
+
+    // Now items: 0(2), 1(10), 2(2), 3(2), 4(2), 5(2).
+    // Total height = 20. Container = 10. Max scroll = 10.
+    // Auto-scrolls to bottom because it was sticking!
+    await waitFor(() => {
+      expect(listRef?.getScrollState()?.scrollTop).toBe(10);
+    });
+
+    result!.unmount();
+  });
 });
diff --git a/packages/cli/src/ui/components/shared/ScrollableList.tsx b/packages/cli/src/ui/components/shared/ScrollableList.tsx
index e51acd6446..b7085329a3 100644
--- a/packages/cli/src/ui/components/shared/ScrollableList.tsx
+++ b/packages/cli/src/ui/components/shared/ScrollableList.tsx
@@ -10,7 +10,7 @@ import {
   useImperativeHandle,
   useCallback,
   useMemo,
-  useEffect,
+  useLayoutEffect,
 } from 'react';
 import type React from 'react';
 import {
@@ -105,7 +105,7 @@ function ScrollableList<T>(
     smoothScrollState.current.active = false;
   }, []);
 
-  useEffect(() => stopSmoothScroll, [stopSmoothScroll]);
+  useLayoutEffect(() => stopSmoothScroll, [stopSmoothScroll]);
 
   const smoothScrollTo = useCallback(
     (
@@ -120,15 +120,19 @@ function ScrollableList<T>(
         innerHeight: 0,
       };
       const {
-        scrollTop: startScrollTop,
+        scrollTop: rawStartScrollTop,
         scrollHeight,
         innerHeight,
       } = scrollState;
 
       const maxScrollTop = Math.max(0, scrollHeight - innerHeight);
+      const startScrollTop = Math.min(rawStartScrollTop, maxScrollTop);
 
       let effectiveTarget = targetScrollTop;
-      if (targetScrollTop === SCROLL_TO_ITEM_END) {
+      if (
+        targetScrollTop === SCROLL_TO_ITEM_END ||
+        targetScrollTop >= maxScrollTop
+      ) {
         effectiveTarget = maxScrollTop;
       }
 
@@ -138,8 +142,11 @@ function ScrollableList<T>(
       );
 
       if (duration === 0) {
-        if (targetScrollTop === SCROLL_TO_ITEM_END) {
-          virtualizedListRef.current?.scrollTo(SCROLL_TO_ITEM_END);
+        if (
+          targetScrollTop === SCROLL_TO_ITEM_END ||
+          targetScrollTop >= maxScrollTop
+        ) {
+          virtualizedListRef.current?.scrollTo(Number.MAX_SAFE_INTEGER);
         } else {
           virtualizedListRef.current?.scrollTo(Math.round(clampedTarget));
         }
@@ -168,8 +175,11 @@ function ScrollableList<T>(
               ease;
 
           if (progress >= 1) {
-            if (targetScrollTop === SCROLL_TO_ITEM_END) {
-              virtualizedListRef.current?.scrollTo(SCROLL_TO_ITEM_END);
+            if (
+              targetScrollTop === SCROLL_TO_ITEM_END ||
+              targetScrollTop >= maxScrollTop
+            ) {
+              virtualizedListRef.current?.scrollTo(Number.MAX_SAFE_INTEGER);
             } else {
               virtualizedListRef.current?.scrollTo(Math.round(current));
             }
@@ -200,9 +210,13 @@ function ScrollableList<T>(
       ) {
         const direction = keyMatchers[Command.PAGE_UP](key) ? -1 : 1;
         const scrollState = getScrollState();
+        const maxScroll = Math.max(
+          0,
+          scrollState.scrollHeight - scrollState.innerHeight,
+        );
         const current = smoothScrollState.current.active
           ? smoothScrollState.current.to
-          : scrollState.scrollTop;
+          : Math.min(scrollState.scrollTop, maxScroll);
         const innerHeight = scrollState.innerHeight;
         smoothScrollTo(current + direction * innerHeight);
         return true;
diff --git a/packages/cli/src/ui/components/shared/VirtualizedList.test.tsx b/packages/cli/src/ui/components/shared/VirtualizedList.test.tsx
index 0edc323d38..60b8bfc421 100644
--- a/packages/cli/src/ui/components/shared/VirtualizedList.test.tsx
+++ b/packages/cli/src/ui/components/shared/VirtualizedList.test.tsx
@@ -5,6 +5,7 @@
  */
 
 import { render } from '../../../test-utils/render.js';
+import { waitFor } from '../../../test-utils/async.js';
 import { VirtualizedList, type VirtualizedListRef } from './VirtualizedList.js';
 import { Text, Box } from 'ink';
 import {
@@ -275,9 +276,11 @@ describe('<VirtualizedList />', () => {
     await waitUntilReady();
 
     // Now Item 0 is 1px, so Items 1-9 should also be visible to fill 10px
-    expect(lastFrame()).toContain('Item 0');
-    expect(lastFrame()).toContain('Item 1');
-    expect(lastFrame()).toContain('Item 9');
+    await waitFor(() => {
+      expect(lastFrame()).toContain('Item 0');
+      expect(lastFrame()).toContain('Item 1');
+      expect(lastFrame()).toContain('Item 9');
+    });
     unmount();
   });
 
diff --git a/packages/cli/src/ui/components/shared/VirtualizedList.tsx b/packages/cli/src/ui/components/shared/VirtualizedList.tsx
index 98e45a695e..669b1bc035 100644
--- a/packages/cli/src/ui/components/shared/VirtualizedList.tsx
+++ b/packages/cli/src/ui/components/shared/VirtualizedList.tsx
@@ -10,7 +10,6 @@ import {
   useLayoutEffect,
   forwardRef,
   useImperativeHandle,
-  useEffect,
   useMemo,
   useCallback,
 } from 'react';
@@ -19,7 +18,7 @@ import { theme } from '../../semantic-colors.js';
 import { useBatchedScroll } from '../../hooks/useBatchedScroll.js';
 import { useUIState } from '../../contexts/UIStateContext.js';
 
-import { type DOMElement, measureElement, Box } from 'ink';
+import { type DOMElement, Box, ResizeObserver } from 'ink';
 
 export const SCROLL_TO_ITEM_END = Number.MAX_SAFE_INTEGER;
 
@@ -81,7 +80,7 @@ function VirtualizedList<T>(
   } = props;
   const { copyModeEnabled } = useUIState();
   const dataRef = useRef(data);
-  useEffect(() => {
+  useLayoutEffect(() => {
     dataRef.current = data;
   }, [data]);
 
@@ -108,6 +107,7 @@ function VirtualizedList<T>(
 
     return { index: 0, offset: 0 };
   });
+
   const [isStickingToBottom, setIsStickingToBottom] = useState(() => {
     const scrollToEnd =
       initialScrollIndex === SCROLL_TO_ITEM_END ||
@@ -116,73 +116,75 @@ function VirtualizedList<T>(
         initialScrollOffsetInIndex === SCROLL_TO_ITEM_END);
     return scrollToEnd;
   });
-  const containerRef = useRef<DOMElement>(null);
+
+  const containerRef = useRef<DOMElement | null>(null);
   const [containerHeight, setContainerHeight] = useState(0);
   const itemRefs = useRef<Array<DOMElement | null>>([]);
-  const [heights, setHeights] = useState<number[]>([]);
+  const [heights, setHeights] = useState<Record<string, number>>({});
   const isInitialScrollSet = useRef(false);
 
+  const containerObserverRef = useRef<ResizeObserver | null>(null);
+  const nodeToKeyRef = useRef(new WeakMap<DOMElement, string>());
+
+  const containerRefCallback = useCallback((node: DOMElement | null) => {
+    containerObserverRef.current?.disconnect();
+    containerRef.current = node;
+    if (node) {
+      const observer = new ResizeObserver((entries) => {
+        const entry = entries[0];
+        if (entry) {
+          setContainerHeight(Math.round(entry.contentRect.height));
+        }
+      });
+      observer.observe(node);
+      containerObserverRef.current = observer;
+    }
+  }, []);
+
+  const itemsObserver = useMemo(
+    () =>
+      new ResizeObserver((entries) => {
+        setHeights((prev) => {
+          let next: Record<string, number> | null = null;
+          for (const entry of entries) {
+            const key = nodeToKeyRef.current.get(entry.target);
+            if (key !== undefined) {
+              const height = Math.round(entry.contentRect.height);
+              if (prev[key] !== height) {
+                if (!next) {
+                  next = { ...prev };
+                }
+                next[key] = height;
+              }
+            }
+          }
+          return next ?? prev;
+        });
+      }),
+    [],
+  );
+
+  useLayoutEffect(
+    () => () => {
+      containerObserverRef.current?.disconnect();
+      itemsObserver.disconnect();
+    },
+    [itemsObserver],
+  );
+
   const { totalHeight, offsets } = useMemo(() => {
     const offsets: number[] = [0];
     let totalHeight = 0;
     for (let i = 0; i < data.length; i++) {
-      const height = heights[i] ?? estimatedItemHeight(i);
+      const key = keyExtractor(data[i], i);
+      const height = heights[key] ?? estimatedItemHeight(i);
       totalHeight += height;
       offsets.push(totalHeight);
     }
     return { totalHeight, offsets };
-  }, [heights, data, estimatedItemHeight]);
+  }, [heights, data, estimatedItemHeight, keyExtractor]);
 
-  useEffect(() => {
-    setHeights((prevHeights) => {
-      if (data.length === prevHeights.length) {
-        return prevHeights;
-      }
-
-      const newHeights = [...prevHeights];
-      if (data.length < prevHeights.length) {
-        newHeights.length = data.length;
-      } else {
-        for (let i = prevHeights.length; i < data.length; i++) {
-          newHeights[i] = estimatedItemHeight(i);
-        }
-      }
-      return newHeights;
-    });
-  }, [data, estimatedItemHeight]);
-
-  // This layout effect needs to run on every render to correctly measure the
-  // container and ensure we recompute the layout if it has changed.
-  // eslint-disable-next-line react-hooks/exhaustive-deps
-  useLayoutEffect(() => {
-    if (containerRef.current) {
-      const height = Math.round(measureElement(containerRef.current).height);
-      if (containerHeight !== height) {
-        setContainerHeight(height);
-      }
-    }
-
-    let newHeights: number[] | null = null;
-    for (let i = startIndex; i <= endIndex; i++) {
-      const itemRef = itemRefs.current[i];
-      if (itemRef) {
-        const height = Math.round(measureElement(itemRef).height);
-        if (height !== heights[i]) {
-          if (!newHeights) {
-            newHeights = [...heights];
-          }
-          newHeights[i] = height;
-        }
-      }
-    }
-    if (newHeights) {
-      setHeights(newHeights);
-    }
-  });
-
-  const scrollableContainerHeight = containerRef.current
-    ? Math.round(measureElement(containerRef.current).height)
-    : containerHeight;
+  const scrollableContainerHeight = containerHeight;
 
   const getAnchorForScrollTop = useCallback(
     (
@@ -199,23 +201,36 @@ function VirtualizedList<T>(
     [],
   );
 
-  const scrollTop = useMemo(() => {
+  const actualScrollTop = useMemo(() => {
     const offset = offsets[scrollAnchor.index];
     if (typeof offset !== 'number') {
       return 0;
     }
 
     if (scrollAnchor.offset === SCROLL_TO_ITEM_END) {
-      const itemHeight = heights[scrollAnchor.index] ?? 0;
+      const item = data[scrollAnchor.index];
+      const key = item ? keyExtractor(item, scrollAnchor.index) : '';
+      const itemHeight = heights[key] ?? 0;
       return offset + itemHeight - scrollableContainerHeight;
     }
 
     return offset + scrollAnchor.offset;
-  }, [scrollAnchor, offsets, heights, scrollableContainerHeight]);
+  }, [
+    scrollAnchor,
+    offsets,
+    heights,
+    scrollableContainerHeight,
+    data,
+    keyExtractor,
+  ]);
+
+  const scrollTop = isStickingToBottom
+    ? Number.MAX_SAFE_INTEGER
+    : actualScrollTop;
 
   const prevDataLength = useRef(data.length);
   const prevTotalHeight = useRef(totalHeight);
-  const prevScrollTop = useRef(scrollTop);
+  const prevScrollTop = useRef(actualScrollTop);
   const prevContainerHeight = useRef(scrollableContainerHeight);
 
   useLayoutEffect(() => {
@@ -226,9 +241,7 @@ function VirtualizedList<T>(
       prevTotalHeight.current - prevContainerHeight.current - 1;
     const wasAtBottom = contentPreviouslyFit || wasScrolledToBottomPixels;
 
-    // If the user was at the bottom, they are now sticking. This handles
-    // manually scrolling back to the bottom.
-    if (wasAtBottom && scrollTop >= prevScrollTop.current) {
+    if (wasAtBottom && actualScrollTop >= prevScrollTop.current) {
       setIsStickingToBottom(true);
     }
 
@@ -236,9 +249,6 @@ function VirtualizedList<T>(
     const containerChanged =
       prevContainerHeight.current !== scrollableContainerHeight;
 
-    // We scroll to the end if:
-    // 1. The list grew AND we were already at the bottom (or sticking).
-    // 2. We are sticking to the bottom AND the container size changed.
     if (
       (listGrew && (isStickingToBottom || wasAtBottom)) ||
       (isStickingToBottom && containerChanged)
@@ -247,34 +257,28 @@ function VirtualizedList<T>(
         index: data.length > 0 ? data.length - 1 : 0,
         offset: SCROLL_TO_ITEM_END,
       });
-      // If we are scrolling to the bottom, we are by definition sticking.
       if (!isStickingToBottom) {
         setIsStickingToBottom(true);
       }
-    }
-    // Scenario 2: The list has changed (shrunk) in a way that our
-    // current scroll position or anchor is invalid. We should adjust to the bottom.
-    else if (
+    } else if (
       (scrollAnchor.index >= data.length ||
-        scrollTop > totalHeight - scrollableContainerHeight) &&
+        actualScrollTop > totalHeight - scrollableContainerHeight) &&
       data.length > 0
     ) {
       const newScrollTop = Math.max(0, totalHeight - scrollableContainerHeight);
       setScrollAnchor(getAnchorForScrollTop(newScrollTop, offsets));
     } else if (data.length === 0) {
-      // List is now empty, reset scroll to top.
       setScrollAnchor({ index: 0, offset: 0 });
     }
 
-    // Update refs for the next render cycle.
     prevDataLength.current = data.length;
     prevTotalHeight.current = totalHeight;
-    prevScrollTop.current = scrollTop;
+    prevScrollTop.current = actualScrollTop;
     prevContainerHeight.current = scrollableContainerHeight;
   }, [
     data.length,
     totalHeight,
-    scrollTop,
+    actualScrollTop,
     scrollableContainerHeight,
     scrollAnchor.index,
     getAnchorForScrollTop,
@@ -334,10 +338,10 @@ function VirtualizedList<T>(
 
   const startIndex = Math.max(
     0,
-    findLastIndex(offsets, (offset) => offset <= scrollTop) - 1,
+    findLastIndex(offsets, (offset) => offset <= actualScrollTop) - 1,
   );
   const endIndexOffset = offsets.findIndex(
-    (offset) => offset > scrollTop + scrollableContainerHeight,
+    (offset) => offset > actualScrollTop + scrollableContainerHeight,
   );
   const endIndex =
     endIndexOffset === -1
@@ -348,6 +352,32 @@ function VirtualizedList<T>(
   const bottomSpacerHeight =
     totalHeight - (offsets[endIndex + 1] ?? totalHeight);
 
+  // Maintain a stable set of observed nodes using useLayoutEffect
+  const observedNodes = useRef<Set<DOMElement>>(new Set());
+  useLayoutEffect(() => {
+    const currentNodes = new Set<DOMElement>();
+    for (let i = startIndex; i <= endIndex; i++) {
+      const node = itemRefs.current[i];
+      const item = data[i];
+      if (node && item) {
+        currentNodes.add(node);
+        const key = keyExtractor(item, i);
+        // Always update the key mapping because React can reuse nodes at different indices/keys
+        nodeToKeyRef.current.set(node, key);
+        if (!observedNodes.current.has(node)) {
+          itemsObserver.observe(node);
+        }
+      }
+    }
+    for (const node of observedNodes.current) {
+      if (!currentNodes.has(node)) {
+        itemsObserver.unobserve(node);
+        nodeToKeyRef.current.delete(node);
+      }
+    }
+    observedNodes.current = currentNodes;
+  });
+
   const renderedItems = [];
   for (let i = startIndex; i <= endIndex; i++) {
     const item = data[i];
@@ -356,6 +386,8 @@ function VirtualizedList<T>(
         <Box
           key={keyExtractor(item, i)}
           width="100%"
+          flexDirection="column"
+          flexShrink={0}
           ref={(el) => {
             itemRefs.current[i] = el;
           }}
@@ -376,27 +408,39 @@ function VirtualizedList<T>(
           setIsStickingToBottom(false);
         }
         const currentScrollTop = getScrollTop();
-        const newScrollTop = Math.max(
-          0,
-          Math.min(
-            totalHeight - scrollableContainerHeight,
-            currentScrollTop + delta,
-          ),
-        );
+        const maxScroll = Math.max(0, totalHeight - scrollableContainerHeight);
+        const actualCurrent = Math.min(currentScrollTop, maxScroll);
+        let newScrollTop = Math.max(0, actualCurrent + delta);
+        if (newScrollTop >= maxScroll) {
+          setIsStickingToBottom(true);
+          newScrollTop = Number.MAX_SAFE_INTEGER;
+        }
         setPendingScrollTop(newScrollTop);
-        setScrollAnchor(getAnchorForScrollTop(newScrollTop, offsets));
+        setScrollAnchor(
+          getAnchorForScrollTop(Math.min(newScrollTop, maxScroll), offsets),
+        );
       },
       scrollTo: (offset: number) => {
-        setIsStickingToBottom(false);
-        const newScrollTop = Math.max(
-          0,
-          Math.min(totalHeight - scrollableContainerHeight, offset),
-        );
-        setPendingScrollTop(newScrollTop);
-        setScrollAnchor(getAnchorForScrollTop(newScrollTop, offsets));
+        const maxScroll = Math.max(0, totalHeight - scrollableContainerHeight);
+        if (offset >= maxScroll || offset === SCROLL_TO_ITEM_END) {
+          setIsStickingToBottom(true);
+          setPendingScrollTop(Number.MAX_SAFE_INTEGER);
+          if (data.length > 0) {
+            setScrollAnchor({
+              index: data.length - 1,
+              offset: SCROLL_TO_ITEM_END,
+            });
+          }
+        } else {
+          setIsStickingToBottom(false);
+          const newScrollTop = Math.max(0, offset);
+          setPendingScrollTop(newScrollTop);
+          setScrollAnchor(getAnchorForScrollTop(newScrollTop, offsets));
+        }
       },
       scrollToEnd: () => {
         setIsStickingToBottom(true);
+        setPendingScrollTop(Number.MAX_SAFE_INTEGER);
         if (data.length > 0) {
           setScrollAnchor({
             index: data.length - 1,
@@ -416,10 +460,14 @@ function VirtualizedList<T>(
         setIsStickingToBottom(false);
         const offset = offsets[index];
         if (offset !== undefined) {
+          const maxScroll = Math.max(
+            0,
+            totalHeight - scrollableContainerHeight,
+          );
           const newScrollTop = Math.max(
             0,
             Math.min(
-              totalHeight - scrollableContainerHeight,
+              maxScroll,
               offset - viewPosition * scrollableContainerHeight + viewOffset,
             ),
           );
@@ -441,10 +489,14 @@ function VirtualizedList<T>(
         if (index !== -1) {
           const offset = offsets[index];
           if (offset !== undefined) {
+            const maxScroll = Math.max(
+              0,
+              totalHeight - scrollableContainerHeight,
+            );
             const newScrollTop = Math.max(
               0,
               Math.min(
-                totalHeight - scrollableContainerHeight,
+                maxScroll,
                 offset - viewPosition * scrollableContainerHeight + viewOffset,
               ),
             );
@@ -454,11 +506,14 @@ function VirtualizedList<T>(
         }
       },
       getScrollIndex: () => scrollAnchor.index,
-      getScrollState: () => ({
-        scrollTop: getScrollTop(),
-        scrollHeight: totalHeight,
-        innerHeight: containerHeight,
-      }),
+      getScrollState: () => {
+        const maxScroll = Math.max(0, totalHeight - containerHeight);
+        return {
+          scrollTop: Math.min(getScrollTop(), maxScroll),
+          scrollHeight: totalHeight,
+          innerHeight: containerHeight,
+        };
+      },
     }),
     [
       offsets,
@@ -475,7 +530,7 @@ function VirtualizedList<T>(
 
   return (
     <Box
-      ref={containerRef}
+      ref={containerRefCallback}
       overflowY={copyModeEnabled ? 'hidden' : 'scroll'}
       overflowX="hidden"
       scrollTop={copyModeEnabled ? 0 : scrollTop}
@@ -489,7 +544,7 @@ function VirtualizedList<T>(
         flexShrink={0}
         width="100%"
         flexDirection="column"
-        marginTop={copyModeEnabled ? -scrollTop : 0}
+        marginTop={copyModeEnabled ? -actualScrollTop : 0}
       >
         <Box height={topSpacerHeight} flexShrink={0} />
         {renderedItems}
diff --git a/packages/cli/src/ui/components/views/McpStatus.test.tsx b/packages/cli/src/ui/components/views/McpStatus.test.tsx
index 77dccc77fe..1c600069c1 100644
--- a/packages/cli/src/ui/components/views/McpStatus.test.tsx
+++ b/packages/cli/src/ui/components/views/McpStatus.test.tsx
@@ -47,6 +47,7 @@ describe('McpStatus', () => {
         isPersistentDisabled: false,
       },
     },
+    errors: {},
     discoveryInProgress: false,
     connectingServers: [],
     showDescriptions: true,
@@ -208,6 +209,18 @@ describe('McpStatus', () => {
     unmount();
   });
 
+  it('renders correctly with a server error', async () => {
+    const { lastFrame, unmount, waitUntilReady } = render(
+      <McpStatus
+        {...baseProps}
+        errors={{ 'server-1': 'Failed to connect to server' }}
+      />,
+    );
+    await waitUntilReady();
+    expect(lastFrame()).toMatchSnapshot();
+    unmount();
+  });
+
   it('truncates resources when exceeding limit', async () => {
     const manyResources = Array.from({ length: 25 }, (_, i) => ({
       serverName: 'server-1',
diff --git a/packages/cli/src/ui/components/views/McpStatus.tsx b/packages/cli/src/ui/components/views/McpStatus.tsx
index 14ff7bdfc6..473c3de547 100644
--- a/packages/cli/src/ui/components/views/McpStatus.tsx
+++ b/packages/cli/src/ui/components/views/McpStatus.tsx
@@ -26,6 +26,7 @@ interface McpStatusProps {
   serverStatus: (serverName: string) => MCPServerStatus;
   authStatus: HistoryItemMcpStatus['authStatus'];
   enablementState: HistoryItemMcpStatus['enablementState'];
+  errors: Record<string, string>;
   discoveryInProgress: boolean;
   connectingServers: string[];
   showDescriptions: boolean;
@@ -41,6 +42,7 @@ export const McpStatus: React.FC<McpStatusProps> = ({
   serverStatus,
   authStatus,
   enablementState,
+  errors,
   discoveryInProgress,
   connectingServers,
   showDescriptions,
@@ -195,6 +197,14 @@ export const McpStatus: React.FC<McpStatusProps> = ({
               <Text> ({toolCount} tools cached)</Text>
             )}
 
+            {errors[serverName] && (
+              <Box marginLeft={2}>
+                <Text color={theme.status.error}>
+                  Error: {errors[serverName]}
+                </Text>
+              </Box>
+            )}
+
             {showDescriptions && server?.description && (
               <Text color={theme.text.secondary}>
                 {server.description.trim()}
diff --git a/packages/cli/src/ui/components/views/__snapshots__/McpStatus.test.tsx.snap b/packages/cli/src/ui/components/views/__snapshots__/McpStatus.test.tsx.snap
index e7b7af36f2..eb1d1de83c 100644
--- a/packages/cli/src/ui/components/views/__snapshots__/McpStatus.test.tsx.snap
+++ b/packages/cli/src/ui/components/views/__snapshots__/McpStatus.test.tsx.snap
@@ -60,6 +60,18 @@ A test server
 "
 `;
 
+exports[`McpStatus > renders correctly with a server error 1`] = `
+"Configured MCP servers:
+
+🟢 server-1 - Ready (1 tool)
+  Error: Failed to connect to server
+A test server
+  Tools:
+  - tool-1
+    A test tool
+"
+`;
+
 exports[`McpStatus > renders correctly with authenticated OAuth status 1`] = `
 "Configured MCP servers:
 
diff --git a/packages/cli/src/ui/contexts/UIActionsContext.tsx b/packages/cli/src/ui/contexts/UIActionsContext.tsx
index 23c5e995db..988837df4d 100644
--- a/packages/cli/src/ui/contexts/UIActionsContext.tsx
+++ b/packages/cli/src/ui/contexts/UIActionsContext.tsx
@@ -18,6 +18,7 @@ import type { AuthState } from '../types.js';
 import { type PermissionsDialogProps } from '../components/PermissionsModifyTrustDialog.js';
 import type { SessionInfo } from '../../utils/sessionUtils.js';
 import { type NewAgentsChoice } from '../components/NewAgentsNotification.js';
+import type { OverageMenuIntent, EmptyWalletIntent } from './UIStateContext.js';
 
 export interface UIActions {
   handleThemeSelect: (
@@ -62,6 +63,8 @@ export interface UIActions {
     choice: 'retry_later' | 'retry_once' | 'retry_always' | 'upgrade',
   ) => void;
   handleValidationChoice: (choice: 'verify' | 'change_auth' | 'cancel') => void;
+  handleOverageMenuChoice: (choice: OverageMenuIntent) => void;
+  handleEmptyWalletChoice: (choice: EmptyWalletIntent) => void;
   openSessionBrowser: () => void;
   closeSessionBrowser: () => void;
   handleResumeSession: (session: SessionInfo) => Promise<void>;
@@ -88,6 +91,7 @@ export interface UIActions {
   handleRestart: () => void;
   handleNewAgentsSelect: (choice: NewAgentsChoice) => Promise<void>;
   getPreferredEditor: () => EditorType | undefined;
+  clearAccountSuspension: () => void;
 }
 
 export const UIActionsContext = createContext<UIActions | null>(null);
diff --git a/packages/cli/src/ui/contexts/UIStateContext.tsx b/packages/cli/src/ui/contexts/UIStateContext.tsx
index 79464271b8..554cff34f9 100644
--- a/packages/cli/src/ui/contexts/UIStateContext.tsx
+++ b/packages/cli/src/ui/contexts/UIStateContext.tsx
@@ -54,6 +54,34 @@ export interface ValidationDialogRequest {
   resolve: (intent: ValidationIntent) => void;
 }
 
+/** Intent for overage menu dialog */
+export type OverageMenuIntent =
+  | 'use_credits'
+  | 'use_fallback'
+  | 'manage'
+  | 'stop';
+
+export interface OverageMenuDialogRequest {
+  failedModel: string;
+  fallbackModel?: string;
+  resetTime?: string;
+  creditBalance: number;
+  userEmail?: string;
+  resolve: (intent: OverageMenuIntent) => void;
+}
+
+/** Intent for empty wallet dialog */
+export type EmptyWalletIntent = 'get_credits' | 'use_fallback' | 'stop';
+
+export interface EmptyWalletDialogRequest {
+  failedModel: string;
+  fallbackModel?: string;
+  resetTime?: string;
+  userEmail?: string;
+  onGetCredits: () => void;
+  resolve: (intent: EmptyWalletIntent) => void;
+}
+
 import { type UseHistoryManagerReturn } from '../hooks/useHistoryManager.js';
 import { type RestartReason } from '../hooks/useIdeTrustListener.js';
 import type { TerminalBackgroundColor } from '../utils/terminalCapabilityManager.js';
@@ -64,6 +92,15 @@ export interface QuotaState {
   stats: QuotaStats | undefined;
   proQuotaRequest: ProQuotaDialogRequest | null;
   validationRequest: ValidationDialogRequest | null;
+  // G1 AI Credits overage flow
+  overageMenuRequest: OverageMenuDialogRequest | null;
+  emptyWalletRequest: EmptyWalletDialogRequest | null;
+}
+
+export interface AccountSuspensionInfo {
+  message: string;
+  appealUrl?: string;
+  appealLinkText?: string;
 }
 
 export interface UIState {
@@ -76,6 +113,7 @@ export interface UIState {
   isAuthenticating: boolean;
   isConfigInitialized: boolean;
   authError: string | null;
+  accountSuspensionInfo: AccountSuspensionInfo | null;
   isAuthDialogOpen: boolean;
   isAwaitingApiKeyInput: boolean;
   apiKeyDefaultValue?: string;
diff --git a/packages/cli/src/ui/hooks/atCommandProcessor.ts b/packages/cli/src/ui/hooks/atCommandProcessor.ts
index 36868d597b..c23c9fa2db 100644
--- a/packages/cli/src/ui/hooks/atCommandProcessor.ts
+++ b/packages/cli/src/ui/hooks/atCommandProcessor.ts
@@ -413,6 +413,7 @@ async function readMcpResources(
           name: `resources/read (${resource.serverName})`,
           description: resource.uri,
           status: CoreToolCallStatus.Success,
+          isClientInitiated: true,
           resultDisplay: `Successfully read resource ${resource.uri}`,
           confirmationDetails: undefined,
         } as IndividualToolCallDisplay,
@@ -427,6 +428,7 @@ async function readMcpResources(
           name: `resources/read (${resource.serverName})`,
           description: resource.uri,
           status: CoreToolCallStatus.Error,
+          isClientInitiated: true,
           resultDisplay: `Error reading resource ${resource.uri}: ${getErrorMessage(error)}`,
           confirmationDetails: undefined,
         } as IndividualToolCallDisplay,
@@ -506,6 +508,7 @@ async function readLocalFiles(
       name: readManyFilesTool.displayName,
       description: invocation.getDescription(),
       status: CoreToolCallStatus.Success,
+      isClientInitiated: true,
       resultDisplay:
         result.returnDisplay ||
         `Successfully read: ${fileLabelsForDisplay.join(', ')}`,
@@ -565,6 +568,7 @@ async function readLocalFiles(
         invocation?.getDescription() ??
         'Error attempting to execute tool to read files',
       status: CoreToolCallStatus.Error,
+      isClientInitiated: true,
       resultDisplay: `Error reading files (${fileLabelsForDisplay.join(', ')}): ${getErrorMessage(error)}`,
       confirmationDetails: undefined,
     };
diff --git a/packages/cli/src/ui/hooks/creditsFlowHandler.test.ts b/packages/cli/src/ui/hooks/creditsFlowHandler.test.ts
new file mode 100644
index 0000000000..bd3a3aa719
--- /dev/null
+++ b/packages/cli/src/ui/hooks/creditsFlowHandler.test.ts
@@ -0,0 +1,240 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { vi, describe, it, expect, beforeEach, afterEach } from 'vitest';
+import { handleCreditsFlow } from './creditsFlowHandler.js';
+import type { UseHistoryManagerReturn } from './useHistoryManager.js';
+import {
+  type Config,
+  type GeminiUserTier,
+  makeFakeConfig,
+  getG1CreditBalance,
+  shouldAutoUseCredits,
+  shouldShowOverageMenu,
+  shouldShowEmptyWalletMenu,
+  logBillingEvent,
+  G1_CREDIT_TYPE,
+  UserTierId,
+} from '@google/gemini-cli-core';
+import { MessageType } from '../types.js';
+
+vi.mock('@google/gemini-cli-core', async (importOriginal) => {
+  const actual =
+    await importOriginal<typeof import('@google/gemini-cli-core')>();
+  return {
+    ...actual,
+    getG1CreditBalance: vi.fn(),
+    shouldAutoUseCredits: vi.fn(),
+    shouldShowOverageMenu: vi.fn(),
+    shouldShowEmptyWalletMenu: vi.fn(),
+    logBillingEvent: vi.fn(),
+    openBrowserSecurely: vi.fn(),
+  };
+});
+
+describe('handleCreditsFlow', () => {
+  let mockConfig: Config;
+  let mockHistoryManager: UseHistoryManagerReturn;
+  let isDialogPending: React.MutableRefObject<boolean>;
+  let mockSetOverageMenuRequest: ReturnType<typeof vi.fn>;
+  let mockSetEmptyWalletRequest: ReturnType<typeof vi.fn>;
+  let mockSetModelSwitchedFromQuotaError: ReturnType<typeof vi.fn>;
+  const mockPaidTier: GeminiUserTier = {
+    id: UserTierId.STANDARD,
+    availableCredits: [{ creditType: G1_CREDIT_TYPE, creditAmount: '100' }],
+  };
+
+  beforeEach(() => {
+    mockConfig = makeFakeConfig();
+    mockHistoryManager = {
+      addItem: vi.fn(),
+      history: [],
+      updateItem: vi.fn(),
+      clearItems: vi.fn(),
+      loadHistory: vi.fn(),
+    };
+    isDialogPending = { current: false };
+    mockSetOverageMenuRequest = vi.fn();
+    mockSetEmptyWalletRequest = vi.fn();
+    mockSetModelSwitchedFromQuotaError = vi.fn();
+
+    vi.spyOn(mockConfig, 'setQuotaErrorOccurred');
+    vi.spyOn(mockConfig, 'setOverageStrategy');
+
+    vi.mocked(getG1CreditBalance).mockReturnValue(100);
+    vi.mocked(shouldAutoUseCredits).mockReturnValue(false);
+    vi.mocked(shouldShowOverageMenu).mockReturnValue(false);
+    vi.mocked(shouldShowEmptyWalletMenu).mockReturnValue(false);
+  });
+
+  afterEach(() => {
+    vi.restoreAllMocks();
+  });
+
+  function makeArgs(
+    overrides?: Partial<Parameters<typeof handleCreditsFlow>[0]>,
+  ) {
+    return {
+      config: mockConfig,
+      paidTier: mockPaidTier,
+      overageStrategy: 'ask' as const,
+      failedModel: 'gemini-3-pro-preview',
+      fallbackModel: 'gemini-3-flash-preview',
+      usageLimitReachedModel: 'all Pro models',
+      resetTime: '3:45 PM',
+      historyManager: mockHistoryManager,
+      setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
+      isDialogPending,
+      setOverageMenuRequest: mockSetOverageMenuRequest,
+      setEmptyWalletRequest: mockSetEmptyWalletRequest,
+      ...overrides,
+    };
+  }
+
+  it('should return null if credit balance is null (non-G1 user)', async () => {
+    vi.mocked(getG1CreditBalance).mockReturnValue(null);
+    const result = await handleCreditsFlow(makeArgs());
+    expect(result).toBeNull();
+  });
+
+  it('should return null if credits are already auto-used (strategy=always)', async () => {
+    vi.mocked(shouldAutoUseCredits).mockReturnValue(true);
+    const result = await handleCreditsFlow(makeArgs());
+    expect(result).toBeNull();
+  });
+
+  it('should show overage menu and return retry_with_credits when use_credits selected', async () => {
+    vi.mocked(shouldShowOverageMenu).mockReturnValue(true);
+
+    const flowPromise = handleCreditsFlow(makeArgs());
+
+    // Extract the resolve callback from the setOverageMenuRequest call
+    expect(mockSetOverageMenuRequest).toHaveBeenCalledOnce();
+    const request = mockSetOverageMenuRequest.mock.calls[0][0];
+    expect(request.failedModel).toBe('all Pro models');
+    expect(request.creditBalance).toBe(100);
+
+    // Simulate user choosing 'use_credits'
+    request.resolve('use_credits');
+    const result = await flowPromise;
+
+    expect(result).toBe('retry_with_credits');
+    expect(mockConfig.setOverageStrategy).toHaveBeenCalledWith('always');
+    expect(logBillingEvent).toHaveBeenCalled();
+  });
+
+  it('should show overage menu and return retry_always when use_fallback selected', async () => {
+    vi.mocked(shouldShowOverageMenu).mockReturnValue(true);
+
+    const flowPromise = handleCreditsFlow(makeArgs());
+    const request = mockSetOverageMenuRequest.mock.calls[0][0];
+    request.resolve('use_fallback');
+    const result = await flowPromise;
+
+    expect(result).toBe('retry_always');
+  });
+
+  it('should show overage menu and return stop when stop selected', async () => {
+    vi.mocked(shouldShowOverageMenu).mockReturnValue(true);
+
+    const flowPromise = handleCreditsFlow(makeArgs());
+    const request = mockSetOverageMenuRequest.mock.calls[0][0];
+    request.resolve('stop');
+    const result = await flowPromise;
+
+    expect(result).toBe('stop');
+  });
+
+  it('should return stop immediately if dialog is already pending (overage)', async () => {
+    vi.mocked(shouldShowOverageMenu).mockReturnValue(true);
+    isDialogPending.current = true;
+
+    const result = await handleCreditsFlow(makeArgs());
+    expect(result).toBe('stop');
+    expect(mockSetOverageMenuRequest).not.toHaveBeenCalled();
+  });
+
+  it('should show empty wallet menu and return stop when get_credits selected', async () => {
+    vi.mocked(shouldShowEmptyWalletMenu).mockReturnValue(true);
+
+    const flowPromise = handleCreditsFlow(makeArgs());
+
+    expect(mockSetEmptyWalletRequest).toHaveBeenCalledOnce();
+    const request = mockSetEmptyWalletRequest.mock.calls[0][0];
+    expect(request.failedModel).toBe('all Pro models');
+
+    request.resolve('get_credits');
+    const result = await flowPromise;
+
+    expect(result).toBe('stop');
+    expect(mockHistoryManager.addItem).toHaveBeenCalledWith(
+      expect.objectContaining({
+        type: MessageType.INFO,
+        text: expect.stringContaining('few minutes'),
+      }),
+      expect.any(Number),
+    );
+  });
+
+  it('should show empty wallet menu and return retry_always when use_fallback selected', async () => {
+    vi.mocked(shouldShowEmptyWalletMenu).mockReturnValue(true);
+
+    const flowPromise = handleCreditsFlow(makeArgs());
+    const request = mockSetEmptyWalletRequest.mock.calls[0][0];
+    request.resolve('use_fallback');
+    const result = await flowPromise;
+
+    expect(result).toBe('retry_always');
+  });
+
+  it('should return stop immediately if dialog is already pending (empty wallet)', async () => {
+    vi.mocked(shouldShowEmptyWalletMenu).mockReturnValue(true);
+    isDialogPending.current = true;
+
+    const result = await handleCreditsFlow(makeArgs());
+    expect(result).toBe('stop');
+    expect(mockSetEmptyWalletRequest).not.toHaveBeenCalled();
+  });
+
+  it('should return null if no flow conditions are met', async () => {
+    vi.mocked(getG1CreditBalance).mockReturnValue(100);
+    vi.mocked(shouldAutoUseCredits).mockReturnValue(false);
+    vi.mocked(shouldShowOverageMenu).mockReturnValue(false);
+    vi.mocked(shouldShowEmptyWalletMenu).mockReturnValue(false);
+
+    const result = await handleCreditsFlow(makeArgs());
+    expect(result).toBeNull();
+  });
+
+  it('should clear dialog state after overage menu resolves', async () => {
+    vi.mocked(shouldShowOverageMenu).mockReturnValue(true);
+
+    const flowPromise = handleCreditsFlow(makeArgs());
+    expect(isDialogPending.current).toBe(true);
+
+    const request = mockSetOverageMenuRequest.mock.calls[0][0];
+    request.resolve('stop');
+    await flowPromise;
+
+    expect(isDialogPending.current).toBe(false);
+    // Verify null was set to clear the request
+    expect(mockSetOverageMenuRequest).toHaveBeenCalledWith(null);
+  });
+
+  it('should clear dialog state after empty wallet menu resolves', async () => {
+    vi.mocked(shouldShowEmptyWalletMenu).mockReturnValue(true);
+
+    const flowPromise = handleCreditsFlow(makeArgs());
+    expect(isDialogPending.current).toBe(true);
+
+    const request = mockSetEmptyWalletRequest.mock.calls[0][0];
+    request.resolve('stop');
+    await flowPromise;
+
+    expect(isDialogPending.current).toBe(false);
+    expect(mockSetEmptyWalletRequest).toHaveBeenCalledWith(null);
+  });
+});
diff --git a/packages/cli/src/ui/hooks/creditsFlowHandler.ts b/packages/cli/src/ui/hooks/creditsFlowHandler.ts
new file mode 100644
index 0000000000..497d4904e6
--- /dev/null
+++ b/packages/cli/src/ui/hooks/creditsFlowHandler.ts
@@ -0,0 +1,290 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import {
+  type Config,
+  type FallbackIntent,
+  type GeminiUserTier,
+  type OverageOption,
+  getG1CreditBalance,
+  shouldAutoUseCredits,
+  shouldShowOverageMenu,
+  shouldShowEmptyWalletMenu,
+  openBrowserSecurely,
+  logBillingEvent,
+  OverageMenuShownEvent,
+  OverageOptionSelectedEvent,
+  EmptyWalletMenuShownEvent,
+  CreditPurchaseClickEvent,
+  buildG1Url,
+  G1_UTM_CAMPAIGNS,
+  UserAccountManager,
+  recordOverageOptionSelected,
+  recordCreditPurchaseClick,
+} from '@google/gemini-cli-core';
+import { MessageType } from '../types.js';
+import type { UseHistoryManagerReturn } from './useHistoryManager.js';
+import type {
+  OverageMenuIntent,
+  EmptyWalletIntent,
+  EmptyWalletDialogRequest,
+} from '../contexts/UIStateContext.js';
+
+interface CreditsFlowArgs {
+  config: Config;
+  paidTier: GeminiUserTier;
+  overageStrategy: 'ask' | 'always' | 'never';
+  failedModel: string;
+  fallbackModel: string;
+  usageLimitReachedModel: string;
+  resetTime: string | undefined;
+  historyManager: UseHistoryManagerReturn;
+  setModelSwitchedFromQuotaError: (value: boolean) => void;
+  isDialogPending: React.MutableRefObject<boolean>;
+  setOverageMenuRequest: (
+    req: {
+      failedModel: string;
+      fallbackModel: string;
+      resetTime: string | undefined;
+      creditBalance: number;
+      resolve: (intent: OverageMenuIntent) => void;
+    } | null,
+  ) => void;
+  setEmptyWalletRequest: (req: EmptyWalletDialogRequest | null) => void;
+}
+
+/**
+ * Handles the G1 AI Credits flow when a quota error occurs.
+ * Returns a FallbackIntent if the credits flow handled the error,
+ * or null to fall through to the default ProQuotaDialog.
+ */
+export async function handleCreditsFlow(
+  args: CreditsFlowArgs,
+): Promise<FallbackIntent | null> {
+  const creditBalance = getG1CreditBalance(args.paidTier);
+
+  // creditBalance is null when user is not eligible for G1 credits.
+  if (creditBalance == null) {
+    return null;
+  }
+
+  const { overageStrategy } = args;
+
+  // If credits are already auto-enabled (strategy='always'), the request
+  // that just failed already included enabledCreditTypes — credits didn't
+  // help. Fall through to ProQuotaDialog which offers the Flash downgrade.
+  if (shouldAutoUseCredits(overageStrategy, creditBalance)) {
+    return null;
+  }
+
+  // Show overage menu when strategy is 'ask' and credits > 0
+  if (shouldShowOverageMenu(overageStrategy, creditBalance)) {
+    return handleOverageMenu(args, creditBalance);
+  }
+
+  // Show empty wallet when credits === 0 and strategy isn't 'never'
+  if (shouldShowEmptyWalletMenu(overageStrategy, creditBalance)) {
+    return handleEmptyWalletMenu(args);
+  }
+
+  return null;
+}
+
+// ---------------------------------------------------------------------------
+// Overage menu flow
+// ---------------------------------------------------------------------------
+
+async function handleOverageMenu(
+  args: CreditsFlowArgs,
+  creditBalance: number,
+): Promise<FallbackIntent> {
+  const {
+    config,
+    fallbackModel,
+    usageLimitReachedModel,
+    overageStrategy,
+    resetTime,
+    isDialogPending,
+    setOverageMenuRequest,
+    setModelSwitchedFromQuotaError,
+    historyManager,
+  } = args;
+
+  logBillingEvent(
+    config,
+    new OverageMenuShownEvent(
+      usageLimitReachedModel,
+      creditBalance,
+      overageStrategy,
+    ),
+  );
+
+  if (isDialogPending.current) {
+    return 'stop';
+  }
+  isDialogPending.current = true;
+
+  setModelSwitchedFromQuotaError(true);
+  config.setQuotaErrorOccurred(true);
+
+  const overageIntent = await new Promise<OverageMenuIntent>((resolve) => {
+    setOverageMenuRequest({
+      failedModel: usageLimitReachedModel,
+      fallbackModel,
+      resetTime,
+      creditBalance,
+      resolve,
+    });
+  });
+
+  setOverageMenuRequest(null);
+  isDialogPending.current = false;
+
+  logOverageOptionSelected(
+    config,
+    usageLimitReachedModel,
+    overageIntent,
+    creditBalance,
+  );
+
+  switch (overageIntent) {
+    case 'use_credits':
+      setModelSwitchedFromQuotaError(false);
+      config.setQuotaErrorOccurred(false);
+      config.setOverageStrategy('always');
+      historyManager.addItem(
+        {
+          type: MessageType.INFO,
+          text: `Using AI Credits for this request.`,
+        },
+        Date.now(),
+      );
+      return 'retry_with_credits';
+
+    case 'use_fallback':
+      return 'retry_always';
+
+    case 'manage':
+      logCreditPurchaseClick(config, 'manage', usageLimitReachedModel);
+      await openG1Url('activity', G1_UTM_CAMPAIGNS.MANAGE_ACTIVITY);
+      return 'stop';
+
+    case 'stop':
+    default:
+      return 'stop';
+  }
+}
+
+// ---------------------------------------------------------------------------
+// Empty wallet flow
+// ---------------------------------------------------------------------------
+
+async function handleEmptyWalletMenu(
+  args: CreditsFlowArgs,
+): Promise<FallbackIntent> {
+  const {
+    config,
+    fallbackModel,
+    usageLimitReachedModel,
+    resetTime,
+    isDialogPending,
+    setEmptyWalletRequest,
+    setModelSwitchedFromQuotaError,
+  } = args;
+
+  logBillingEvent(
+    config,
+    new EmptyWalletMenuShownEvent(usageLimitReachedModel),
+  );
+
+  if (isDialogPending.current) {
+    return 'stop';
+  }
+  isDialogPending.current = true;
+
+  setModelSwitchedFromQuotaError(true);
+  config.setQuotaErrorOccurred(true);
+
+  const emptyWalletIntent = await new Promise<EmptyWalletIntent>((resolve) => {
+    setEmptyWalletRequest({
+      failedModel: usageLimitReachedModel,
+      fallbackModel,
+      resetTime,
+      onGetCredits: () => {
+        logCreditPurchaseClick(
+          config,
+          'empty_wallet_menu',
+          usageLimitReachedModel,
+        );
+        void openG1Url('credits', G1_UTM_CAMPAIGNS.EMPTY_WALLET_ADD_CREDITS);
+      },
+      resolve,
+    });
+  });
+
+  setEmptyWalletRequest(null);
+  isDialogPending.current = false;
+
+  switch (emptyWalletIntent) {
+    case 'get_credits':
+      args.historyManager.addItem(
+        {
+          type: MessageType.INFO,
+          text: 'Newly purchased AI credits may take a few minutes to update. Run /stats to check your balance.',
+        },
+        Date.now(),
+      );
+      return 'stop';
+
+    case 'use_fallback':
+      return 'retry_always';
+
+    case 'stop':
+    default:
+      return 'stop';
+  }
+}
+
+// ---------------------------------------------------------------------------
+// Telemetry helpers
+// ---------------------------------------------------------------------------
+
+function logOverageOptionSelected(
+  config: Config,
+  model: string,
+  option: OverageOption,
+  creditBalance: number,
+): void {
+  logBillingEvent(
+    config,
+    new OverageOptionSelectedEvent(model, option, creditBalance),
+  );
+  recordOverageOptionSelected(config, {
+    selected_option: option,
+    model,
+  });
+}
+
+function logCreditPurchaseClick(
+  config: Config,
+  source: 'overage_menu' | 'empty_wallet_menu' | 'manage',
+  model: string,
+): void {
+  logBillingEvent(config, new CreditPurchaseClickEvent(source, model));
+  recordCreditPurchaseClick(config, { source, model });
+}
+
+async function openG1Url(
+  path: 'activity' | 'credits',
+  campaign: string,
+): Promise<void> {
+  try {
+    const userEmail = new UserAccountManager().getCachedGoogleAccount() ?? '';
+    await openBrowserSecurely(buildG1Url(path, userEmail, campaign));
+  } catch {
+    // Ignore browser open errors
+  }
+}
diff --git a/packages/cli/src/ui/hooks/shellCommandProcessor.ts b/packages/cli/src/ui/hooks/shellCommandProcessor.ts
index 3c85d3b6a4..364b395876 100644
--- a/packages/cli/src/ui/hooks/shellCommandProcessor.ts
+++ b/packages/cli/src/ui/hooks/shellCommandProcessor.ts
@@ -305,6 +305,7 @@ export const useShellCommandProcessor = (
           name: SHELL_COMMAND_NAME,
           description: rawQuery,
           status: CoreToolCallStatus.Executing,
+          isClientInitiated: true,
           resultDisplay: '',
           confirmationDetails: undefined,
         };
diff --git a/packages/cli/src/ui/hooks/slashCommandProcessor.ts b/packages/cli/src/ui/hooks/slashCommandProcessor.ts
index be8e313abe..c3f178ad1b 100644
--- a/packages/cli/src/ui/hooks/slashCommandProcessor.ts
+++ b/packages/cli/src/ui/hooks/slashCommandProcessor.ts
@@ -581,6 +581,7 @@ export const useSlashCommandProcessor = (
                       name: 'Expansion',
                       description: 'Command expansion needs shell access',
                       status: CoreToolCallStatus.AwaitingApproval,
+                      isClientInitiated: true,
                       resultDisplay: undefined,
                       confirmationDetails,
                     };
diff --git a/packages/cli/src/ui/hooks/toolMapping.test.ts b/packages/cli/src/ui/hooks/toolMapping.test.ts
index 16365f4420..3b4e942357 100644
--- a/packages/cli/src/ui/hooks/toolMapping.test.ts
+++ b/packages/cli/src/ui/hooks/toolMapping.test.ts
@@ -325,5 +325,33 @@ describe('toolMapping', () => {
       const result = mapToDisplay(toolCall);
       expect(result.tools[0].originalRequestName).toBe('original_tool');
     });
+
+    it('propagates isClientInitiated from tool request', () => {
+      const clientInitiatedTool: ScheduledToolCall = {
+        status: CoreToolCallStatus.Scheduled,
+        request: {
+          ...mockRequest,
+          callId: 'call-client',
+          isClientInitiated: true,
+        },
+        tool: mockTool,
+        invocation: mockInvocation,
+      };
+
+      const modelInitiatedTool: ScheduledToolCall = {
+        status: CoreToolCallStatus.Scheduled,
+        request: {
+          ...mockRequest,
+          callId: 'call-model',
+          isClientInitiated: false,
+        },
+        tool: mockTool,
+        invocation: mockInvocation,
+      };
+
+      const result = mapToDisplay([clientInitiatedTool, modelInitiatedTool]);
+      expect(result.tools[0].isClientInitiated).toBe(true);
+      expect(result.tools[1].isClientInitiated).toBe(false);
+    });
   });
 });
diff --git a/packages/cli/src/ui/hooks/toolMapping.ts b/packages/cli/src/ui/hooks/toolMapping.ts
index 5a9db194ff..db9df81566 100644
--- a/packages/cli/src/ui/hooks/toolMapping.ts
+++ b/packages/cli/src/ui/hooks/toolMapping.ts
@@ -101,6 +101,7 @@ export function mapToDisplay(
     return {
       ...baseDisplayProperties,
       status: call.status,
+      isClientInitiated: !!call.request.isClientInitiated,
       resultDisplay,
       confirmationDetails,
       outputFile,
diff --git a/packages/cli/src/ui/hooks/useCommandCompletion.test.tsx b/packages/cli/src/ui/hooks/useCommandCompletion.test.tsx
index c7bb2afb50..8f91013070 100644
--- a/packages/cli/src/ui/hooks/useCommandCompletion.test.tsx
+++ b/packages/cli/src/ui/hooks/useCommandCompletion.test.tsx
@@ -28,6 +28,7 @@ import type { UseAtCompletionProps } from './useAtCompletion.js';
 import { useAtCompletion } from './useAtCompletion.js';
 import type { UseSlashCompletionProps } from './useSlashCompletion.js';
 import { useSlashCompletion } from './useSlashCompletion.js';
+import { useShellCompletion } from './useShellCompletion.js';
 
 vi.mock('./useAtCompletion', () => ({
   useAtCompletion: vi.fn(),
@@ -40,29 +41,35 @@ vi.mock('./useSlashCompletion', () => ({
   })),
 }));
 
-vi.mock('./useShellCompletion', async () => {
-  const actual = await vi.importActual<
-    typeof import('./useShellCompletion.js')
-  >('./useShellCompletion');
-  return {
-    ...actual,
-    useShellCompletion: vi.fn(),
-  };
-});
+vi.mock('./useShellCompletion', () => ({
+  useShellCompletion: vi.fn(() => ({
+    completionStart: 0,
+    completionEnd: 0,
+    query: '',
+  })),
+}));
 
 // Helper to set up mocks in a consistent way for both child hooks
 const setupMocks = ({
   atSuggestions = [],
   slashSuggestions = [],
+  shellSuggestions = [],
   isLoading = false,
   isPerfectMatch = false,
   slashCompletionRange = { completionStart: 0, completionEnd: 0 },
+  shellCompletionRange = { completionStart: 0, completionEnd: 0, query: '' },
 }: {
   atSuggestions?: Suggestion[];
   slashSuggestions?: Suggestion[];
+  shellSuggestions?: Suggestion[];
   isLoading?: boolean;
   isPerfectMatch?: boolean;
   slashCompletionRange?: { completionStart: number; completionEnd: number };
+  shellCompletionRange?: {
+    completionStart: number;
+    completionEnd: number;
+    query: string;
+  };
 }) => {
   // Mock for @-completions
   (useAtCompletion as Mock).mockImplementation(
@@ -99,6 +106,19 @@ const setupMocks = ({
       return slashCompletionRange;
     },
   );
+
+  // Mock for shell completions
+  (useShellCompletion as Mock).mockImplementation(
+    ({ enabled, setSuggestions, setIsLoadingSuggestions }) => {
+      useEffect(() => {
+        if (enabled) {
+          setIsLoadingSuggestions(isLoading);
+          setSuggestions(shellSuggestions);
+        }
+      }, [enabled, setSuggestions, setIsLoadingSuggestions]);
+      return shellCompletionRange;
+    },
+  );
 };
 
 describe('useCommandCompletion', () => {
diff --git a/packages/cli/src/ui/hooks/useCommandCompletion.tsx b/packages/cli/src/ui/hooks/useCommandCompletion.tsx
index 097a1e63b3..f9b772bc93 100644
--- a/packages/cli/src/ui/hooks/useCommandCompletion.tsx
+++ b/packages/cli/src/ui/hooks/useCommandCompletion.tsx
@@ -13,7 +13,7 @@ import { isSlashCommand } from '../utils/commandUtils.js';
 import { toCodePoints } from '../utils/textUtils.js';
 import { useAtCompletion } from './useAtCompletion.js';
 import { useSlashCompletion } from './useSlashCompletion.js';
-import { useShellCompletion, getTokenAtCursor } from './useShellCompletion.js';
+import { useShellCompletion } from './useShellCompletion.js';
 import type { PromptCompletion } from './usePromptCompletion.js';
 import {
   usePromptCompletion,
@@ -103,40 +103,22 @@ export function useCommandCompletion({
 
   const {
     completionMode,
-    query,
+    query: memoQuery,
     completionStart,
     completionEnd,
-    shellTokenIsCommand,
-    shellTokens,
-    shellCursorIndex,
-    shellCommandToken,
   } = useMemo(() => {
     const currentLine = buffer.lines[cursorRow] || '';
     const codePoints = toCodePoints(currentLine);
 
     if (shellModeActive) {
-      const tokenInfo = getTokenAtCursor(currentLine, cursorCol);
-      if (tokenInfo) {
-        return {
-          completionMode: CompletionMode.SHELL,
-          query: tokenInfo.token,
-          completionStart: tokenInfo.start,
-          completionEnd: tokenInfo.end,
-          shellTokenIsCommand: tokenInfo.isFirstToken,
-          shellTokens: tokenInfo.tokens,
-          shellCursorIndex: tokenInfo.cursorIndex,
-          shellCommandToken: tokenInfo.commandToken,
-        };
-      }
       return {
-        completionMode: CompletionMode.SHELL,
+        completionMode:
+          currentLine.trim().length === 0
+            ? CompletionMode.IDLE
+            : CompletionMode.SHELL,
         query: '',
-        completionStart: cursorCol,
-        completionEnd: cursorCol,
-        shellTokenIsCommand: currentLine.trim().length === 0,
-        shellTokens: [''],
-        shellCursorIndex: 0,
-        shellCommandToken: '',
+        completionStart: -1,
+        completionEnd: -1,
       };
     }
 
@@ -176,10 +158,6 @@ export function useCommandCompletion({
           query: partialPath,
           completionStart: pathStart,
           completionEnd: end,
-          shellTokenIsCommand: false,
-          shellTokens: [],
-          shellCursorIndex: -1,
-          shellCommandToken: '',
         };
       }
     }
@@ -191,10 +169,6 @@ export function useCommandCompletion({
         query: currentLine,
         completionStart: 0,
         completionEnd: currentLine.length,
-        shellTokenIsCommand: false,
-        shellTokens: [],
-        shellCursorIndex: -1,
-        shellCommandToken: '',
       };
     }
 
@@ -212,10 +186,6 @@ export function useCommandCompletion({
         query: trimmedText,
         completionStart: 0,
         completionEnd: trimmedText.length,
-        shellTokenIsCommand: false,
-        shellTokens: [],
-        shellCursorIndex: -1,
-        shellCommandToken: '',
       };
     }
 
@@ -224,16 +194,12 @@ export function useCommandCompletion({
       query: null,
       completionStart: -1,
       completionEnd: -1,
-      shellTokenIsCommand: false,
-      shellTokens: [],
-      shellCursorIndex: -1,
-      shellCommandToken: '',
     };
   }, [cursorRow, cursorCol, buffer.lines, buffer.text, shellModeActive]);
 
   useAtCompletion({
     enabled: active && completionMode === CompletionMode.AT,
-    pattern: query || '',
+    pattern: memoQuery || '',
     config,
     cwd,
     setSuggestions,
@@ -243,7 +209,7 @@ export function useCommandCompletion({
   const slashCompletionRange = useSlashCompletion({
     enabled:
       active && completionMode === CompletionMode.SLASH && !shellModeActive,
-    query,
+    query: memoQuery,
     slashCommands,
     commandContext,
     setSuggestions,
@@ -251,18 +217,20 @@ export function useCommandCompletion({
     setIsPerfectMatch,
   });
 
-  useShellCompletion({
+  const shellCompletionRange = useShellCompletion({
     enabled: active && completionMode === CompletionMode.SHELL,
-    query: query || '',
-    isCommandPosition: shellTokenIsCommand,
-    tokens: shellTokens,
-    cursorIndex: shellCursorIndex,
-    commandToken: shellCommandToken,
+    line: buffer.lines[cursorRow] || '',
+    cursorCol,
     cwd,
     setSuggestions,
     setIsLoadingSuggestions,
   });
 
+  const query =
+    completionMode === CompletionMode.SHELL
+      ? shellCompletionRange.query
+      : memoQuery;
+
   const promptCompletion = usePromptCompletion({
     buffer,
   });
@@ -321,6 +289,9 @@ export function useCommandCompletion({
       if (completionMode === CompletionMode.SLASH) {
         start = slashCompletionRange.completionStart;
         end = slashCompletionRange.completionEnd;
+      } else if (completionMode === CompletionMode.SHELL) {
+        start = shellCompletionRange.completionStart;
+        end = shellCompletionRange.completionEnd;
       }
 
       if (start === -1 || end === -1) {
@@ -350,6 +321,7 @@ export function useCommandCompletion({
       completionStart,
       completionEnd,
       slashCompletionRange,
+      shellCompletionRange,
     ],
   );
 
@@ -370,6 +342,9 @@ export function useCommandCompletion({
       if (completionMode === CompletionMode.SLASH) {
         start = slashCompletionRange.completionStart;
         end = slashCompletionRange.completionEnd;
+      } else if (completionMode === CompletionMode.SHELL) {
+        start = shellCompletionRange.completionStart;
+        end = shellCompletionRange.completionEnd;
       }
 
       // Add space padding for Tab completion (auto-execute gets padding from getCompletedText)
@@ -408,6 +383,7 @@ export function useCommandCompletion({
       completionStart,
       completionEnd,
       slashCompletionRange,
+      shellCompletionRange,
       getCompletedText,
     ],
   );
diff --git a/packages/cli/src/ui/hooks/useGeminiStream.test.tsx b/packages/cli/src/ui/hooks/useGeminiStream.test.tsx
index eb7e029b95..df8c17bd23 100644
--- a/packages/cli/src/ui/hooks/useGeminiStream.test.tsx
+++ b/packages/cli/src/ui/hooks/useGeminiStream.test.tsx
@@ -335,7 +335,10 @@ describe('useGeminiStream', () => {
   });
 
   const mockLoadedSettings: LoadedSettings = {
-    merged: { preferredEditor: 'vscode' },
+    merged: {
+      preferredEditor: 'vscode',
+      ui: { errorVerbosity: 'full' },
+    },
     user: { path: '/user/settings.json', settings: {} },
     workspace: { path: '/workspace/.gemini/settings.json', settings: {} },
     errors: [],
@@ -346,6 +349,7 @@ describe('useGeminiStream', () => {
   const renderTestHook = (
     initialToolCalls: TrackedToolCall[] = [],
     geminiClient?: any,
+    loadedSettings: LoadedSettings = mockLoadedSettings,
   ) => {
     const client = geminiClient || mockConfig.getGeminiClient();
     let lastToolCalls = initialToolCalls;
@@ -360,7 +364,7 @@ describe('useGeminiStream', () => {
         cmd: PartListUnion,
       ) => Promise<SlashCommandProcessorResult | false>,
       shellModeActive: false,
-      loadedSettings: mockLoadedSettings,
+      loadedSettings,
       toolCalls: initialToolCalls,
     };
 
@@ -969,6 +973,93 @@ describe('useGeminiStream', () => {
       // Streaming state should be Idle
       expect(result.current.streamingState).toBe(StreamingState.Idle);
     });
+
+    const infoTexts = mockAddItem.mock.calls.map(
+      ([item]) => (item as { text?: string }).text ?? '',
+    );
+    expect(
+      infoTexts.some((text) =>
+        text.includes(
+          'Some internal tool attempts failed before this final error',
+        ),
+      ),
+    ).toBe(false);
+    expect(
+      infoTexts.some((text) =>
+        text.includes('This request failed. Press F12 for diagnostics'),
+      ),
+    ).toBe(false);
+  });
+
+  it('should add a compact suppressed-error note before STOP_EXECUTION terminal info in low verbosity mode', async () => {
+    const stopExecutionToolCalls: TrackedToolCall[] = [
+      {
+        request: {
+          callId: 'stop-call',
+          name: 'stopTool',
+          args: {},
+          isClientInitiated: false,
+          prompt_id: 'prompt-id-stop',
+        },
+        status: CoreToolCallStatus.Error,
+        response: {
+          callId: 'stop-call',
+          responseParts: [{ text: 'error occurred' }],
+          errorType: ToolErrorType.STOP_EXECUTION,
+          error: new Error('Stop reason from hook'),
+          resultDisplay: undefined,
+        },
+        responseSubmittedToGemini: false,
+        tool: {
+          displayName: 'stop tool',
+        },
+        invocation: {
+          getDescription: () => `Mock description`,
+        } as unknown as AnyToolInvocation,
+      } as unknown as TrackedCompletedToolCall,
+    ];
+    const lowVerbositySettings = {
+      ...mockLoadedSettings,
+      merged: {
+        ...mockLoadedSettings.merged,
+        ui: { errorVerbosity: 'low' },
+      },
+    } as LoadedSettings;
+    const client = new MockedGeminiClientClass(mockConfig);
+
+    const { result } = renderTestHook([], client, lowVerbositySettings);
+
+    await act(async () => {
+      if (capturedOnComplete) {
+        await capturedOnComplete(stopExecutionToolCalls);
+      }
+    });
+
+    await waitFor(() => {
+      expect(mockMarkToolsAsSubmitted).toHaveBeenCalledWith(['stop-call']);
+      expect(mockSendMessageStream).not.toHaveBeenCalled();
+      expect(result.current.streamingState).toBe(StreamingState.Idle);
+    });
+
+    const infoTexts = mockAddItem.mock.calls.map(
+      ([item]) => (item as { text?: string }).text ?? '',
+    );
+    const noteIndex = infoTexts.findIndex((text) =>
+      text.includes(
+        'Some internal tool attempts failed before this final error',
+      ),
+    );
+    const stopIndex = infoTexts.findIndex((text) =>
+      text.includes('Agent execution stopped: Stop reason from hook'),
+    );
+    const failureHintIndex = infoTexts.findIndex((text) =>
+      text.includes('This request failed. Press F12 for diagnostics'),
+    );
+    expect(noteIndex).toBeGreaterThanOrEqual(0);
+    expect(stopIndex).toBeGreaterThanOrEqual(0);
+    expect(failureHintIndex).toBeGreaterThanOrEqual(0);
+    expect(noteIndex).toBeLessThan(stopIndex);
+    expect(stopIndex).toBeLessThan(failureHintIndex);
   });
 
   it('should group multiple cancelled tool call responses into a single history entry', async () => {
diff --git a/packages/cli/src/ui/hooks/useGeminiStream.ts b/packages/cli/src/ui/hooks/useGeminiStream.ts
index 2a63d618e9..36374a5e20 100644
--- a/packages/cli/src/ui/hooks/useGeminiStream.ts
+++ b/packages/cli/src/ui/hooks/useGeminiStream.ts
@@ -107,6 +107,11 @@ enum StreamProcessingStatus {
   Error,
 }
 
+const SUPPRESSED_TOOL_ERRORS_NOTE =
+  'Some internal tool attempts failed before this final error. Press F12 for diagnostics, or set ui.errorVerbosity to full for full details.';
+const LOW_VERBOSITY_FAILURE_NOTE =
+  'This request failed. Press F12 for diagnostics, or set ui.errorVerbosity to full for full details.';
+
 function isShellToolData(data: unknown): data is ShellToolData {
   if (typeof data !== 'object' || data === null) {
     return false;
@@ -202,6 +207,10 @@ export const useGeminiStream = (
   const [retryStatus, setRetryStatus] = useState<RetryAttemptPayload | null>(
     null,
   );
+  const isLowErrorVerbosity = settings.merged.ui?.errorVerbosity !== 'full';
+  const suppressedToolErrorCountRef = useRef(0);
+  const suppressedToolErrorNoteShownRef = useRef(false);
+  const lowVerbosityFailureNoteShownRef = useRef(false);
   const abortControllerRef = useRef<AbortController | null>(null);
   const turnCancelledRef = useRef(false);
   const activeQueryIdRef = useRef<string | null>(null);
@@ -559,6 +568,51 @@ export const useGeminiStream = (
     }
   }, [isResponding]);
 
+  const maybeAddSuppressedToolErrorNote = useCallback(
+    (userMessageTimestamp?: number) => {
+      if (!isLowErrorVerbosity) {
+        return;
+      }
+      if (suppressedToolErrorCountRef.current === 0) {
+        return;
+      }
+      if (suppressedToolErrorNoteShownRef.current) {
+        return;
+      }
+
+      addItem(
+        {
+          type: MessageType.INFO,
+          text: SUPPRESSED_TOOL_ERRORS_NOTE,
+        },
+        userMessageTimestamp,
+      );
+      suppressedToolErrorNoteShownRef.current = true;
+    },
+    [addItem, isLowErrorVerbosity],
+  );
+
+  const maybeAddLowVerbosityFailureNote = useCallback(
+    (userMessageTimestamp?: number) => {
+      if (!isLowErrorVerbosity || config.getDebugMode()) {
+        return;
+      }
+      if (lowVerbosityFailureNoteShownRef.current) {
+        return;
+      }
+
+      addItem(
+        {
+          type: MessageType.INFO,
+          text: LOW_VERBOSITY_FAILURE_NOTE,
+        },
+        userMessageTimestamp,
+      );
+      lowVerbosityFailureNoteShownRef.current = true;
+    },
+    [addItem, config, isLowErrorVerbosity],
+  );
+
   const cancelOngoingRequest = useCallback(() => {
     if (
       streamingState !== StreamingState.Responding &&
@@ -908,6 +962,7 @@ export const useGeminiStream = (
         addItem(pendingHistoryItemRef.current, userMessageTimestamp);
         setPendingHistoryItem(null);
       }
+      maybeAddSuppressedToolErrorNote(userMessageTimestamp);
       addItem(
         {
           type: MessageType.ERROR,
@@ -921,9 +976,18 @@ export const useGeminiStream = (
         },
         userMessageTimestamp,
       );
+      maybeAddLowVerbosityFailureNote(userMessageTimestamp);
       setThought(null); // Reset thought when there's an error
     },
-    [addItem, pendingHistoryItemRef, setPendingHistoryItem, config, setThought],
+    [
+      addItem,
+      pendingHistoryItemRef,
+      setPendingHistoryItem,
+      config,
+      setThought,
+      maybeAddSuppressedToolErrorNote,
+      maybeAddLowVerbosityFailureNote,
+    ],
   );
 
   const handleCitationEvent = useCallback(
@@ -1086,6 +1150,7 @@ export const useGeminiStream = (
         },
         userMessageTimestamp,
       );
+      maybeAddLowVerbosityFailureNote(userMessageTimestamp);
       if (contextCleared) {
         addItem(
           {
@@ -1097,7 +1162,13 @@ export const useGeminiStream = (
       }
       setIsResponding(false);
     },
-    [addItem, pendingHistoryItemRef, setPendingHistoryItem, setIsResponding],
+    [
+      addItem,
+      pendingHistoryItemRef,
+      setPendingHistoryItem,
+      setIsResponding,
+      maybeAddLowVerbosityFailureNote,
+    ],
   );
 
   const handleAgentExecutionBlockedEvent = useCallback(
@@ -1118,6 +1189,7 @@ export const useGeminiStream = (
         },
         userMessageTimestamp,
       );
+      maybeAddLowVerbosityFailureNote(userMessageTimestamp);
       if (contextCleared) {
         addItem(
           {
@@ -1128,7 +1200,12 @@ export const useGeminiStream = (
         );
       }
     },
-    [addItem, pendingHistoryItemRef, setPendingHistoryItem],
+    [
+      addItem,
+      pendingHistoryItemRef,
+      setPendingHistoryItem,
+      maybeAddLowVerbosityFailureNote,
+    ],
   );
 
   const processGeminiStreamEvents = useCallback(
@@ -1286,6 +1363,9 @@ export const useGeminiStream = (
           if (!options?.isContinuation) {
             setModelSwitchedFromQuotaError(false);
             config.setQuotaErrorOccurred(false);
+            suppressedToolErrorCountRef.current = 0;
+            suppressedToolErrorNoteShownRef.current = false;
+            lowVerbosityFailureNoteShownRef.current = false;
           }
 
           abortControllerRef.current = new AbortController();
@@ -1402,6 +1482,7 @@ export const useGeminiStream = (
               ) {
                 // Error was handled by validation dialog, don't display again
               } else if (!isNodeError(error) || error.name !== 'AbortError') {
+                maybeAddSuppressedToolErrorNote(userMessageTimestamp);
                 addItem(
                   {
                     type: MessageType.ERROR,
@@ -1415,6 +1496,7 @@ export const useGeminiStream = (
                   },
                   userMessageTimestamp,
                 );
+                maybeAddLowVerbosityFailureNote(userMessageTimestamp);
               }
             } finally {
               if (activeQueryIdRef.current === queryId) {
@@ -1439,6 +1521,8 @@ export const useGeminiStream = (
       startNewPrompt,
       getPromptCount,
       setThought,
+      maybeAddSuppressedToolErrorNote,
+      maybeAddLowVerbosityFailureNote,
     ],
   );
 
@@ -1587,6 +1671,13 @@ export const useGeminiStream = (
         (t) => !t.request.isClientInitiated,
       );
 
+      if (isLowErrorVerbosity) {
+        // Low-mode suppression applies only to model-initiated tool failures.
+        suppressedToolErrorCountRef.current += geminiTools.filter(
+          (tc) => tc.status === CoreToolCallStatus.Error,
+        ).length;
+      }
+
       if (geminiTools.length === 0) {
         return;
       }
@@ -1597,10 +1688,12 @@ export const useGeminiStream = (
       );
 
       if (stopExecutionTool && stopExecutionTool.response.error) {
+        maybeAddSuppressedToolErrorNote();
         addItem({
           type: MessageType.INFO,
           text: `Agent execution stopped: ${stopExecutionTool.response.error.message}`,
         });
+        maybeAddLowVerbosityFailureNote();
         setIsResponding(false);
 
         const callIdsToMarkAsSubmitted = geminiTools.map(
@@ -1706,6 +1799,9 @@ export const useGeminiStream = (
       registerBackgroundShell,
       consumeUserHint,
       config,
+      isLowErrorVerbosity,
+      maybeAddSuppressedToolErrorNote,
+      maybeAddLowVerbosityFailureNote,
     ],
   );
 
diff --git a/packages/cli/src/ui/hooks/useLoadingIndicator.test.tsx b/packages/cli/src/ui/hooks/useLoadingIndicator.test.tsx
index 16ab6198ab..e0ae9b5f20 100644
--- a/packages/cli/src/ui/hooks/useLoadingIndicator.test.tsx
+++ b/packages/cli/src/ui/hooks/useLoadingIndicator.test.tsx
@@ -35,6 +35,7 @@ describe('useLoadingIndicator', () => {
     initialShouldShowFocusHint: boolean = false,
     initialRetryStatus: RetryAttemptPayload | null = null,
     loadingPhrasesMode: LoadingPhrasesMode = 'all',
+    initialErrorVerbosity: 'low' | 'full' = 'full',
   ) => {
     let hookResult: ReturnType<typeof useLoadingIndicator>;
     function TestComponent({
@@ -42,17 +43,20 @@ describe('useLoadingIndicator', () => {
       shouldShowFocusHint,
       retryStatus,
       mode,
+      errorVerbosity,
     }: {
       streamingState: StreamingState;
       shouldShowFocusHint?: boolean;
       retryStatus?: RetryAttemptPayload | null;
       mode?: LoadingPhrasesMode;
+      errorVerbosity?: 'low' | 'full';
     }) {
       hookResult = useLoadingIndicator({
         streamingState,
         shouldShowFocusHint: !!shouldShowFocusHint,
         retryStatus: retryStatus || null,
         loadingPhrasesMode: mode,
+        errorVerbosity,
       });
       return null;
     }
@@ -62,6 +66,7 @@ describe('useLoadingIndicator', () => {
         shouldShowFocusHint={initialShouldShowFocusHint}
         retryStatus={initialRetryStatus}
         mode={loadingPhrasesMode}
+        errorVerbosity={initialErrorVerbosity}
       />,
     );
     return {
@@ -75,7 +80,15 @@ describe('useLoadingIndicator', () => {
         shouldShowFocusHint?: boolean;
         retryStatus?: RetryAttemptPayload | null;
         mode?: LoadingPhrasesMode;
-      }) => rerender(<TestComponent mode={loadingPhrasesMode} {...newProps} />),
+        errorVerbosity?: 'low' | 'full';
+      }) =>
+        rerender(
+          <TestComponent
+            mode={loadingPhrasesMode}
+            errorVerbosity={initialErrorVerbosity}
+            {...newProps}
+          />,
+        ),
     };
   };
 
@@ -229,6 +242,46 @@ describe('useLoadingIndicator', () => {
     expect(result.current.currentLoadingPhrase).toContain('Attempt 3/3');
   });
 
+  it('should hide low-verbosity retry status for early retry attempts', () => {
+    const retryStatus = {
+      model: 'gemini-pro',
+      attempt: 1,
+      maxAttempts: 5,
+      delayMs: 1000,
+    };
+    const { result } = renderLoadingIndicatorHook(
+      StreamingState.Responding,
+      false,
+      retryStatus,
+      'all',
+      'low',
+    );
+
+    expect(result.current.currentLoadingPhrase).not.toBe(
+      "This is taking a bit longer, we're still on it.",
+    );
+  });
+
+  it('should show a generic retry phrase in low error verbosity mode for later retries', () => {
+    const retryStatus = {
+      model: 'gemini-pro',
+      attempt: 2,
+      maxAttempts: 5,
+      delayMs: 1000,
+    };
+    const { result } = renderLoadingIndicatorHook(
+      StreamingState.Responding,
+      false,
+      retryStatus,
+      'all',
+      'low',
+    );
+
+    expect(result.current.currentLoadingPhrase).toBe(
+      "This is taking a bit longer, we're still on it.",
+    );
+  });
+
   it('should show no phrases when loadingPhrasesMode is "off"', () => {
     const { result } = renderLoadingIndicatorHook(
       StreamingState.Responding,
diff --git a/packages/cli/src/ui/hooks/useLoadingIndicator.ts b/packages/cli/src/ui/hooks/useLoadingIndicator.ts
index b6c85da6b8..ee46589d12 100644
--- a/packages/cli/src/ui/hooks/useLoadingIndicator.ts
+++ b/packages/cli/src/ui/hooks/useLoadingIndicator.ts
@@ -14,12 +14,15 @@ import {
 } from '@google/gemini-cli-core';
 import type { LoadingPhrasesMode } from '../../config/settings.js';
 
+const LOW_VERBOSITY_RETRY_HINT_ATTEMPT_THRESHOLD = 2;
+
 export interface UseLoadingIndicatorProps {
   streamingState: StreamingState;
   shouldShowFocusHint: boolean;
   retryStatus: RetryAttemptPayload | null;
   loadingPhrasesMode?: LoadingPhrasesMode;
   customWittyPhrases?: string[];
+  errorVerbosity?: 'low' | 'full';
 }
 
 export const useLoadingIndicator = ({
@@ -28,6 +31,7 @@ export const useLoadingIndicator = ({
   retryStatus,
   loadingPhrasesMode,
   customWittyPhrases,
+  errorVerbosity = 'full',
 }: UseLoadingIndicatorProps) => {
   const [timerResetKey, setTimerResetKey] = useState(0);
   const isTimerActive = streamingState === StreamingState.Responding;
@@ -70,7 +74,11 @@ export const useLoadingIndicator = ({
   }, [streamingState, elapsedTimeFromTimer]);
 
   const retryPhrase = retryStatus
-    ? `Trying to reach ${getDisplayString(retryStatus.model)} (Attempt ${retryStatus.attempt + 1}/${retryStatus.maxAttempts})`
+    ? errorVerbosity === 'low'
+      ? retryStatus.attempt >= LOW_VERBOSITY_RETRY_HINT_ATTEMPT_THRESHOLD
+        ? "This is taking a bit longer, we're still on it."
+        : null
+      : `Trying to reach ${getDisplayString(retryStatus.model)} (Attempt ${retryStatus.attempt + 1}/${retryStatus.maxAttempts})`
     : null;
 
   return {
diff --git a/packages/cli/src/ui/hooks/usePrivacySettings.ts b/packages/cli/src/ui/hooks/usePrivacySettings.ts
index 64a9673812..7bf5a5ff1b 100644
--- a/packages/cli/src/ui/hooks/usePrivacySettings.ts
+++ b/packages/cli/src/ui/hooks/usePrivacySettings.ts
@@ -10,6 +10,7 @@ import {
   type CodeAssistServer,
   UserTierId,
   getCodeAssistServer,
+  debugLogger,
 } from '@google/gemini-cli-core';
 
 export interface PrivacyState {
@@ -103,7 +104,12 @@ async function getRemoteDataCollectionOptIn(
 ): Promise<boolean> {
   try {
     const resp = await server.getCodeAssistGlobalUserSetting();
-    return resp.freeTierDataCollectionOptin;
+    if (resp.freeTierDataCollectionOptin === undefined) {
+      debugLogger.warn(
+        'Warning: Code Assist API did not return freeTierDataCollectionOptin. Defaulting to true.',
+      );
+    }
+    return resp.freeTierDataCollectionOptin ?? true;
   } catch (error: unknown) {
     if (error && typeof error === 'object' && 'response' in error) {
       // eslint-disable-next-line @typescript-eslint/no-unsafe-type-assertion
@@ -128,5 +134,10 @@ async function setRemoteDataCollectionOptIn(
     cloudaicompanionProject: server.projectId,
     freeTierDataCollectionOptin: optIn,
   });
-  return resp.freeTierDataCollectionOptin;
+  if (resp.freeTierDataCollectionOptin === undefined) {
+    debugLogger.warn(
+      `Warning: Code Assist API did not return freeTierDataCollectionOptin. Defaulting to ${optIn}.`,
+    );
+  }
+  return resp.freeTierDataCollectionOptin ?? optIn;
 }
diff --git a/packages/cli/src/ui/hooks/useQuotaAndFallback.test.ts b/packages/cli/src/ui/hooks/useQuotaAndFallback.test.ts
index 2272de5bf9..ea4234bd10 100644
--- a/packages/cli/src/ui/hooks/useQuotaAndFallback.test.ts
+++ b/packages/cli/src/ui/hooks/useQuotaAndFallback.test.ts
@@ -14,7 +14,8 @@ import {
   type Mock,
 } from 'vitest';
 import { act } from 'react';
-import { renderHook } from '../../test-utils/render.js';
+import { renderHook, mockSettings } from '../../test-utils/render.js';
+import { waitFor } from '../../test-utils/async.js';
 import {
   type Config,
   type FallbackModelHandler,
@@ -29,6 +30,12 @@ import {
   ModelNotFoundError,
   DEFAULT_GEMINI_MODEL,
   DEFAULT_GEMINI_FLASH_MODEL,
+  getG1CreditBalance,
+  shouldAutoUseCredits,
+  shouldShowOverageMenu,
+  shouldShowEmptyWalletMenu,
+  logBillingEvent,
+  G1_CREDIT_TYPE,
 } from '@google/gemini-cli-core';
 import { useQuotaAndFallback } from './useQuotaAndFallback.js';
 import type { UseHistoryManagerReturn } from './useHistoryManager.js';
@@ -37,6 +44,19 @@ import { MessageType } from '../types.js';
 // Use a type alias for SpyInstance as it's not directly exported
 type SpyInstance = ReturnType<typeof vi.spyOn>;
 
+vi.mock('@google/gemini-cli-core', async (importOriginal) => {
+  const actual =
+    await importOriginal<typeof import('@google/gemini-cli-core')>();
+  return {
+    ...actual,
+    getG1CreditBalance: vi.fn(),
+    shouldAutoUseCredits: vi.fn(),
+    shouldShowOverageMenu: vi.fn(),
+    shouldShowEmptyWalletMenu: vi.fn(),
+    logBillingEvent: vi.fn(),
+  };
+});
+
 describe('useQuotaAndFallback', () => {
   let mockConfig: Config;
   let mockHistoryManager: UseHistoryManagerReturn;
@@ -74,10 +94,16 @@ describe('useQuotaAndFallback', () => {
     vi.spyOn(mockConfig, 'setModel');
     vi.spyOn(mockConfig, 'setActiveModel');
     vi.spyOn(mockConfig, 'activateFallbackMode');
+
+    // Mock billing utility functions
+    vi.mocked(getG1CreditBalance).mockReturnValue(0);
+    vi.mocked(shouldAutoUseCredits).mockReturnValue(false);
+    vi.mocked(shouldShowOverageMenu).mockReturnValue(false);
+    vi.mocked(shouldShowEmptyWalletMenu).mockReturnValue(false);
   });
 
   afterEach(() => {
-    vi.clearAllMocks();
+    vi.restoreAllMocks();
   });
 
   it('should register a fallback handler on initialization', () => {
@@ -88,6 +114,8 @@ describe('useQuotaAndFallback', () => {
         userTier: UserTierId.FREE,
         setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
         onShowAuthSelection: mockOnShowAuthSelection,
+        paidTier: null,
+        settings: mockSettings,
       }),
     );
 
@@ -109,6 +137,8 @@ describe('useQuotaAndFallback', () => {
           userTier: UserTierId.FREE,
           setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
           onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: null,
+          settings: mockSettings,
         }),
       );
 
@@ -131,6 +161,67 @@ describe('useQuotaAndFallback', () => {
       );
     });
 
+    it('should auto-retry transient capacity failures in low verbosity mode', async () => {
+      const { result } = renderHook(() =>
+        useQuotaAndFallback({
+          config: mockConfig,
+          historyManager: mockHistoryManager,
+          userTier: UserTierId.FREE,
+          setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
+          onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: null,
+          settings: mockSettings,
+          errorVerbosity: 'low',
+        }),
+      );
+
+      const handler = setFallbackHandlerSpy.mock
+        .calls[0][0] as FallbackModelHandler;
+      const intent = await handler(
+        'gemini-pro',
+        'gemini-flash',
+        new RetryableQuotaError('retryable quota', mockGoogleApiError, 5),
+      );
+
+      expect(intent).toBe('retry_once');
+      expect(result.current.proQuotaRequest).toBeNull();
+      expect(mockSetModelSwitchedFromQuotaError).not.toHaveBeenCalledWith(true);
+      expect(mockConfig.setQuotaErrorOccurred).not.toHaveBeenCalledWith(true);
+    });
+
+    it('should still prompt for terminal quota in low verbosity mode', async () => {
+      const { result } = renderHook(() =>
+        useQuotaAndFallback({
+          config: mockConfig,
+          historyManager: mockHistoryManager,
+          userTier: UserTierId.FREE,
+          setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
+          onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: null,
+          settings: mockSettings,
+          errorVerbosity: 'low',
+        }),
+      );
+
+      const handler = setFallbackHandlerSpy.mock
+        .calls[0][0] as FallbackModelHandler;
+      let promise: Promise<FallbackIntent | null>;
+      act(() => {
+        promise = handler(
+          'gemini-pro',
+          'gemini-flash',
+          new TerminalQuotaError('pro quota', mockGoogleApiError),
+        );
+      });
+
+      expect(result.current.proQuotaRequest).not.toBeNull();
+
+      act(() => {
+        result.current.handleProQuotaChoice('retry_later');
+      });
+      await promise!;
+    });
+
     describe('Interactive Fallback', () => {
       it('should set an interactive request for a terminal quota error', async () => {
         const { result } = renderHook(() =>
@@ -140,6 +231,8 @@ describe('useQuotaAndFallback', () => {
             userTier: UserTierId.FREE,
             setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
             onShowAuthSelection: mockOnShowAuthSelection,
+            paidTier: null,
+            settings: mockSettings,
           }),
         );
 
@@ -193,6 +286,8 @@ describe('useQuotaAndFallback', () => {
             userTier: UserTierId.FREE,
             setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
             onShowAuthSelection: mockOnShowAuthSelection,
+            paidTier: null,
+            settings: mockSettings,
           }),
         );
 
@@ -232,6 +327,8 @@ describe('useQuotaAndFallback', () => {
             userTier: UserTierId.FREE,
             setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
             onShowAuthSelection: mockOnShowAuthSelection,
+            paidTier: null,
+            settings: mockSettings,
           }),
         );
 
@@ -264,6 +361,8 @@ describe('useQuotaAndFallback', () => {
             userTier: UserTierId.FREE,
             setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
             onShowAuthSelection: mockOnShowAuthSelection,
+            paidTier: null,
+            settings: mockSettings,
           }),
         );
 
@@ -330,6 +429,8 @@ describe('useQuotaAndFallback', () => {
               setModelSwitchedFromQuotaError:
                 mockSetModelSwitchedFromQuotaError,
               onShowAuthSelection: mockOnShowAuthSelection,
+              paidTier: null,
+              settings: mockSettings,
             }),
           );
 
@@ -385,6 +486,8 @@ describe('useQuotaAndFallback', () => {
             userTier: UserTierId.FREE,
             setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
             onShowAuthSelection: mockOnShowAuthSelection,
+            paidTier: null,
+            settings: mockSettings,
           }),
         );
 
@@ -430,6 +533,8 @@ Your admin might have disabled the access. Contact them to enable the Preview Re
             userTier: UserTierId.FREE,
             setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
             onShowAuthSelection: mockOnShowAuthSelection,
+            paidTier: null,
+            settings: mockSettings,
           }),
         );
 
@@ -464,6 +569,243 @@ Your admin might have disabled the access. Contact them to enable the Preview Re
     });
   });
 
+  describe('G1 AI Credits Flow', () => {
+    const mockPaidTier = {
+      id: UserTierId.STANDARD,
+      userTier: UserTierId.STANDARD,
+      availableCredits: [
+        {
+          creditType: G1_CREDIT_TYPE,
+          creditAmount: '100',
+        },
+      ],
+    };
+
+    beforeEach(() => {
+      // Default to having credits
+      vi.mocked(getG1CreditBalance).mockReturnValue(100);
+    });
+
+    it('should fall through to ProQuotaDialog if credits are already active (strategy=always)', async () => {
+      // If shouldAutoUseCredits is true, credits were already active on the
+      // failed request — they didn't help. Fall through to ProQuotaDialog
+      // so the user can downgrade to Flash instead of retrying infinitely.
+      vi.mocked(shouldAutoUseCredits).mockReturnValue(true);
+
+      const { result } = renderHook(() =>
+        useQuotaAndFallback({
+          config: mockConfig,
+          historyManager: mockHistoryManager,
+          userTier: UserTierId.STANDARD,
+          setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
+          onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: mockPaidTier,
+          settings: mockSettings,
+        }),
+      );
+
+      const handler = setFallbackHandlerSpy.mock
+        .calls[0][0] as FallbackModelHandler;
+
+      const error = new TerminalQuotaError(
+        'pro quota',
+        mockGoogleApiError,
+        1000 * 60 * 5,
+      );
+
+      const intentPromise = handler(
+        PREVIEW_GEMINI_MODEL,
+        'gemini-flash',
+        error,
+      );
+
+      // Since credits didn't help, the ProQuotaDialog should be shown
+      await waitFor(() => {
+        expect(result.current.proQuotaRequest).not.toBeNull();
+      });
+
+      // Resolve it to verify the flow completes
+      act(() => {
+        result.current.handleProQuotaChoice('stop');
+      });
+
+      const intent = await intentPromise;
+      expect(intent).toBe('stop');
+    });
+
+    it('should show overage menu if balance > 0 and not auto-using', async () => {
+      vi.mocked(shouldAutoUseCredits).mockReturnValue(false);
+      vi.mocked(shouldShowOverageMenu).mockReturnValue(true);
+
+      const { result } = renderHook(() =>
+        useQuotaAndFallback({
+          config: mockConfig,
+          historyManager: mockHistoryManager,
+          userTier: UserTierId.STANDARD,
+          setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
+          onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: mockPaidTier,
+          settings: mockSettings,
+        }),
+      );
+
+      const handler = setFallbackHandlerSpy.mock
+        .calls[0][0] as FallbackModelHandler;
+
+      let promise: Promise<FallbackIntent | null>;
+      act(() => {
+        promise = handler(
+          PREVIEW_GEMINI_MODEL,
+          'gemini-flash',
+          new TerminalQuotaError('pro quota', mockGoogleApiError),
+        );
+      });
+
+      expect(result.current.overageMenuRequest).not.toBeNull();
+      expect(result.current.overageMenuRequest?.creditBalance).toBe(100);
+      expect(logBillingEvent).toHaveBeenCalled();
+
+      // Simulate choosing "Use Credits"
+      await act(async () => {
+        result.current.handleOverageMenuChoice('use_credits');
+        await promise!;
+      });
+
+      const intent = await promise!;
+      expect(intent).toBe('retry_with_credits');
+    });
+
+    it('should handle use_fallback from overage menu', async () => {
+      vi.mocked(shouldAutoUseCredits).mockReturnValue(false);
+      vi.mocked(shouldShowOverageMenu).mockReturnValue(true);
+
+      const { result } = renderHook(() =>
+        useQuotaAndFallback({
+          config: mockConfig,
+          historyManager: mockHistoryManager,
+          userTier: UserTierId.STANDARD,
+          setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
+          onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: mockPaidTier,
+          settings: mockSettings,
+        }),
+      );
+
+      const handler = setFallbackHandlerSpy.mock
+        .calls[0][0] as FallbackModelHandler;
+
+      let promise: Promise<FallbackIntent | null>;
+      act(() => {
+        promise = handler(
+          PREVIEW_GEMINI_MODEL,
+          'gemini-flash',
+          new TerminalQuotaError('pro quota', mockGoogleApiError),
+        );
+      });
+
+      // Simulate choosing "Switch to fallback"
+      await act(async () => {
+        result.current.handleOverageMenuChoice('use_fallback');
+        await promise!;
+      });
+
+      const intent = await promise!;
+      expect(intent).toBe('retry_always');
+    });
+
+    it('should show empty wallet menu if balance is 0', async () => {
+      vi.mocked(getG1CreditBalance).mockReturnValue(0);
+      vi.mocked(shouldAutoUseCredits).mockReturnValue(false);
+      vi.mocked(shouldShowOverageMenu).mockReturnValue(false);
+      vi.mocked(shouldShowEmptyWalletMenu).mockReturnValue(true);
+
+      const { result } = renderHook(() =>
+        useQuotaAndFallback({
+          config: mockConfig,
+          historyManager: mockHistoryManager,
+          userTier: UserTierId.STANDARD,
+          setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
+          onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: { ...mockPaidTier, availableCredits: [] },
+          settings: mockSettings,
+        }),
+      );
+
+      const handler = setFallbackHandlerSpy.mock
+        .calls[0][0] as FallbackModelHandler;
+
+      let promise: Promise<FallbackIntent | null>;
+      act(() => {
+        promise = handler(
+          PREVIEW_GEMINI_MODEL,
+          'gemini-flash',
+          new TerminalQuotaError('pro quota', mockGoogleApiError),
+        );
+      });
+
+      expect(result.current.emptyWalletRequest).not.toBeNull();
+      expect(logBillingEvent).toHaveBeenCalled();
+
+      // Simulate choosing "Stop"
+      await act(async () => {
+        result.current.handleEmptyWalletChoice('stop');
+        await promise!;
+      });
+
+      const intent = await promise!;
+      expect(intent).toBe('stop');
+    });
+
+    it('should add info message to history when get_credits is selected', async () => {
+      vi.mocked(getG1CreditBalance).mockReturnValue(0);
+      vi.mocked(shouldAutoUseCredits).mockReturnValue(false);
+      vi.mocked(shouldShowOverageMenu).mockReturnValue(false);
+      vi.mocked(shouldShowEmptyWalletMenu).mockReturnValue(true);
+
+      const { result } = renderHook(() =>
+        useQuotaAndFallback({
+          config: mockConfig,
+          historyManager: mockHistoryManager,
+          userTier: UserTierId.STANDARD,
+          setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
+          onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: { ...mockPaidTier, availableCredits: [] },
+          settings: mockSettings,
+        }),
+      );
+
+      const handler = setFallbackHandlerSpy.mock
+        .calls[0][0] as FallbackModelHandler;
+
+      let promise: Promise<FallbackIntent | null>;
+      act(() => {
+        promise = handler(
+          PREVIEW_GEMINI_MODEL,
+          'gemini-flash',
+          new TerminalQuotaError('pro quota', mockGoogleApiError),
+        );
+      });
+
+      expect(result.current.emptyWalletRequest).not.toBeNull();
+
+      // Simulate choosing "Get AI Credits"
+      await act(async () => {
+        result.current.handleEmptyWalletChoice('get_credits');
+        await promise!;
+      });
+
+      const intent = await promise!;
+      expect(intent).toBe('stop');
+      expect(mockHistoryManager.addItem).toHaveBeenCalledWith(
+        expect.objectContaining({
+          type: MessageType.INFO,
+          text: expect.stringContaining('few minutes'),
+        }),
+        expect.any(Number),
+      );
+    });
+  });
+
   describe('handleProQuotaChoice', () => {
     it('should do nothing if there is no pending pro quota request', () => {
       const { result } = renderHook(() =>
@@ -473,6 +815,8 @@ Your admin might have disabled the access. Contact them to enable the Preview Re
           userTier: UserTierId.FREE,
           setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
           onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: null,
+          settings: mockSettings,
         }),
       );
 
@@ -491,6 +835,8 @@ Your admin might have disabled the access. Contact them to enable the Preview Re
           userTier: UserTierId.FREE,
           setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
           onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: null,
+          settings: mockSettings,
         }),
       );
 
@@ -522,6 +868,8 @@ Your admin might have disabled the access. Contact them to enable the Preview Re
           userTier: UserTierId.FREE,
           setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
           onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: null,
+          settings: mockSettings,
         }),
       );
 
@@ -566,6 +914,8 @@ Your admin might have disabled the access. Contact them to enable the Preview Re
           userTier: UserTierId.FREE,
           setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
           onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: null,
+          settings: mockSettings,
         }),
       );
 
@@ -602,6 +952,8 @@ Your admin might have disabled the access. Contact them to enable the Preview Re
           userTier: UserTierId.FREE,
           setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
           onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: null,
+          settings: mockSettings,
         }),
       );
 
@@ -646,6 +998,8 @@ Your admin might have disabled the access. Contact them to enable the Preview Re
           userTier: UserTierId.FREE,
           setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
           onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: null,
+          settings: mockSettings,
         }),
       );
 
@@ -661,6 +1015,8 @@ Your admin might have disabled the access. Contact them to enable the Preview Re
           userTier: UserTierId.FREE,
           setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
           onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: null,
+          settings: mockSettings,
         }),
       );
 
@@ -703,6 +1059,8 @@ Your admin might have disabled the access. Contact them to enable the Preview Re
           userTier: UserTierId.FREE,
           setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
           onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: null,
+          settings: mockSettings,
         }),
       );
 
@@ -745,6 +1103,8 @@ Your admin might have disabled the access. Contact them to enable the Preview Re
           userTier: UserTierId.FREE,
           setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
           onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: null,
+          settings: mockSettings,
         }),
       );
 
@@ -775,6 +1135,8 @@ Your admin might have disabled the access. Contact them to enable the Preview Re
           userTier: UserTierId.FREE,
           setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
           onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: null,
+          settings: mockSettings,
         }),
       );
 
@@ -805,6 +1167,8 @@ Your admin might have disabled the access. Contact them to enable the Preview Re
           userTier: UserTierId.FREE,
           setModelSwitchedFromQuotaError: mockSetModelSwitchedFromQuotaError,
           onShowAuthSelection: mockOnShowAuthSelection,
+          paidTier: null,
+          settings: mockSettings,
         }),
       );
 
diff --git a/packages/cli/src/ui/hooks/useQuotaAndFallback.ts b/packages/cli/src/ui/hooks/useQuotaAndFallback.ts
index a9e2b0c867..40b1f68926 100644
--- a/packages/cli/src/ui/hooks/useQuotaAndFallback.ts
+++ b/packages/cli/src/ui/hooks/useQuotaAndFallback.ts
@@ -16,7 +16,9 @@ import {
   type UserTierId,
   VALID_GEMINI_MODELS,
   isProModel,
+  isOverageEligibleModel,
   getDisplayString,
+  type GeminiUserTier,
 } from '@google/gemini-cli-core';
 import { useCallback, useEffect, useRef, useState } from 'react';
 import { type UseHistoryManagerReturn } from './useHistoryManager.js';
@@ -24,30 +26,55 @@ import { MessageType } from '../types.js';
 import {
   type ProQuotaDialogRequest,
   type ValidationDialogRequest,
+  type OverageMenuDialogRequest,
+  type OverageMenuIntent,
+  type EmptyWalletDialogRequest,
+  type EmptyWalletIntent,
 } from '../contexts/UIStateContext.js';
+import type { LoadedSettings } from '../../config/settings.js';
+import { handleCreditsFlow } from './creditsFlowHandler.js';
 
 interface UseQuotaAndFallbackArgs {
   config: Config;
   historyManager: UseHistoryManagerReturn;
   userTier: UserTierId | undefined;
+  paidTier: GeminiUserTier | null | undefined;
+  settings: LoadedSettings;
   setModelSwitchedFromQuotaError: (value: boolean) => void;
   onShowAuthSelection: () => void;
+  errorVerbosity?: 'low' | 'full';
 }
 
 export function useQuotaAndFallback({
   config,
   historyManager,
   userTier,
+  paidTier,
+  settings,
   setModelSwitchedFromQuotaError,
   onShowAuthSelection,
+  errorVerbosity = 'full',
 }: UseQuotaAndFallbackArgs) {
   const [proQuotaRequest, setProQuotaRequest] =
     useState<ProQuotaDialogRequest | null>(null);
   const [validationRequest, setValidationRequest] =
     useState<ValidationDialogRequest | null>(null);
+  // G1 AI Credits dialog states
+  const [overageMenuRequest, setOverageMenuRequest] =
+    useState<OverageMenuDialogRequest | null>(null);
+  const [emptyWalletRequest, setEmptyWalletRequest] =
+    useState<EmptyWalletDialogRequest | null>(null);
   const isDialogPending = useRef(false);
   const isValidationPending = useRef(false);
 
+  // Initial overage strategy from settings; runtime value read from config at call time.
+  const initialOverageStrategy =
+    (settings.merged.billing?.overageStrategy as
+      | 'ask'
+      | 'always'
+      | 'never'
+      | undefined) ?? 'ask';
+
   // Set up Flash fallback handler
   useEffect(() => {
     const fallbackHandler: FallbackModelHandler = async (
@@ -63,12 +90,52 @@ export function useQuotaAndFallback({
       const usageLimitReachedModel = isProModel(failedModel)
         ? 'all Pro models'
         : failedModel;
+
       if (error instanceof TerminalQuotaError) {
         isTerminalQuotaError = true;
-        // Common part of the message for both tiers
+
+        const isInsufficientCredits = error.isInsufficientCredits;
+
+        // G1 Credits Flow: Only apply if user has a tier that supports credits
+        // (paidTier?.availableCredits indicates the user is a G1 subscriber)
+        // Skip if the error explicitly says they have insufficient credits (e.g. they
+        // just exhausted them or zero balance cache is delayed).
+        if (
+          !isInsufficientCredits &&
+          paidTier?.availableCredits &&
+          isOverageEligibleModel(failedModel)
+        ) {
+          const resetTime = error.retryDelayMs
+            ? getResetTimeMessage(error.retryDelayMs)
+            : undefined;
+
+          const overageStrategy =
+            config.getBillingSettings().overageStrategy ??
+            initialOverageStrategy;
+
+          const creditsResult = await handleCreditsFlow({
+            config,
+            paidTier,
+            overageStrategy,
+            failedModel,
+            fallbackModel,
+            usageLimitReachedModel,
+            resetTime,
+            historyManager,
+            setModelSwitchedFromQuotaError,
+            isDialogPending,
+            setOverageMenuRequest,
+            setEmptyWalletRequest,
+          });
+          if (creditsResult) return creditsResult;
+        }
+
+        // Default: Show existing ProQuotaDialog (for overageStrategy: 'never' or non-G1 users)
         const messageLines = [
           `Usage limit reached for ${usageLimitReachedModel}.`,
-          error.retryDelayMs ? getResetTimeMessage(error.retryDelayMs) : null,
+          error.retryDelayMs
+            ? `Access resets at ${getResetTimeMessage(error.retryDelayMs)}.`
+            : null,
           `/stats model for usage details`,
           `/model to switch models.`,
           contentGeneratorConfig?.authType === AuthType.LOGIN_WITH_GOOGLE
@@ -100,6 +167,16 @@ export function useQuotaAndFallback({
         message = messageLines.join('\n');
       }
 
+      // In low verbosity mode, auto-retry transient capacity failures
+      // without interrupting with a dialog.
+      if (
+        errorVerbosity === 'low' &&
+        !isTerminalQuotaError &&
+        !isModelNotFoundError
+      ) {
+        return 'retry_once';
+      }
+
       setModelSwitchedFromQuotaError(true);
       config.setQuotaErrorOccurred(true);
 
@@ -126,7 +203,17 @@ export function useQuotaAndFallback({
     };
 
     config.setFallbackModelHandler(fallbackHandler);
-  }, [config, historyManager, userTier, setModelSwitchedFromQuotaError]);
+  }, [
+    config,
+    historyManager,
+    userTier,
+    paidTier,
+    settings,
+    initialOverageStrategy,
+    setModelSwitchedFromQuotaError,
+    onShowAuthSelection,
+    errorVerbosity,
+  ]);
 
   // Set up validation handler for 403 VALIDATION_REQUIRED errors
   useEffect(() => {
@@ -204,11 +291,38 @@ export function useQuotaAndFallback({
     [validationRequest, onShowAuthSelection],
   );
 
+  // Handler for overage menu dialog (G1 AI Credits flow)
+  const handleOverageMenuChoice = useCallback(
+    (choice: OverageMenuIntent) => {
+      if (!overageMenuRequest) return;
+
+      overageMenuRequest.resolve(choice);
+      // State will be cleared by the effect callback after the promise resolves
+    },
+    [overageMenuRequest],
+  );
+
+  // Handler for empty wallet dialog (G1 AI Credits flow)
+  const handleEmptyWalletChoice = useCallback(
+    (choice: EmptyWalletIntent) => {
+      if (!emptyWalletRequest) return;
+
+      emptyWalletRequest.resolve(choice);
+      // State will be cleared by the effect callback after the promise resolves
+    },
+    [emptyWalletRequest],
+  );
+
   return {
     proQuotaRequest,
     handleProQuotaChoice,
     validationRequest,
     handleValidationChoice,
+    // G1 AI Credits
+    overageMenuRequest,
+    handleOverageMenuChoice,
+    emptyWalletRequest,
+    handleEmptyWalletChoice,
   };
 }
 
@@ -221,5 +335,5 @@ function getResetTimeMessage(delayMs: number): string {
     timeZoneName: 'short',
   });
 
-  return `Access resets at ${timeFormatter.format(resetDate)}.`;
+  return timeFormatter.format(resetDate);
 }
diff --git a/packages/cli/src/ui/hooks/useShellCompletion.test.ts b/packages/cli/src/ui/hooks/useShellCompletion.test.ts
index 477db3b184..dfe33cf7c4 100644
--- a/packages/cli/src/ui/hooks/useShellCompletion.test.ts
+++ b/packages/cli/src/ui/hooks/useShellCompletion.test.ts
@@ -384,6 +384,10 @@ describe('useShellCompletion utilities', () => {
       // Very basic sanity check: common commands should be found
       if (process.platform !== 'win32') {
         expect(results).toContain('ls');
+      } else {
+        expect(results).toContain('dir');
+        expect(results).toContain('cls');
+        expect(results).toContain('copy');
       }
     });
 
@@ -398,7 +402,12 @@ describe('useShellCompletion utilities', () => {
     it('should handle empty PATH', async () => {
       vi.stubEnv('PATH', '');
       const results = await scanPathExecutables();
-      expect(results).toEqual([]);
+      if (process.platform === 'win32') {
+        expect(results.length).toBeGreaterThan(0);
+        expect(results).toContain('dir');
+      } else {
+        expect(results).toEqual([]);
+      }
       vi.unstubAllEnvs();
     });
   });
diff --git a/packages/cli/src/ui/hooks/useShellCompletion.ts b/packages/cli/src/ui/hooks/useShellCompletion.ts
index 8569ab5cfb..cc73128344 100644
--- a/packages/cli/src/ui/hooks/useShellCompletion.ts
+++ b/packages/cli/src/ui/hooks/useShellCompletion.ts
@@ -4,7 +4,7 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
-import { useEffect, useRef, useCallback } from 'react';
+import { useEffect, useRef, useCallback, useMemo } from 'react';
 import * as fs from 'node:fs/promises';
 import * as path from 'node:path';
 import * as os from 'node:os';
@@ -196,6 +196,60 @@ export async function scanPathExecutables(
   const seen = new Set<string>();
   const executables: string[] = [];
 
+  // Add Windows shell built-ins
+  if (isWindows) {
+    const builtins = [
+      'assoc',
+      'break',
+      'call',
+      'cd',
+      'chcp',
+      'chdir',
+      'cls',
+      'color',
+      'copy',
+      'date',
+      'del',
+      'dir',
+      'echo',
+      'endlocal',
+      'erase',
+      'exit',
+      'for',
+      'ftype',
+      'goto',
+      'if',
+      'md',
+      'mkdir',
+      'mklink',
+      'move',
+      'path',
+      'pause',
+      'popd',
+      'prompt',
+      'pushd',
+      'rd',
+      'rem',
+      'ren',
+      'rename',
+      'rmdir',
+      'set',
+      'setlocal',
+      'shift',
+      'start',
+      'time',
+      'title',
+      'type',
+      'ver',
+      'verify',
+      'vol',
+    ];
+    for (const builtin of builtins) {
+      seen.add(builtin);
+      executables.push(builtin);
+    }
+  }
+
   const dirResults = await Promise.all(
     dirs.map(async (dir) => {
       if (signal?.aborted) return [];
@@ -365,16 +419,10 @@ export async function resolvePathCompletions(
 export interface UseShellCompletionProps {
   /** Whether shell completion is active. */
   enabled: boolean;
-  /** The partial query string (the token under the cursor). */
-  query: string;
-  /** Whether the token is in command position (first word). */
-  isCommandPosition: boolean;
-  /** The full list of parsed tokens */
-  tokens: string[];
-  /** The cursor index in the full list of parsed tokens */
-  cursorIndex: number;
-  /** The root command token */
-  commandToken: string;
+  /** The current line text. */
+  line: string;
+  /** The current cursor column. */
+  cursorCol: number;
   /** The current working directory for path resolution. */
   cwd: string;
   /** Callback to set suggestions on the parent state. */
@@ -383,33 +431,53 @@ export interface UseShellCompletionProps {
   setIsLoadingSuggestions: (isLoading: boolean) => void;
 }
 
+export interface UseShellCompletionReturn {
+  completionStart: number;
+  completionEnd: number;
+  query: string;
+}
+
+const EMPTY_TOKENS: string[] = [];
+
 export function useShellCompletion({
   enabled,
-  query,
-  isCommandPosition,
-  tokens,
-  cursorIndex,
-  commandToken,
+  line,
+  cursorCol,
   cwd,
   setSuggestions,
   setIsLoadingSuggestions,
-}: UseShellCompletionProps): void {
-  const pathCacheRef = useRef<string[] | null>(null);
+}: UseShellCompletionProps): UseShellCompletionReturn {
+  const pathCachePromiseRef = useRef<Promise<string[]> | null>(null);
   const pathEnvRef = useRef<string>(process.env['PATH'] ?? '');
   const abortRef = useRef<AbortController | null>(null);
   const debounceRef = useRef<NodeJS.Timeout | null>(null);
 
+  const tokenInfo = useMemo(
+    () => (enabled ? getTokenAtCursor(line, cursorCol) : null),
+    [enabled, line, cursorCol],
+  );
+
+  const {
+    token: query = '',
+    start: completionStart = -1,
+    end: completionEnd = -1,
+    isFirstToken: isCommandPosition = false,
+    tokens = EMPTY_TOKENS,
+    cursorIndex = -1,
+    commandToken = '',
+  } = tokenInfo || {};
+
   // Invalidate PATH cache when $PATH changes
   useEffect(() => {
     const currentPath = process.env['PATH'] ?? '';
     if (currentPath !== pathEnvRef.current) {
-      pathCacheRef.current = null;
+      pathCachePromiseRef.current = null;
       pathEnvRef.current = currentPath;
     }
   });
 
   const performCompletion = useCallback(async () => {
-    if (!enabled) {
+    if (!enabled || !tokenInfo) {
       setSuggestions([]);
       return;
     }
@@ -434,15 +502,25 @@ export function useShellCompletion({
       if (isCommandPosition) {
         setIsLoadingSuggestions(true);
 
-        if (!pathCacheRef.current) {
-          pathCacheRef.current = await scanPathExecutables(signal);
+        if (!pathCachePromiseRef.current) {
+          // We don't pass the signal here because we want the cache to finish
+          // even if this specific completion request is aborted.
+          pathCachePromiseRef.current = scanPathExecutables();
         }
 
+        const executables = await pathCachePromiseRef.current;
         if (signal.aborted) return;
 
         const queryLower = query.toLowerCase();
-        results = pathCacheRef.current
+        results = executables
           .filter((cmd) => cmd.toLowerCase().startsWith(queryLower))
+          .sort((a, b) => {
+            // Prioritize shorter commands as they are likely common built-ins
+            if (a.length !== b.length) {
+              return a.length - b.length;
+            }
+            return a.localeCompare(b);
+          })
           .slice(0, MAX_SHELL_SUGGESTIONS)
           .map((cmd) => ({
             label: cmd,
@@ -501,6 +579,7 @@ export function useShellCompletion({
     }
   }, [
     enabled,
+    tokenInfo,
     query,
     isCommandPosition,
     tokens,
@@ -511,13 +590,17 @@ export function useShellCompletion({
     setIsLoadingSuggestions,
   ]);
 
-  // Debounced effect to trigger completion
   useEffect(() => {
     if (!enabled) {
+      abortRef.current?.abort();
       setSuggestions([]);
       setIsLoadingSuggestions(false);
-      return;
     }
+  }, [enabled, setSuggestions, setIsLoadingSuggestions]);
+
+  // Debounced effect to trigger completion
+  useEffect(() => {
+    if (!enabled) return;
 
     if (debounceRef.current) {
       clearTimeout(debounceRef.current);
@@ -533,7 +616,7 @@ export function useShellCompletion({
         clearTimeout(debounceRef.current);
       }
     };
-  }, [enabled, performCompletion, setSuggestions, setIsLoadingSuggestions]);
+  }, [enabled, performCompletion]);
 
   // Cleanup on unmount
   useEffect(
@@ -545,4 +628,10 @@ export function useShellCompletion({
     },
     [],
   );
+
+  return {
+    completionStart,
+    completionEnd,
+    query,
+  };
 }
diff --git a/packages/cli/src/ui/hooks/useToolScheduler.test.ts b/packages/cli/src/ui/hooks/useToolScheduler.test.ts
index ca9df3d5d3..764e5f641f 100644
--- a/packages/cli/src/ui/hooks/useToolScheduler.test.ts
+++ b/packages/cli/src/ui/hooks/useToolScheduler.test.ts
@@ -359,14 +359,10 @@ describe('useToolScheduler', () => {
       } as ToolCallsUpdateMessage);
     });
 
-    let [toolCalls] = result.current;
-    expect(toolCalls).toHaveLength(2);
-    expect(
-      toolCalls.find((t) => t.request.callId === 'call-root')?.schedulerId,
-    ).toBe(ROOT_SCHEDULER_ID);
-    expect(
-      toolCalls.find((t) => t.request.callId === 'call-sub')?.schedulerId,
-    ).toBe('subagent-1');
+    const [toolCalls] = result.current;
+    expect(toolCalls).toHaveLength(1);
+    expect(toolCalls[0].request.callId).toBe('call-root');
+    expect(toolCalls[0].schedulerId).toBe(ROOT_SCHEDULER_ID);
 
     // 2. Call setToolCallsForDisplay (e.g., simulate a manual update or clear)
     act(() => {
@@ -377,34 +373,45 @@ describe('useToolScheduler', () => {
     });
 
     // 3. Verify that tools are still present and maintain their scheduler IDs
-    // The internal map should have been re-grouped.
-    [toolCalls] = result.current;
-    expect(toolCalls).toHaveLength(2);
-    expect(toolCalls.every((t) => t.responseSubmittedToGemini)).toBe(true);
+    const [toolCalls2] = result.current;
+    expect(toolCalls2).toHaveLength(1);
+    expect(toolCalls2[0].responseSubmittedToGemini).toBe(true);
+    expect(toolCalls2[0].schedulerId).toBe(ROOT_SCHEDULER_ID);
+  });
 
-    const updatedRoot = toolCalls.find((t) => t.request.callId === 'call-root');
-    const updatedSub = toolCalls.find((t) => t.request.callId === 'call-sub');
+  it('ignores TOOL_CALLS_UPDATE from non-root schedulers', () => {
+    const { result } = renderHook(() =>
+      useToolScheduler(
+        vi.fn().mockResolvedValue(undefined),
+        mockConfig,
+        () => undefined,
+      ),
+    );
 
-    expect(updatedRoot?.schedulerId).toBe(ROOT_SCHEDULER_ID);
-    expect(updatedSub?.schedulerId).toBe('subagent-1');
+    const subagentCall = {
+      status: CoreToolCallStatus.Executing as const,
+      request: {
+        callId: 'call-sub',
+        name: 'test',
+        args: {},
+        isClientInitiated: false,
+        prompt_id: 'p1',
+      },
+      tool: createMockTool(),
+      invocation: createMockInvocation(),
+      schedulerId: 'subagent-1',
+    };
 
-    // 4. Verify that a subsequent update to ONE scheduler doesn't wipe the other
     act(() => {
       void mockMessageBus.publish({
         type: MessageBusType.TOOL_CALLS_UPDATE,
-        toolCalls: [{ ...callRoot, status: CoreToolCallStatus.Executing }],
-        schedulerId: ROOT_SCHEDULER_ID,
+        toolCalls: [subagentCall],
+        schedulerId: 'subagent-1',
       } as ToolCallsUpdateMessage);
     });
 
-    [toolCalls] = result.current;
-    expect(toolCalls).toHaveLength(2);
-    expect(
-      toolCalls.find((t) => t.request.callId === 'call-root')?.status,
-    ).toBe(CoreToolCallStatus.Executing);
-    expect(
-      toolCalls.find((t) => t.request.callId === 'call-sub')?.schedulerId,
-    ).toBe('subagent-1');
+    const [toolCalls] = result.current;
+    expect(toolCalls).toHaveLength(0);
   });
 
   it('adapts success/error status to executing when a tail call is present', () => {
diff --git a/packages/cli/src/ui/hooks/useToolScheduler.ts b/packages/cli/src/ui/hooks/useToolScheduler.ts
index f09ed9b81f..0fe732b26e 100644
--- a/packages/cli/src/ui/hooks/useToolScheduler.ts
+++ b/packages/cli/src/ui/hooks/useToolScheduler.ts
@@ -115,6 +115,12 @@ export function useToolScheduler(
 
   useEffect(() => {
     const handler = (event: ToolCallsUpdateMessage) => {
+      // Only process updates for the root scheduler.
+      // Subagent internal tools should not be displayed in the main tool list.
+      if (event.schedulerId !== ROOT_SCHEDULER_ID) {
+        return;
+      }
+
       // Update output timer for UI spinners (Side Effect)
       const hasExecuting = event.toolCalls.some(
         (tc) =>
diff --git a/packages/cli/src/ui/types.ts b/packages/cli/src/ui/types.ts
index ee958fcfb5..55048ef6bc 100644
--- a/packages/cli/src/ui/types.ts
+++ b/packages/cli/src/ui/types.ts
@@ -102,6 +102,8 @@ export interface IndividualToolCallDisplay {
   description: string;
   resultDisplay: ToolResultDisplay | undefined;
   status: CoreToolCallStatus;
+  // True when the tool was initiated directly by the user (slash/@/shell flows).
+  isClientInitiated?: boolean;
   confirmationDetails: SerializableConfirmationDetails | undefined;
   renderOutputAsMarkdown?: boolean;
   ptyId?: number;
@@ -201,6 +203,7 @@ export type HistoryItemStats = HistoryItemQuotaBase & {
   type: 'stats';
   duration: string;
   quotas?: RetrieveUserQuotaResponse;
+  creditBalance?: number;
 };
 
 export type HistoryItemModelStats = HistoryItemQuotaBase & {
@@ -337,6 +340,7 @@ export type HistoryItemMcpStatus = HistoryItemBase & {
       isPersistentDisabled: boolean;
     }
   >;
+  errors: Record<string, string>;
   blockedServers: Array<{ name: string; extensionName: string }>;
   discoveryInProgress: boolean;
   connectingServers: string[];
diff --git a/packages/cli/src/ui/utils/InlineMarkdownRenderer.tsx b/packages/cli/src/ui/utils/InlineMarkdownRenderer.tsx
index 02a34842f4..19d4b3cac8 100644
--- a/packages/cli/src/ui/utils/InlineMarkdownRenderer.tsx
+++ b/packages/cli/src/ui/utils/InlineMarkdownRenderer.tsx
@@ -6,223 +6,14 @@
 
 import React from 'react';
 import { Text } from 'ink';
-import chalk from 'chalk';
-import {
-  resolveColor,
-  INK_SUPPORTED_NAMES,
-  INK_NAME_TO_HEX_MAP,
-} from '../themes/color-utils.js';
-import { theme } from '../semantic-colors.js';
-import { debugLogger } from '@google/gemini-cli-core';
+import { parseMarkdownToANSI } from './markdownParsingUtils.js';
 import { stripUnsafeCharacters } from './textUtils.js';
 
-// Constants for Markdown parsing
-const BOLD_MARKER_LENGTH = 2; // For "**"
-const ITALIC_MARKER_LENGTH = 1; // For "*" or "_"
-const STRIKETHROUGH_MARKER_LENGTH = 2; // For "~~")
-const INLINE_CODE_MARKER_LENGTH = 1; // For "`"
-const UNDERLINE_TAG_START_LENGTH = 3; // For "<u>"
-const UNDERLINE_TAG_END_LENGTH = 4; // For "</u>"
-
 interface RenderInlineProps {
   text: string;
   defaultColor?: string;
 }
 
-/**
- * Helper to apply color to a string using ANSI escape codes,
- * consistent with how Ink's colorize works.
- */
-const ansiColorize = (str: string, color: string | undefined): string => {
-  if (!color) return str;
-  const resolved = resolveColor(color);
-  if (!resolved) return str;
-
-  if (resolved.startsWith('#')) {
-    return chalk.hex(resolved)(str);
-  }
-
-  const mappedHex = INK_NAME_TO_HEX_MAP[resolved];
-  if (mappedHex) {
-    return chalk.hex(mappedHex)(str);
-  }
-
-  if (INK_SUPPORTED_NAMES.has(resolved)) {
-    switch (resolved) {
-      case 'black':
-        return chalk.black(str);
-      case 'red':
-        return chalk.red(str);
-      case 'green':
-        return chalk.green(str);
-      case 'yellow':
-        return chalk.yellow(str);
-      case 'blue':
-        return chalk.blue(str);
-      case 'magenta':
-        return chalk.magenta(str);
-      case 'cyan':
-        return chalk.cyan(str);
-      case 'white':
-        return chalk.white(str);
-      case 'gray':
-      case 'grey':
-        return chalk.gray(str);
-      default:
-        return str;
-    }
-  }
-
-  return str;
-};
-
-/**
- * Converts markdown text into a string with ANSI escape codes.
- * This mirrors the parsing logic in InlineMarkdownRenderer.tsx
- */
-export const parseMarkdownToANSI = (
-  text: string,
-  defaultColor?: string,
-): string => {
-  const baseColor = defaultColor ?? theme.text.primary;
-  // Early return for plain text without markdown or URLs
-  if (!/[*_~`<[https?:]/.test(text)) {
-    return ansiColorize(text, baseColor);
-  }
-
-  let result = '';
-  const inlineRegex =
-    /(\*\*\*.*?\*\*\*|\*\*.*?\*\*|\*.*?\*|_.*?_|~~.*?~~|\[.*?\]\(.*?\)|`+.+?`+|<u>.*?<\/u>|https?:\/\/\S+)/g;
-  let lastIndex = 0;
-  let match;
-
-  while ((match = inlineRegex.exec(text)) !== null) {
-    if (match.index > lastIndex) {
-      result += ansiColorize(text.slice(lastIndex, match.index), baseColor);
-    }
-
-    const fullMatch = match[0];
-    let styledPart = '';
-
-    try {
-      if (
-        fullMatch.endsWith('***') &&
-        fullMatch.startsWith('***') &&
-        fullMatch.length > (BOLD_MARKER_LENGTH + ITALIC_MARKER_LENGTH) * 2
-      ) {
-        styledPart = chalk.bold(
-          chalk.italic(
-            parseMarkdownToANSI(
-              fullMatch.slice(
-                BOLD_MARKER_LENGTH + ITALIC_MARKER_LENGTH,
-                -BOLD_MARKER_LENGTH - ITALIC_MARKER_LENGTH,
-              ),
-              baseColor,
-            ),
-          ),
-        );
-      } else if (
-        fullMatch.endsWith('**') &&
-        fullMatch.startsWith('**') &&
-        fullMatch.length > BOLD_MARKER_LENGTH * 2
-      ) {
-        styledPart = chalk.bold(
-          parseMarkdownToANSI(
-            fullMatch.slice(BOLD_MARKER_LENGTH, -BOLD_MARKER_LENGTH),
-            baseColor,
-          ),
-        );
-      } else if (
-        fullMatch.length > ITALIC_MARKER_LENGTH * 2 &&
-        ((fullMatch.startsWith('*') && fullMatch.endsWith('*')) ||
-          (fullMatch.startsWith('_') && fullMatch.endsWith('_'))) &&
-        !/\w/.test(text.substring(match.index - 1, match.index)) &&
-        !/\w/.test(
-          text.substring(inlineRegex.lastIndex, inlineRegex.lastIndex + 1),
-        ) &&
-        !/\S[./\\]/.test(text.substring(match.index - 2, match.index)) &&
-        !/[./\\]\S/.test(
-          text.substring(inlineRegex.lastIndex, inlineRegex.lastIndex + 2),
-        )
-      ) {
-        styledPart = chalk.italic(
-          parseMarkdownToANSI(
-            fullMatch.slice(ITALIC_MARKER_LENGTH, -ITALIC_MARKER_LENGTH),
-            baseColor,
-          ),
-        );
-      } else if (
-        fullMatch.startsWith('~~') &&
-        fullMatch.endsWith('~~') &&
-        fullMatch.length > STRIKETHROUGH_MARKER_LENGTH * 2
-      ) {
-        styledPart = chalk.strikethrough(
-          parseMarkdownToANSI(
-            fullMatch.slice(
-              STRIKETHROUGH_MARKER_LENGTH,
-              -STRIKETHROUGH_MARKER_LENGTH,
-            ),
-            baseColor,
-          ),
-        );
-      } else if (
-        fullMatch.startsWith('`') &&
-        fullMatch.endsWith('`') &&
-        fullMatch.length > INLINE_CODE_MARKER_LENGTH
-      ) {
-        const codeMatch = fullMatch.match(/^(`+)(.+?)\1$/s);
-        if (codeMatch && codeMatch[2]) {
-          styledPart = ansiColorize(codeMatch[2], theme.text.accent);
-        }
-      } else if (
-        fullMatch.startsWith('[') &&
-        fullMatch.includes('](') &&
-        fullMatch.endsWith(')')
-      ) {
-        const linkMatch = fullMatch.match(/\[(.*?)\]\((.*?)\)/);
-        if (linkMatch) {
-          const linkText = linkMatch[1];
-          const url = linkMatch[2];
-          styledPart =
-            parseMarkdownToANSI(linkText, baseColor) +
-            ansiColorize(' (', baseColor) +
-            ansiColorize(url, theme.text.link) +
-            ansiColorize(')', baseColor);
-        }
-      } else if (
-        fullMatch.startsWith('<u>') &&
-        fullMatch.endsWith('</u>') &&
-        fullMatch.length >
-          UNDERLINE_TAG_START_LENGTH + UNDERLINE_TAG_END_LENGTH - 1
-      ) {
-        styledPart = chalk.underline(
-          parseMarkdownToANSI(
-            fullMatch.slice(
-              UNDERLINE_TAG_START_LENGTH,
-              -UNDERLINE_TAG_END_LENGTH,
-            ),
-            baseColor,
-          ),
-        );
-      } else if (fullMatch.match(/^https?:\/\//)) {
-        styledPart = ansiColorize(fullMatch, theme.text.link);
-      }
-    } catch (e) {
-      debugLogger.warn('Error parsing inline markdown part:', fullMatch, e);
-      styledPart = '';
-    }
-
-    result += styledPart || ansiColorize(fullMatch, baseColor);
-    lastIndex = inlineRegex.lastIndex;
-  }
-
-  if (lastIndex < text.length) {
-    result += ansiColorize(text.slice(lastIndex), baseColor);
-  }
-
-  return result;
-};
-
 const RenderInlineInternal: React.FC<RenderInlineProps> = ({
   text: rawText,
   defaultColor,
diff --git a/packages/cli/src/ui/utils/TableRenderer.tsx b/packages/cli/src/ui/utils/TableRenderer.tsx
index 143b1fe015..6143571f6a 100644
--- a/packages/cli/src/ui/utils/TableRenderer.tsx
+++ b/packages/cli/src/ui/utils/TableRenderer.tsx
@@ -17,7 +17,7 @@ import {
   widestLineFromStyledChars,
 } from 'ink';
 import { theme } from '../semantic-colors.js';
-import { parseMarkdownToANSI } from './InlineMarkdownRenderer.js';
+import { parseMarkdownToANSI } from './markdownParsingUtils.js';
 import { stripUnsafeCharacters } from './textUtils.js';
 
 interface TableRendererProps {
diff --git a/packages/cli/src/ui/utils/markdownParsingUtils.test.ts b/packages/cli/src/ui/utils/markdownParsingUtils.test.ts
index 05f19f09f7..a9ff96401f 100644
--- a/packages/cli/src/ui/utils/markdownParsingUtils.test.ts
+++ b/packages/cli/src/ui/utils/markdownParsingUtils.test.ts
@@ -6,7 +6,7 @@
 
 import { describe, it, expect, beforeAll, vi } from 'vitest';
 import chalk from 'chalk';
-import { parseMarkdownToANSI } from './InlineMarkdownRenderer.js';
+import { parseMarkdownToANSI } from './markdownParsingUtils.js';
 
 // Mock the theme to use explicit colors instead of empty strings from the default theme.
 // This ensures that ansiColorize actually applies ANSI codes that we can verify.
diff --git a/packages/cli/src/ui/utils/markdownParsingUtils.ts b/packages/cli/src/ui/utils/markdownParsingUtils.ts
new file mode 100644
index 0000000000..10f7cb7a40
--- /dev/null
+++ b/packages/cli/src/ui/utils/markdownParsingUtils.ts
@@ -0,0 +1,216 @@
+/**
+ * @license
+ * Copyright 2025 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import chalk from 'chalk';
+import {
+  resolveColor,
+  INK_SUPPORTED_NAMES,
+  INK_NAME_TO_HEX_MAP,
+} from '../themes/color-utils.js';
+import { theme } from '../semantic-colors.js';
+import { debugLogger } from '@google/gemini-cli-core';
+
+// Constants for Markdown parsing
+const BOLD_MARKER_LENGTH = 2; // For "**"
+const ITALIC_MARKER_LENGTH = 1; // For "*" or "_"
+const STRIKETHROUGH_MARKER_LENGTH = 2; // For "~~")
+const INLINE_CODE_MARKER_LENGTH = 1; // For "`"
+const UNDERLINE_TAG_START_LENGTH = 3; // For "<u>"
+const UNDERLINE_TAG_END_LENGTH = 4; // For "</u>"
+
+/**
+ * Helper to apply color to a string using ANSI escape codes,
+ * consistent with how Ink's colorize works.
+ */
+const ansiColorize = (str: string, color: string | undefined): string => {
+  if (!color) return str;
+  const resolved = resolveColor(color);
+  if (!resolved) return str;
+
+  if (resolved.startsWith('#')) {
+    return chalk.hex(resolved)(str);
+  }
+
+  const mappedHex = INK_NAME_TO_HEX_MAP[resolved];
+  if (mappedHex) {
+    return chalk.hex(mappedHex)(str);
+  }
+
+  if (INK_SUPPORTED_NAMES.has(resolved)) {
+    switch (resolved) {
+      case 'black':
+        return chalk.black(str);
+      case 'red':
+        return chalk.red(str);
+      case 'green':
+        return chalk.green(str);
+      case 'yellow':
+        return chalk.yellow(str);
+      case 'blue':
+        return chalk.blue(str);
+      case 'magenta':
+        return chalk.magenta(str);
+      case 'cyan':
+        return chalk.cyan(str);
+      case 'white':
+        return chalk.white(str);
+      case 'gray':
+      case 'grey':
+        return chalk.gray(str);
+      default:
+        return str;
+    }
+  }
+
+  return str;
+};
+
+/**
+ * Converts markdown text into a string with ANSI escape codes.
+ * This mirrors the parsing logic in InlineMarkdownRenderer.tsx
+ */
+export const parseMarkdownToANSI = (
+  text: string,
+  defaultColor?: string,
+): string => {
+  const baseColor = defaultColor ?? theme.text.primary;
+  // Early return for plain text without markdown or URLs
+  if (!/[*_~`<[https?:]/.test(text)) {
+    return ansiColorize(text, baseColor);
+  }
+
+  let result = '';
+  const inlineRegex =
+    /(\*\*\*.*?\*\*\*|\*\*.*?\*\*|\*.*?\*|_.*?_|~~.*?~~|\[.*?\]\(.*?\)|`+.+?`+|<u>.*?<\/u>|https?:\/\/\S+)/g;
+  let lastIndex = 0;
+  let match;
+
+  while ((match = inlineRegex.exec(text)) !== null) {
+    if (match.index > lastIndex) {
+      result += ansiColorize(text.slice(lastIndex, match.index), baseColor);
+    }
+
+    const fullMatch = match[0];
+    let styledPart = '';
+
+    try {
+      if (
+        fullMatch.endsWith('***') &&
+        fullMatch.startsWith('***') &&
+        fullMatch.length > (BOLD_MARKER_LENGTH + ITALIC_MARKER_LENGTH) * 2
+      ) {
+        styledPart = chalk.bold(
+          chalk.italic(
+            parseMarkdownToANSI(
+              fullMatch.slice(
+                BOLD_MARKER_LENGTH + ITALIC_MARKER_LENGTH,
+                -BOLD_MARKER_LENGTH - ITALIC_MARKER_LENGTH,
+              ),
+              baseColor,
+            ),
+          ),
+        );
+      } else if (
+        fullMatch.endsWith('**') &&
+        fullMatch.startsWith('**') &&
+        fullMatch.length > BOLD_MARKER_LENGTH * 2
+      ) {
+        styledPart = chalk.bold(
+          parseMarkdownToANSI(
+            fullMatch.slice(BOLD_MARKER_LENGTH, -BOLD_MARKER_LENGTH),
+            baseColor,
+          ),
+        );
+      } else if (
+        fullMatch.length > ITALIC_MARKER_LENGTH * 2 &&
+        ((fullMatch.startsWith('*') && fullMatch.endsWith('*')) ||
+          (fullMatch.startsWith('_') && fullMatch.endsWith('_'))) &&
+        !/\w/.test(text.substring(match.index - 1, match.index)) &&
+        !/\w/.test(
+          text.substring(inlineRegex.lastIndex, inlineRegex.lastIndex + 1),
+        ) &&
+        !/\S[./\\]/.test(text.substring(match.index - 2, match.index)) &&
+        !/[./\\]\S/.test(
+          text.substring(inlineRegex.lastIndex, inlineRegex.lastIndex + 2),
+        )
+      ) {
+        styledPart = chalk.italic(
+          parseMarkdownToANSI(
+            fullMatch.slice(ITALIC_MARKER_LENGTH, -ITALIC_MARKER_LENGTH),
+            baseColor,
+          ),
+        );
+      } else if (
+        fullMatch.startsWith('~~') &&
+        fullMatch.endsWith('~~') &&
+        fullMatch.length > STRIKETHROUGH_MARKER_LENGTH * 2
+      ) {
+        styledPart = chalk.strikethrough(
+          parseMarkdownToANSI(
+            fullMatch.slice(
+              STRIKETHROUGH_MARKER_LENGTH,
+              -STRIKETHROUGH_MARKER_LENGTH,
+            ),
+            baseColor,
+          ),
+        );
+      } else if (
+        fullMatch.startsWith('`') &&
+        fullMatch.endsWith('`') &&
+        fullMatch.length > INLINE_CODE_MARKER_LENGTH
+      ) {
+        const codeMatch = fullMatch.match(/^(`+)(.+?)\1$/s);
+        if (codeMatch && codeMatch[2]) {
+          styledPart = ansiColorize(codeMatch[2], theme.text.accent);
+        }
+      } else if (
+        fullMatch.startsWith('[') &&
+        fullMatch.includes('](') &&
+        fullMatch.endsWith(')')
+      ) {
+        const linkMatch = fullMatch.match(/\[(.*?)\]\((.*?)\)/);
+        if (linkMatch) {
+          const linkText = linkMatch[1];
+          const url = linkMatch[2];
+          styledPart =
+            parseMarkdownToANSI(linkText, baseColor) +
+            ansiColorize(' (', baseColor) +
+            ansiColorize(url, theme.text.link) +
+            ansiColorize(')', baseColor);
+        }
+      } else if (
+        fullMatch.startsWith('<u>') &&
+        fullMatch.endsWith('</u>') &&
+        fullMatch.length >
+          UNDERLINE_TAG_START_LENGTH + UNDERLINE_TAG_END_LENGTH - 1
+      ) {
+        styledPart = chalk.underline(
+          parseMarkdownToANSI(
+            fullMatch.slice(
+              UNDERLINE_TAG_START_LENGTH,
+              -UNDERLINE_TAG_END_LENGTH,
+            ),
+            baseColor,
+          ),
+        );
+      } else if (fullMatch.match(/^https?:\/\//)) {
+        styledPart = ansiColorize(fullMatch, theme.text.link);
+      }
+    } catch (e) {
+      debugLogger.warn('Error parsing inline markdown part:', fullMatch, e);
+      styledPart = '';
+    }
+
+    result += styledPart || ansiColorize(fullMatch, baseColor);
+    lastIndex = inlineRegex.lastIndex;
+  }
+
+  if (lastIndex < text.length) {
+    result += ansiColorize(text.slice(lastIndex), baseColor);
+  }
+
+  return result;
+};
diff --git a/packages/core/src/billing/billing.test.ts b/packages/core/src/billing/billing.test.ts
new file mode 100644
index 0000000000..e594061ad6
--- /dev/null
+++ b/packages/core/src/billing/billing.test.ts
@@ -0,0 +1,254 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { describe, it, expect } from 'vitest';
+import type { GeminiUserTier } from '../code_assist/types.js';
+import {
+  buildG1Url,
+  getG1CreditBalance,
+  G1_CREDIT_TYPE,
+  G1_UTM_CAMPAIGNS,
+  isOverageEligibleModel,
+  shouldAutoUseCredits,
+  shouldShowEmptyWalletMenu,
+  shouldShowOverageMenu,
+  wrapInAccountChooser,
+} from './billing.js';
+
+describe('billing', () => {
+  describe('wrapInAccountChooser', () => {
+    it('should wrap URL with AccountChooser redirect', () => {
+      const result = wrapInAccountChooser(
+        'user@gmail.com',
+        'https://one.google.com/ai/activity',
+      );
+      expect(result).toBe(
+        'https://accounts.google.com/AccountChooser?Email=user%40gmail.com&continue=https%3A%2F%2Fone.google.com%2Fai%2Factivity',
+      );
+    });
+
+    it('should handle special characters in email', () => {
+      const result = wrapInAccountChooser(
+        'user+test@example.com',
+        'https://example.com',
+      );
+      expect(result).toContain('Email=user%2Btest%40example.com');
+    });
+  });
+
+  describe('buildG1Url', () => {
+    it('should build activity URL with UTM params wrapped in AccountChooser', () => {
+      const result = buildG1Url(
+        'activity',
+        'user@gmail.com',
+        G1_UTM_CAMPAIGNS.MANAGE_ACTIVITY,
+      );
+
+      // Should contain AccountChooser prefix
+      expect(result).toContain('https://accounts.google.com/AccountChooser');
+      expect(result).toContain('Email=user%40gmail.com');
+
+      // The continue URL should contain the G1 activity path and UTM params
+      expect(result).toContain('one.google.com%2Fai%2Factivity');
+      expect(result).toContain('utm_source%3Dgemini_cli');
+      expect(result).toContain(
+        'utm_campaign%3Dhydrogen_cli_settings_ai_credits_activity_page',
+      );
+    });
+
+    it('should build credits URL with UTM params wrapped in AccountChooser', () => {
+      const result = buildG1Url(
+        'credits',
+        'test@example.com',
+        G1_UTM_CAMPAIGNS.EMPTY_WALLET_ADD_CREDITS,
+      );
+
+      expect(result).toContain('https://accounts.google.com/AccountChooser');
+      expect(result).toContain('one.google.com%2Fai%2Fcredits');
+      expect(result).toContain(
+        'utm_campaign%3Dhydrogen_cli_insufficient_credits_add_credits',
+      );
+    });
+  });
+
+  describe('getG1CreditBalance', () => {
+    it('should return null for null tier', () => {
+      expect(getG1CreditBalance(null)).toBeNull();
+    });
+
+    it('should return null for undefined tier', () => {
+      expect(getG1CreditBalance(undefined)).toBeNull();
+    });
+
+    it('should return null for tier without availableCredits', () => {
+      const tier: GeminiUserTier = { id: 'PERSONAL' };
+      expect(getG1CreditBalance(tier)).toBeNull();
+    });
+
+    it('should return null for empty availableCredits array', () => {
+      const tier: GeminiUserTier = { id: 'PERSONAL', availableCredits: [] };
+      expect(getG1CreditBalance(tier)).toBeNull();
+    });
+
+    it('should return null when no G1 credit type found', () => {
+      const tier: GeminiUserTier = {
+        id: 'PERSONAL',
+        availableCredits: [
+          { creditType: 'CREDIT_TYPE_UNSPECIFIED', creditAmount: '100' },
+        ],
+      };
+      expect(getG1CreditBalance(tier)).toBeNull();
+    });
+
+    it('should return G1 credit balance when present', () => {
+      const tier: GeminiUserTier = {
+        id: 'PERSONAL',
+        availableCredits: [{ creditType: G1_CREDIT_TYPE, creditAmount: '500' }],
+      };
+      expect(getG1CreditBalance(tier)).toBe(500);
+    });
+
+    it('should return G1 credit balance when multiple credit types present', () => {
+      const tier: GeminiUserTier = {
+        id: 'PERSONAL',
+        availableCredits: [
+          { creditType: 'CREDIT_TYPE_UNSPECIFIED', creditAmount: '100' },
+          { creditType: G1_CREDIT_TYPE, creditAmount: '750' },
+        ],
+      };
+      expect(getG1CreditBalance(tier)).toBe(750);
+    });
+
+    it('should return 0 for invalid credit amount', () => {
+      const tier: GeminiUserTier = {
+        id: 'PERSONAL',
+        availableCredits: [
+          { creditType: G1_CREDIT_TYPE, creditAmount: 'invalid' },
+        ],
+      };
+      expect(getG1CreditBalance(tier)).toBe(0);
+    });
+
+    it('should handle large credit amounts (int64 as string)', () => {
+      const tier: GeminiUserTier = {
+        id: 'PERSONAL',
+        availableCredits: [
+          { creditType: G1_CREDIT_TYPE, creditAmount: '9999999999' },
+        ],
+      };
+      expect(getG1CreditBalance(tier)).toBe(9999999999);
+    });
+
+    it('should sum multiple credits of the same G1 type', () => {
+      const tier: GeminiUserTier = {
+        id: 'PERSONAL',
+        availableCredits: [
+          { creditType: G1_CREDIT_TYPE, creditAmount: '1000' },
+          { creditType: G1_CREDIT_TYPE, creditAmount: '8' },
+        ],
+      };
+      expect(getG1CreditBalance(tier)).toBe(1008);
+    });
+  });
+
+  describe('shouldAutoUseCredits', () => {
+    it('should return true when strategy is always and balance > 0', () => {
+      expect(shouldAutoUseCredits('always', 100)).toBe(true);
+    });
+
+    it('should return false when strategy is always but balance is 0', () => {
+      expect(shouldAutoUseCredits('always', 0)).toBe(false);
+    });
+
+    it('should return false when strategy is ask', () => {
+      expect(shouldAutoUseCredits('ask', 100)).toBe(false);
+    });
+
+    it('should return false when strategy is never', () => {
+      expect(shouldAutoUseCredits('never', 100)).toBe(false);
+    });
+
+    it('should return false when creditBalance is null (ineligible)', () => {
+      expect(shouldAutoUseCredits('always', null)).toBe(false);
+    });
+  });
+
+  describe('shouldShowOverageMenu', () => {
+    it('should return true when strategy is ask and balance > 0', () => {
+      expect(shouldShowOverageMenu('ask', 100)).toBe(true);
+    });
+
+    it('should return false when strategy is ask but balance is 0', () => {
+      expect(shouldShowOverageMenu('ask', 0)).toBe(false);
+    });
+
+    it('should return false when strategy is always', () => {
+      expect(shouldShowOverageMenu('always', 100)).toBe(false);
+    });
+
+    it('should return false when strategy is never', () => {
+      expect(shouldShowOverageMenu('never', 100)).toBe(false);
+    });
+
+    it('should return false when creditBalance is null (ineligible)', () => {
+      expect(shouldShowOverageMenu('ask', null)).toBe(false);
+    });
+  });
+
+  describe('shouldShowEmptyWalletMenu', () => {
+    it('should return true when strategy is ask and balance is 0', () => {
+      expect(shouldShowEmptyWalletMenu('ask', 0)).toBe(true);
+    });
+
+    it('should return true when strategy is always and balance is 0', () => {
+      expect(shouldShowEmptyWalletMenu('always', 0)).toBe(true);
+    });
+
+    it('should return false when strategy is never', () => {
+      expect(shouldShowEmptyWalletMenu('never', 0)).toBe(false);
+    });
+
+    it('should return false when balance > 0', () => {
+      expect(shouldShowEmptyWalletMenu('ask', 100)).toBe(false);
+    });
+
+    it('should return false when creditBalance is null (ineligible)', () => {
+      expect(shouldShowEmptyWalletMenu('ask', null)).toBe(false);
+    });
+  });
+
+  describe('isOverageEligibleModel', () => {
+    it('should return true for gemini-3-pro-preview', () => {
+      expect(isOverageEligibleModel('gemini-3-pro-preview')).toBe(true);
+    });
+
+    it('should return true for gemini-3.1-pro-preview', () => {
+      expect(isOverageEligibleModel('gemini-3.1-pro-preview')).toBe(true);
+    });
+
+    it('should return true for gemini-3.1-pro-preview-customtools', () => {
+      expect(isOverageEligibleModel('gemini-3.1-pro-preview-customtools')).toBe(
+        false,
+      );
+    });
+
+    it('should return false for gemini-3-flash-preview', () => {
+      expect(isOverageEligibleModel('gemini-3-flash-preview')).toBe(false);
+    });
+
+    it('should return false for gemini-2.5-pro', () => {
+      expect(isOverageEligibleModel('gemini-2.5-pro')).toBe(false);
+    });
+
+    it('should return false for gemini-2.5-flash', () => {
+      expect(isOverageEligibleModel('gemini-2.5-flash')).toBe(false);
+    });
+
+    it('should return false for custom model names', () => {
+      expect(isOverageEligibleModel('my-custom-model')).toBe(false);
+    });
+  });
+});
diff --git a/packages/core/src/billing/billing.ts b/packages/core/src/billing/billing.ts
new file mode 100644
index 0000000000..19afe72e16
--- /dev/null
+++ b/packages/core/src/billing/billing.ts
@@ -0,0 +1,186 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import type {
+  AvailableCredits,
+  CreditType,
+  GeminiUserTier,
+} from '../code_assist/types.js';
+import {
+  PREVIEW_GEMINI_MODEL,
+  PREVIEW_GEMINI_3_1_MODEL,
+} from '../config/models.js';
+
+/**
+ * Strategy for handling quota exhaustion when AI credits are available.
+ * - 'ask': Prompt the user each time
+ * - 'always': Automatically use credits
+ * - 'never': Never use credits, show standard fallback
+ */
+export type OverageStrategy = 'ask' | 'always' | 'never';
+
+/** Credit type for Google One AI credits */
+export const G1_CREDIT_TYPE: CreditType = 'GOOGLE_ONE_AI';
+
+/**
+ * The set of models that support AI credits overage billing.
+ * Only these models are eligible for the credits-based retry flow.
+ */
+export const OVERAGE_ELIGIBLE_MODELS = new Set([
+  PREVIEW_GEMINI_MODEL,
+  PREVIEW_GEMINI_3_1_MODEL,
+]);
+
+/**
+ * Checks if a model is eligible for AI credits overage billing.
+ * @param model The model name to check.
+ * @returns true if the model supports credits overage, false otherwise.
+ */
+export function isOverageEligibleModel(model: string): boolean {
+  return OVERAGE_ELIGIBLE_MODELS.has(model);
+}
+
+/** Base URL for Google One AI page */
+const G1_AI_BASE_URL = 'https://one.google.com/ai';
+
+/** AccountChooser URL for redirecting with email context */
+const ACCOUNT_CHOOSER_URL = 'https://accounts.google.com/AccountChooser';
+
+/** UTM parameters for CLI tracking */
+const UTM_SOURCE = 'gemini_cli';
+// TODO: change to 'desktop' when G1 service fix is rolled out
+const UTM_MEDIUM = 'web';
+
+/**
+ * Wraps a URL in the AccountChooser redirect to maintain user context.
+ * @param email User's email address for account selection
+ * @param continueUrl The destination URL after account selection
+ * @returns The full AccountChooser redirect URL
+ */
+export function wrapInAccountChooser(
+  email: string,
+  continueUrl: string,
+): string {
+  const params = new URLSearchParams({
+    Email: email,
+    continue: continueUrl,
+  });
+  return `${ACCOUNT_CHOOSER_URL}?${params.toString()}`;
+}
+
+/**
+ * UTM campaign identifiers per the design doc.
+ */
+export const G1_UTM_CAMPAIGNS = {
+  /** From Interception Flow "Manage" link (user has credits) */
+  MANAGE_ACTIVITY: 'hydrogen_cli_settings_ai_credits_activity_page',
+  /** From "Manage" to add more credits */
+  MANAGE_ADD_CREDITS: 'hydrogen_cli_settings_add_credits',
+  /** From Empty Wallet Flow "Get AI Credits" link */
+  EMPTY_WALLET_ADD_CREDITS: 'hydrogen_cli_insufficient_credits_add_credits',
+} as const;
+
+/**
+ * Builds a G1 AI URL with UTM tracking parameters.
+ * @param path The path segment (e.g., 'activity' or 'credits')
+ * @param email User's email for AccountChooser wrapper
+ * @param campaign The UTM campaign identifier
+ * @returns The complete URL wrapped in AccountChooser
+ */
+export function buildG1Url(
+  path: 'activity' | 'credits',
+  email: string,
+  campaign: string,
+): string {
+  const baseUrl = `${G1_AI_BASE_URL}/${path}`;
+  const params = new URLSearchParams({
+    utm_source: UTM_SOURCE,
+    utm_medium: UTM_MEDIUM,
+    utm_campaign: campaign,
+  });
+  const urlWithUtm = `${baseUrl}?${params.toString()}`;
+  return wrapInAccountChooser(email, urlWithUtm);
+}
+
+/**
+ * Extracts the G1 AI credit balance from a tier's available credits.
+ * @param tier The user tier to check
+ * @returns The credit amount as a number, 0 if eligible but empty, or null if not eligible
+ */
+export function getG1CreditBalance(
+  tier: GeminiUserTier | null | undefined,
+): number | null {
+  if (!tier?.availableCredits) {
+    return null;
+  }
+
+  const g1Credits = tier.availableCredits.filter(
+    (credit: AvailableCredits) => credit.creditType === G1_CREDIT_TYPE,
+  );
+
+  if (g1Credits.length === 0) {
+    return null;
+  }
+
+  // creditAmount is an int64 represented as string; sum all matching entries
+  return g1Credits.reduce((sum, credit) => {
+    const amount = parseInt(credit.creditAmount ?? '0', 10);
+    return sum + (isNaN(amount) ? 0 : amount);
+  }, 0);
+}
+
+export const MIN_CREDIT_BALANCE = 50;
+
+/**
+ * Determines if credits should be automatically used based on the overage strategy.
+ * @param strategy The configured overage strategy
+ * @param creditBalance The available credit balance
+ * @returns true if credits should be auto-used, false otherwise
+ */
+export function shouldAutoUseCredits(
+  strategy: OverageStrategy,
+  creditBalance: number | null,
+): boolean {
+  return (
+    strategy === 'always' &&
+    creditBalance != null &&
+    creditBalance >= MIN_CREDIT_BALANCE
+  );
+}
+
+/**
+ * Determines if the overage menu should be shown based on the strategy.
+ * @param strategy The configured overage strategy
+ * @param creditBalance The available credit balance
+ * @returns true if the menu should be shown
+ */
+export function shouldShowOverageMenu(
+  strategy: OverageStrategy,
+  creditBalance: number | null,
+): boolean {
+  return (
+    strategy === 'ask' &&
+    creditBalance != null &&
+    creditBalance >= MIN_CREDIT_BALANCE
+  );
+}
+
+/**
+ * Determines if the empty wallet menu should be shown.
+ * @param strategy The configured overage strategy
+ * @param creditBalance The available credit balance
+ * @returns true if the empty wallet menu should be shown
+ */
+export function shouldShowEmptyWalletMenu(
+  strategy: OverageStrategy,
+  creditBalance: number | null,
+): boolean {
+  return (
+    strategy !== 'never' &&
+    creditBalance != null &&
+    creditBalance < MIN_CREDIT_BALANCE
+  );
+}
diff --git a/packages/core/src/billing/index.ts b/packages/core/src/billing/index.ts
new file mode 100644
index 0000000000..6f0ca8d33e
--- /dev/null
+++ b/packages/core/src/billing/index.ts
@@ -0,0 +1,7 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+export * from './billing.js';
diff --git a/packages/core/src/code_assist/codeAssist.test.ts b/packages/core/src/code_assist/codeAssist.test.ts
index 0e24f51feb..3fe1d45583 100644
--- a/packages/core/src/code_assist/codeAssist.test.ts
+++ b/packages/core/src/code_assist/codeAssist.test.ts
@@ -73,6 +73,8 @@ describe('codeAssist', () => {
         'session-123',
         'free-tier',
         'free-tier-name',
+        undefined,
+        mockConfig,
       );
       expect(generator).toBeInstanceOf(MockedCodeAssistServer);
     });
@@ -103,6 +105,8 @@ describe('codeAssist', () => {
         undefined, // No session ID
         'free-tier',
         'free-tier-name',
+        undefined,
+        mockConfig,
       );
       expect(generator).toBeInstanceOf(MockedCodeAssistServer);
     });
diff --git a/packages/core/src/code_assist/codeAssist.ts b/packages/core/src/code_assist/codeAssist.ts
index 5d41b28c24..caec96a4a3 100644
--- a/packages/core/src/code_assist/codeAssist.ts
+++ b/packages/core/src/code_assist/codeAssist.ts
@@ -36,6 +36,8 @@ export async function createCodeAssistContentGenerator(
       sessionId,
       userData.userTier,
       userData.userTierName,
+      userData.paidTier,
+      config,
     );
   }
 
diff --git a/packages/core/src/code_assist/converter.test.ts b/packages/core/src/code_assist/converter.test.ts
index 21fecec547..674bbaf70e 100644
--- a/packages/core/src/code_assist/converter.test.ts
+++ b/packages/core/src/code_assist/converter.test.ts
@@ -246,7 +246,7 @@ describe('converter', () => {
       };
       const genaiRes = fromGenerateContentResponse(codeAssistRes);
       expect(genaiRes).toBeInstanceOf(GenerateContentResponse);
-      expect(genaiRes.candidates).toEqual(codeAssistRes.response.candidates);
+      expect(genaiRes.candidates).toEqual(codeAssistRes.response!.candidates);
     });
 
     it('should handle prompt feedback and usage metadata', () => {
@@ -266,10 +266,10 @@ describe('converter', () => {
       };
       const genaiRes = fromGenerateContentResponse(codeAssistRes);
       expect(genaiRes.promptFeedback).toEqual(
-        codeAssistRes.response.promptFeedback,
+        codeAssistRes.response!.promptFeedback,
       );
       expect(genaiRes.usageMetadata).toEqual(
-        codeAssistRes.response.usageMetadata,
+        codeAssistRes.response!.usageMetadata,
       );
     });
 
@@ -296,7 +296,7 @@ describe('converter', () => {
       };
       const genaiRes = fromGenerateContentResponse(codeAssistRes);
       expect(genaiRes.automaticFunctionCallingHistory).toEqual(
-        codeAssistRes.response.automaticFunctionCallingHistory,
+        codeAssistRes.response!.automaticFunctionCallingHistory,
       );
     });
 
diff --git a/packages/core/src/code_assist/converter.ts b/packages/core/src/code_assist/converter.ts
index 1d41101f31..81bda4adc6 100644
--- a/packages/core/src/code_assist/converter.ts
+++ b/packages/core/src/code_assist/converter.ts
@@ -27,12 +27,15 @@ import type {
   ToolConfig,
 } from '@google/genai';
 import { GenerateContentResponse } from '@google/genai';
+import { debugLogger } from '../utils/debugLogger.js';
+import type { Credits } from './types.js';
 
 export interface CAGenerateContentRequest {
   model: string;
   project?: string;
   user_prompt_id?: string;
   request: VertexGenerateContentRequest;
+  enabled_credit_types?: string[];
 }
 
 interface VertexGenerateContentRequest {
@@ -72,12 +75,14 @@ interface VertexGenerationConfig {
 }
 
 export interface CaGenerateContentResponse {
-  response: VertexGenerateContentResponse;
+  response?: VertexGenerateContentResponse;
   traceId?: string;
+  consumedCredits?: Credits[];
+  remainingCredits?: Credits[];
 }
 
 interface VertexGenerateContentResponse {
-  candidates: Candidate[];
+  candidates?: Candidate[];
   automaticFunctionCallingHistory?: Content[];
   promptFeedback?: GenerateContentResponsePromptFeedback;
   usageMetadata?: GenerateContentResponseUsageMetadata;
@@ -94,7 +99,7 @@ interface VertexCountTokenRequest {
 }
 
 export interface CaCountTokenResponse {
-  totalTokens: number;
+  totalTokens?: number;
 }
 
 export function toCountTokenRequest(
@@ -111,8 +116,13 @@ export function toCountTokenRequest(
 export function fromCountTokenResponse(
   res: CaCountTokenResponse,
 ): CountTokensResponse {
+  if (res.totalTokens === undefined) {
+    debugLogger.warn(
+      'Warning: Code Assist API did not return totalTokens. Defaulting to 0.',
+    );
+  }
   return {
-    totalTokens: res.totalTokens,
+    totalTokens: res.totalTokens ?? 0,
   };
 }
 
@@ -121,12 +131,14 @@ export function toGenerateContentRequest(
   userPromptId: string,
   project?: string,
   sessionId?: string,
+  enabledCreditTypes?: string[],
 ): CAGenerateContentRequest {
   return {
     model: req.model,
     project,
     user_prompt_id: userPromptId,
     request: toVertexGenerateContentRequest(req, sessionId),
+    enabled_credit_types: enabledCreditTypes,
   };
 }
 
@@ -299,3 +311,16 @@ function toVertexGenerationConfig(
     thinkingConfig: config.thinkingConfig,
   };
 }
+
+export function fromGenerateContentResponseUsage(
+  metadata?: GenerateContentResponseUsageMetadata,
+): GenerateContentResponseUsageMetadata | undefined {
+  if (!metadata) {
+    return undefined;
+  }
+  return {
+    promptTokenCount: metadata.promptTokenCount,
+    candidatesTokenCount: metadata.candidatesTokenCount,
+    totalTokenCount: metadata.totalTokenCount,
+  };
+}
diff --git a/packages/core/src/code_assist/server.test.ts b/packages/core/src/code_assist/server.test.ts
index aa5cbae7fe..63566c4662 100644
--- a/packages/core/src/code_assist/server.test.ts
+++ b/packages/core/src/code_assist/server.test.ts
@@ -84,6 +84,7 @@ describe('CodeAssistServer', () => {
       body: expect.any(String),
       signal: undefined,
       retryConfig: {
+        retryDelay: 1000,
         retry: 3,
         noResponseRetries: 3,
         statusCodesToRetry: [
@@ -410,15 +411,7 @@ describe('CodeAssistServer', () => {
         'Content-Type': 'application/json',
       },
       signal: undefined,
-      retryConfig: {
-        retry: 3,
-        noResponseRetries: 3,
-        statusCodesToRetry: [
-          [429, 429],
-          [499, 499],
-          [500, 599],
-        ],
-      },
+      retry: false,
     });
 
     expect(results).toHaveLength(2);
diff --git a/packages/core/src/code_assist/server.ts b/packages/core/src/code_assist/server.ts
index dfcc693ca7..dbb749e45d 100644
--- a/packages/core/src/code_assist/server.ts
+++ b/packages/core/src/code_assist/server.ts
@@ -21,7 +21,10 @@ import type {
   ConversationInteraction,
   StreamingLatency,
   RecordCodeAssistMetricsRequest,
+  GeminiUserTier,
+  Credits,
 } from './types.js';
+import { UserTierId } from './types.js';
 import type {
   ListExperimentsRequest,
   ListExperimentsResponse,
@@ -37,7 +40,15 @@ import type {
 import * as readline from 'node:readline';
 import { Readable } from 'node:stream';
 import type { ContentGenerator } from '../core/contentGenerator.js';
-import { UserTierId } from './types.js';
+import type { Config } from '../config/config.js';
+import {
+  G1_CREDIT_TYPE,
+  getG1CreditBalance,
+  isOverageEligibleModel,
+  shouldAutoUseCredits,
+} from '../billing/billing.js';
+import { logBillingEvent } from '../telemetry/loggers.js';
+import { CreditsUsedEvent } from '../telemetry/billingEvents.js';
 import type {
   CaCountTokenResponse,
   CaGenerateContentResponse,
@@ -62,6 +73,7 @@ export interface HttpOptions {
 
 export const CODE_ASSIST_ENDPOINT = 'https://cloudcode-pa.googleapis.com';
 export const CODE_ASSIST_API_VERSION = 'v1internal';
+const GENERATE_CONTENT_RETRY_DELAY_IN_MILLISECONDS = 1000;
 
 export class CodeAssistServer implements ContentGenerator {
   constructor(
@@ -71,6 +83,8 @@ export class CodeAssistServer implements ContentGenerator {
     readonly sessionId?: string,
     readonly userTier?: UserTierId,
     readonly userTierName?: string,
+    readonly paidTier?: GeminiUserTier,
+    readonly config?: Config,
   ) {}
 
   async generateContentStream(
@@ -79,6 +93,19 @@ export class CodeAssistServer implements ContentGenerator {
     // eslint-disable-next-line @typescript-eslint/no-unused-vars
     role: LlmRole,
   ): Promise<AsyncGenerator<GenerateContentResponse>> {
+    const autoUse = this.config
+      ? shouldAutoUseCredits(
+          this.config.getBillingSettings().overageStrategy,
+          getG1CreditBalance(this.paidTier),
+        )
+      : false;
+    const modelIsEligible = isOverageEligibleModel(req.model);
+    const shouldEnableCredits = modelIsEligible && autoUse;
+
+    const enabledCreditTypes = shouldEnableCredits
+      ? ([G1_CREDIT_TYPE] as string[])
+      : undefined;
+
     const responses =
       await this.requestStreamingPost<CaGenerateContentResponse>(
         'streamGenerateContent',
@@ -87,6 +114,7 @@ export class CodeAssistServer implements ContentGenerator {
           userPromptId,
           this.projectId,
           this.sessionId,
+          enabledCreditTypes,
         ),
         req.config?.abortSignal,
       );
@@ -98,6 +126,9 @@ export class CodeAssistServer implements ContentGenerator {
     return (async function* (
       server: CodeAssistServer,
     ): AsyncGenerator<GenerateContentResponse> {
+      let totalConsumed = 0;
+      let lastRemaining = 0;
+
       for await (const response of responses) {
         if (isFirst) {
           streamingLatency.firstMessageLatency = formatProtoJsonDuration(
@@ -120,8 +151,38 @@ export class CodeAssistServer implements ContentGenerator {
           req.config?.abortSignal,
         );
 
+        if (response.consumedCredits) {
+          for (const credit of response.consumedCredits) {
+            if (credit.creditType === G1_CREDIT_TYPE && credit.creditAmount) {
+              totalConsumed += parseInt(credit.creditAmount, 10) || 0;
+            }
+          }
+        }
+        if (response.remainingCredits) {
+          // Sum all G1 credit entries for consistency with getG1CreditBalance
+          lastRemaining = response.remainingCredits.reduce((sum, credit) => {
+            if (credit.creditType === G1_CREDIT_TYPE && credit.creditAmount) {
+              return sum + (parseInt(credit.creditAmount, 10) || 0);
+            }
+            return sum;
+          }, 0);
+          server.updateCredits(response.remainingCredits);
+        }
+
         yield translatedResponse;
       }
+
+      // Emit credits used telemetry after the stream completes
+      if (totalConsumed > 0 && server.config) {
+        logBillingEvent(
+          server.config,
+          new CreditsUsedEvent(
+            req.model ?? 'unknown',
+            totalConsumed,
+            lastRemaining,
+          ),
+        );
+      }
     })(this);
   }
 
@@ -139,8 +200,10 @@ export class CodeAssistServer implements ContentGenerator {
         userPromptId,
         this.projectId,
         this.sessionId,
+        undefined,
       ),
       req.config?.abortSignal,
+      GENERATE_CONTENT_RETRY_DELAY_IN_MILLISECONDS,
     );
     const duration = formatProtoJsonDuration(Date.now() - start);
     const streamingLatency: StreamingLatency = {
@@ -158,9 +221,29 @@ export class CodeAssistServer implements ContentGenerator {
       req.config?.abortSignal,
     );
 
+    if (response.remainingCredits) {
+      this.updateCredits(response.remainingCredits);
+    }
+
     return translatedResponse;
   }
 
+  private updateCredits(remainingCredits: Credits[]): void {
+    if (!this.paidTier) {
+      return;
+    }
+
+    // Replace the G1 credits entries with the latest remaining amounts.
+    // Non-G1 credits are preserved as-is.
+    const nonG1Credits = (this.paidTier.availableCredits ?? []).filter(
+      (c) => c.creditType !== G1_CREDIT_TYPE,
+    );
+    const updatedG1Credits = remainingCredits.filter(
+      (c) => c.creditType === G1_CREDIT_TYPE,
+    );
+    this.paidTier.availableCredits = [...nonG1Credits, ...updatedG1Credits];
+  }
+
   async onboardUser(
     req: OnboardUserRequest,
   ): Promise<LongRunningOperationResponse> {
@@ -190,6 +273,25 @@ export class CodeAssistServer implements ContentGenerator {
     }
   }
 
+  async refreshAvailableCredits(): Promise<void> {
+    if (!this.paidTier) {
+      return;
+    }
+    const res = await this.loadCodeAssist({
+      cloudaicompanionProject: this.projectId,
+      metadata: {
+        ideType: 'IDE_UNSPECIFIED',
+        platform: 'PLATFORM_UNSPECIFIED',
+        pluginType: 'GEMINI',
+        duetProject: this.projectId,
+      },
+      mode: 'HEALTH_CHECK',
+    });
+    if (res.paidTier?.availableCredits) {
+      this.paidTier.availableCredits = res.paidTier.availableCredits;
+    }
+  }
+
   async fetchAdminControls(
     req: FetchAdminControlsRequest,
   ): Promise<FetchAdminControlsResponse> {
@@ -294,6 +396,7 @@ export class CodeAssistServer implements ContentGenerator {
     method: string,
     req: object,
     signal?: AbortSignal,
+    retryDelay: number = 100,
   ): Promise<T> {
     const res = await this.client.request<T>({
       url: this.getMethodUrl(method),
@@ -306,6 +409,7 @@ export class CodeAssistServer implements ContentGenerator {
       body: JSON.stringify(req),
       signal,
       retryConfig: {
+        retryDelay,
         retry: 3,
         noResponseRetries: 3,
         statusCodesToRetry: [
@@ -361,15 +465,7 @@ export class CodeAssistServer implements ContentGenerator {
       responseType: 'stream',
       body: JSON.stringify(req),
       signal,
-      retryConfig: {
-        retry: 3,
-        noResponseRetries: 3,
-        statusCodesToRetry: [
-          [429, 429],
-          [499, 499],
-          [500, 599],
-        ],
-      },
+      retry: false,
     });
 
     return (async function* (): AsyncGenerator<T> {
diff --git a/packages/core/src/code_assist/setup.ts b/packages/core/src/code_assist/setup.ts
index 895fabb6bc..3da24c5d05 100644
--- a/packages/core/src/code_assist/setup.ts
+++ b/packages/core/src/code_assist/setup.ts
@@ -18,6 +18,7 @@ import type { AuthClient } from 'google-auth-library';
 import type { ValidationHandler } from '../fallback/types.js';
 import { ChangeAuthRequestedError } from '../utils/errors.js';
 import { ValidationRequiredError } from '../utils/googleQuotaErrors.js';
+import { debugLogger } from '../utils/debugLogger.js';
 
 export class ProjectIdRequiredError extends Error {
   constructor() {
@@ -51,6 +52,7 @@ export interface UserData {
   projectId: string;
   userTier: UserTierId;
   userTierName?: string;
+  paidTier?: GeminiUserTier;
 }
 
 /**
@@ -130,12 +132,22 @@ export async function setupUser(
   }
 
   if (loadRes.currentTier) {
+    if (!loadRes.paidTier?.id && !loadRes.currentTier.id) {
+      debugLogger.warn(
+        'Warning: Code Assist API did not return a user tier ID. Defaulting to STANDARD tier.',
+      );
+    }
+
     if (!loadRes.cloudaicompanionProject) {
       if (projectId) {
         return {
           projectId,
-          userTier: loadRes.paidTier?.id ?? loadRes.currentTier.id,
+          userTier:
+            loadRes.paidTier?.id ??
+            loadRes.currentTier.id ??
+            UserTierId.STANDARD,
           userTierName: loadRes.paidTier?.name ?? loadRes.currentTier.name,
+          paidTier: loadRes.paidTier ?? undefined,
         };
       }
 
@@ -144,13 +156,21 @@ export async function setupUser(
     }
     return {
       projectId: loadRes.cloudaicompanionProject,
-      userTier: loadRes.paidTier?.id ?? loadRes.currentTier.id,
+      userTier:
+        loadRes.paidTier?.id ?? loadRes.currentTier.id ?? UserTierId.STANDARD,
       userTierName: loadRes.paidTier?.name ?? loadRes.currentTier.name,
+      paidTier: loadRes.paidTier ?? undefined,
     };
   }
 
   const tier = getOnboardTier(loadRes);
 
+  if (!tier.id) {
+    debugLogger.warn(
+      'Warning: Code Assist API did not return an onboarding tier ID. Defaulting to STANDARD tier.',
+    );
+  }
+
   let onboardReq: OnboardUserRequest;
   if (tier.id === UserTierId.FREE) {
     // The free tier uses a managed google cloud project. Setting a project in the `onboardUser` request causes a `Precondition Failed` error.
@@ -183,7 +203,7 @@ export async function setupUser(
     if (projectId) {
       return {
         projectId,
-        userTier: tier.id,
+        userTier: tier.id ?? UserTierId.STANDARD,
         userTierName: tier.name,
       };
     }
@@ -193,7 +213,7 @@ export async function setupUser(
 
   return {
     projectId: lroRes.response.cloudaicompanionProject.id,
-    userTier: tier.id,
+    userTier: tier.id ?? UserTierId.STANDARD,
     userTierName: tier.name,
   };
 }
diff --git a/packages/core/src/code_assist/types.ts b/packages/core/src/code_assist/types.ts
index 0e2f353aa3..2e680f57e3 100644
--- a/packages/core/src/code_assist/types.ts
+++ b/packages/core/src/code_assist/types.ts
@@ -39,11 +39,41 @@ export type ClientMetadataPluginType =
   | 'AIPLUGIN_INTELLIJ'
   | 'AIPLUGIN_STUDIO';
 
+/**
+ * Credit types that can be used for API consumption.
+ */
+export type CreditType = 'CREDIT_TYPE_UNSPECIFIED' | 'GOOGLE_ONE_AI';
+
+/**
+ * Represents a credit amount for a specific credit type.
+ * Used in LoadCodeAssistResponse for available credits and
+ * in GenerateContentResponse for consumed/remaining credits.
+ */
+export interface Credits {
+  creditType: CreditType;
+  creditAmount: string; // int64 represented as string in JSON
+}
+
+/** Alias for Credits used in available_credits context */
+export type AvailableCredits = Credits;
+
+/** Alias for Credits used in consumedCredits context */
+export type ConsumedCredits = Credits;
+
+/** Alias for Credits used in remainingCredits context */
+export type RemainingCredits = Credits;
+
 export interface LoadCodeAssistRequest {
   cloudaicompanionProject?: string;
   metadata: ClientMetadata;
+  mode?: LoadCodeAssistMode;
 }
 
+export type LoadCodeAssistMode =
+  | 'MODE_UNSPECIFIED'
+  | 'FULL_ELIGIBILITY_CHECK'
+  | 'HEALTH_CHECK';
+
 /**
  * Represents LoadCodeAssistResponse proto json field
  * http://google3/google/internal/cloud/code/v1internal/cloudcode.proto;l=224
@@ -60,7 +90,7 @@ export interface LoadCodeAssistResponse {
  * GeminiUserTier reflects the structure received from the CodeAssist when calling LoadCodeAssist.
  */
 export interface GeminiUserTier {
-  id: UserTierId;
+  id?: UserTierId;
   name?: string;
   description?: string;
   // This value is used to declare whether a given tier requires the user to configure the project setting on the IDE settings or not.
@@ -69,6 +99,8 @@ export interface GeminiUserTier {
   privacyNotice?: PrivacyNotice;
   hasAcceptedTos?: boolean;
   hasOnboardedPreviously?: boolean;
+  /** Available AI credits for this tier (e.g., Google One AI credits) */
+  availableCredits?: AvailableCredits[];
 }
 
 /**
@@ -79,10 +111,10 @@ export interface GeminiUserTier {
  * @param tierName name of the tier.
  */
 export interface IneligibleTier {
-  reasonCode: IneligibleTierReasonCode;
-  reasonMessage: string;
-  tierId: UserTierId;
-  tierName: string;
+  reasonCode?: IneligibleTierReasonCode;
+  reasonMessage?: string;
+  tierId?: UserTierId;
+  tierName?: string;
   validationErrorMessage?: string;
   validationUrl?: string;
   validationUrlLinkText?: string;
@@ -127,7 +159,7 @@ export type UserTierId = (typeof UserTierId)[keyof typeof UserTierId] | string;
  * privacy notice.
  */
 export interface PrivacyNotice {
-  showNotice: boolean;
+  showNotice?: boolean;
   noticeText?: string;
 }
 
@@ -145,7 +177,7 @@ export interface OnboardUserRequest {
  * http://google3/google/longrunning/operations.proto;rcl=698857719;l=107
  */
 export interface LongRunningOperationResponse {
-  name: string;
+  name?: string;
   done?: boolean;
   response?: OnboardUserResponse;
 }
@@ -157,8 +189,8 @@ export interface LongRunningOperationResponse {
 export interface OnboardUserResponse {
   // tslint:disable-next-line:enforce-name-casing This is the name of the field in the proto.
   cloudaicompanionProject?: {
-    id: string;
-    name: string;
+    id?: string;
+    name?: string;
   };
 }
 
@@ -195,7 +227,7 @@ export interface SetCodeAssistGlobalUserSettingRequest {
 
 export interface CodeAssistGlobalUserSettingResponse {
   cloudaicompanionProject?: string;
-  freeTierDataCollectionOptin: boolean;
+  freeTierDataCollectionOptin?: boolean;
 }
 
 /**
diff --git a/packages/core/src/config/config.ts b/packages/core/src/config/config.ts
index a8c7cb28f8..e05e8ee678 100644
--- a/packages/core/src/config/config.ts
+++ b/packages/core/src/config/config.ts
@@ -13,6 +13,7 @@ import type {
   ContentGenerator,
   ContentGeneratorConfig,
 } from '../core/contentGenerator.js';
+import type { OverageStrategy } from '../billing/billing.js';
 import {
   AuthType,
   createContentGenerator,
@@ -116,6 +117,7 @@ import {
 import { HookSystem } from '../hooks/index.js';
 import type {
   UserTierId,
+  GeminiUserTier,
   RetrieveUserQuotaResponse,
   AdminControlsSettings,
 } from '../code_assist/types.js';
@@ -365,6 +367,7 @@ import {
   SimpleExtensionLoader,
 } from '../utils/extensionLoader.js';
 import { McpClientManager } from '../tools/mcp-client-manager.js';
+import { type McpContext } from '../tools/mcp-client.js';
 import type { EnvironmentSanitizationConfig } from '../services/environmentSanitization.js';
 import { getErrorMessage } from '../utils/errors.js';
 import {
@@ -574,9 +577,12 @@ export interface ConfigParameters {
     agents?: AgentSettings;
   }>;
   enableConseca?: boolean;
+  billing?: {
+    overageStrategy?: OverageStrategy;
+  };
 }
 
-export class Config {
+export class Config implements McpContext {
   private toolRegistry!: ToolRegistry;
   private mcpClientManager?: McpClientManager;
   private allowedMcpServers: string[];
@@ -755,6 +761,10 @@ export class Config {
       }>)
     | undefined;
 
+  private readonly billing: {
+    overageStrategy: OverageStrategy;
+  };
+
   private readonly enableAgents: boolean;
   private agents: AgentSettings;
   private readonly enableEventDrivenScheduler: boolean;
@@ -1002,6 +1012,10 @@ export class Config {
     this.onModelChange = params.onModelChange;
     this.onReload = params.onReload;
 
+    this.billing = {
+      overageStrategy: params.billing?.overageStrategy ?? 'ask',
+    };
+
     if (params.contextFileName) {
       setGeminiMdFilename(params.contextFileName);
     }
@@ -1265,6 +1279,10 @@ export class Config {
     return this.contentGenerator?.userTierName;
   }
 
+  getUserPaidTier(): GeminiUserTier | undefined {
+    return this.contentGenerator?.paidTier;
+  }
+
   /**
    * Provides access to the BaseLlmClient for stateless LLM operations.
    */
@@ -1579,6 +1597,19 @@ export class Config {
     this.hasAccessToPreviewModel = hasAccess;
   }
 
+  async refreshAvailableCredits(): Promise<void> {
+    const codeAssistServer = getCodeAssistServer(this);
+    if (!codeAssistServer) {
+      return;
+    }
+    try {
+      await codeAssistServer.refreshAvailableCredits();
+    } catch {
+      // Non-fatal: proceed even if refresh fails.
+      // The actual credit balance will be verified server-side.
+    }
+  }
+
   async refreshUserQuota(): Promise<RetrieveUserQuotaResponse | undefined> {
     const codeAssistServer = getCodeAssistServer(this);
     if (!codeAssistServer || !codeAssistServer.projectId) {
@@ -1740,6 +1771,33 @@ export class Config {
     return this.mcpClientManager;
   }
 
+  setUserInteractedWithMcp(): void {
+    this.mcpClientManager?.setUserInteractedWithMcp();
+  }
+
+  /** @deprecated Use getMcpClientManager().getLastError() directly */
+  getLastMcpError(serverName: string): string | undefined {
+    return this.mcpClientManager?.getLastError(serverName);
+  }
+
+  emitMcpDiagnostic(
+    severity: 'info' | 'warning' | 'error',
+    message: string,
+    error?: unknown,
+    serverName?: string,
+  ): void {
+    if (this.mcpClientManager) {
+      this.mcpClientManager.emitDiagnostic(
+        severity,
+        message,
+        error,
+        serverName,
+      );
+    } else {
+      coreEvents.emitFeedback(severity, message, error);
+    }
+  }
+
   getAllowedMcpServers(): string[] | undefined {
     return this.allowedMcpServers;
   }
@@ -2053,6 +2111,19 @@ export class Config {
     return this.telemetrySettings.outfile;
   }
 
+  getBillingSettings(): { overageStrategy: OverageStrategy } {
+    return this.billing;
+  }
+
+  /**
+   * Updates the overage strategy at runtime.
+   * Used to switch from 'ask' to 'always' after the user accepts credits
+   * via the overage dialog, so subsequent API calls auto-include credits.
+   */
+  setOverageStrategy(strategy: OverageStrategy): void {
+    this.billing.overageStrategy = strategy;
+  }
+
   getTelemetryUseCollector(): boolean {
     return this.telemetrySettings.useCollector ?? false;
   }
diff --git a/packages/core/src/config/storage.ts b/packages/core/src/config/storage.ts
index e8530887b3..10e88543ba 100644
--- a/packages/core/src/config/storage.ts
+++ b/packages/core/src/config/storage.ts
@@ -169,10 +169,7 @@ export class Storage {
   }
 
   getAutoSavedPolicyPath(): string {
-    return path.join(
-      this.getWorkspacePoliciesDir(),
-      AUTO_SAVED_POLICY_FILENAME,
-    );
+    return path.join(Storage.getUserPoliciesDir(), AUTO_SAVED_POLICY_FILENAME);
   }
 
   ensureProjectTempDirExists(): void {
diff --git a/packages/core/src/core/__snapshots__/prompts.test.ts.snap b/packages/core/src/core/__snapshots__/prompts.test.ts.snap
index 30603b5443..438251ed1f 100644
--- a/packages/core/src/core/__snapshots__/prompts.test.ts.snap
+++ b/packages/core/src/core/__snapshots__/prompts.test.ts.snap
@@ -152,7 +152,7 @@ Use the \`exit_plan_mode\` tool to present the plan and formally request approva
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -326,7 +326,7 @@ An approved plan is available for this task at \`/tmp/plans/feature-x.md\`.
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -607,7 +607,7 @@ Use the \`exit_plan_mode\` tool to present the plan and formally request approva
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -758,7 +758,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -897,7 +897,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -1019,7 +1019,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -1656,7 +1656,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -1807,7 +1807,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -1962,7 +1962,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -2117,7 +2117,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -2268,7 +2268,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -2411,7 +2411,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -2561,7 +2561,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -2712,7 +2712,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -3104,7 +3104,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -3255,7 +3255,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -3518,7 +3518,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
@@ -3669,7 +3669,7 @@ Operate using a **Research -> Strategy -> Execution** lifecycle. For the Executi
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with \`run_shell_command\` that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use \`ask_user\` to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
diff --git a/packages/core/src/core/contentGenerator.ts b/packages/core/src/core/contentGenerator.ts
index 29f2ff03df..d9bb02a230 100644
--- a/packages/core/src/core/contentGenerator.ts
+++ b/packages/core/src/core/contentGenerator.ts
@@ -17,7 +17,7 @@ import { createCodeAssistContentGenerator } from '../code_assist/codeAssist.js';
 import type { Config } from '../config/config.js';
 import { loadApiKey } from './apiKeyCredentialStorage.js';
 
-import type { UserTierId } from '../code_assist/types.js';
+import type { UserTierId, GeminiUserTier } from '../code_assist/types.js';
 import { LoggingContentGenerator } from './loggingContentGenerator.js';
 import { InstallationManager } from '../utils/installationManager.js';
 import { FakeContentGenerator } from './fakeContentGenerator.js';
@@ -49,6 +49,8 @@ export interface ContentGenerator {
   userTier?: UserTierId;
 
   userTierName?: string;
+
+  paidTier?: GeminiUserTier;
 }
 
 export enum AuthType {
diff --git a/packages/core/src/core/fakeContentGenerator.ts b/packages/core/src/core/fakeContentGenerator.ts
index c765bde087..9ecd75a99d 100644
--- a/packages/core/src/core/fakeContentGenerator.ts
+++ b/packages/core/src/core/fakeContentGenerator.ts
@@ -14,7 +14,7 @@ import {
 } from '@google/genai';
 import { promises } from 'node:fs';
 import type { ContentGenerator } from './contentGenerator.js';
-import type { UserTierId } from '../code_assist/types.js';
+import type { UserTierId, GeminiUserTier } from '../code_assist/types.js';
 import { safeJsonStringify } from '../utils/safeJsonStringify.js';
 import type { LlmRole } from '../telemetry/types.js';
 
@@ -44,6 +44,7 @@ export class FakeContentGenerator implements ContentGenerator {
   private callCounter = 0;
   userTier?: UserTierId;
   userTierName?: string;
+  paidTier?: GeminiUserTier;
 
   constructor(private readonly responses: FakeResponse[]) {}
 
diff --git a/packages/core/src/core/loggingContentGenerator.ts b/packages/core/src/core/loggingContentGenerator.ts
index c1ec554d6d..5679c03a52 100644
--- a/packages/core/src/core/loggingContentGenerator.ts
+++ b/packages/core/src/core/loggingContentGenerator.ts
@@ -24,7 +24,7 @@ import {
 } from '../telemetry/types.js';
 import type { LlmRole } from '../telemetry/llmRole.js';
 import type { Config } from '../config/config.js';
-import type { UserTierId } from '../code_assist/types.js';
+import type { UserTierId, GeminiUserTier } from '../code_assist/types.js';
 import {
   logApiError,
   logApiRequest,
@@ -163,6 +163,10 @@ export class LoggingContentGenerator implements ContentGenerator {
     return this.wrapped.userTierName;
   }
 
+  get paidTier(): GeminiUserTier | undefined {
+    return this.wrapped.paidTier;
+  }
+
   private logApiRequest(
     contents: Content[],
     model: string,
diff --git a/packages/core/src/fallback/handler.ts b/packages/core/src/fallback/handler.ts
index eb4bdf8f0b..ed87454003 100644
--- a/packages/core/src/fallback/handler.ts
+++ b/packages/core/src/fallback/handler.ts
@@ -140,6 +140,9 @@ async function processIntent(
       // based on the availability service state (which is updated before this).
       return true;
 
+    case 'retry_with_credits':
+      return true;
+
     case 'stop':
       // Do not switch model on stop. User wants to stay on current model (and stop).
       return false;
diff --git a/packages/core/src/fallback/types.ts b/packages/core/src/fallback/types.ts
index 222c7d72a6..0aed77584a 100644
--- a/packages/core/src/fallback/types.ts
+++ b/packages/core/src/fallback/types.ts
@@ -17,6 +17,7 @@ import type {
 export type FallbackIntent =
   | 'retry_always' // Retry with fallback model and stick to it for future requests.
   | 'retry_once' // Retry with fallback model for this request only.
+  | 'retry_with_credits' // Retry the current request using Google One AI credits (and potentially future ones if strategy is 'always').
   | 'stop' // Switch to fallback for future requests, but stop the current request.
   | 'retry_later' // Stop the current request and do not fallback. Intend to try again later with the same model.
   | 'upgrade'; // Give user an option to upgrade the tier.
diff --git a/packages/core/src/index.ts b/packages/core/src/index.ts
index 76083c2d74..88f6d7552e 100644
--- a/packages/core/src/index.ts
+++ b/packages/core/src/index.ts
@@ -18,6 +18,7 @@ export * from './policy/policy-engine.js';
 export * from './policy/toml-loader.js';
 export * from './policy/config.js';
 export * from './policy/integrity.js';
+export * from './billing/index.js';
 export * from './confirmation-bus/types.js';
 export * from './confirmation-bus/message-bus.js';
 
@@ -76,6 +77,7 @@ export * from './utils/quotaErrorDetection.js';
 export * from './utils/userAccountManager.js';
 export * from './utils/authConsent.js';
 export * from './utils/googleQuotaErrors.js';
+export * from './utils/googleErrors.js';
 export * from './utils/fileUtils.js';
 export * from './utils/planUtils.js';
 export * from './utils/approvalModeUtils.js';
@@ -98,6 +100,7 @@ export * from './utils/ignorePatterns.js';
 export * from './utils/partUtils.js';
 export * from './utils/promptIdContext.js';
 export * from './utils/thoughtUtils.js';
+export * from './utils/secure-browser-launcher.js';
 export * from './utils/debugLogger.js';
 export * from './utils/events.js';
 export * from './utils/extensionLoader.js';
@@ -184,6 +187,8 @@ export { OAuthUtils } from './mcp/oauth-utils.js';
 
 // Export telemetry functions
 export * from './telemetry/index.js';
+export * from './telemetry/billingEvents.js';
+export { logBillingEvent } from './telemetry/loggers.js';
 export { sessionId, createSessionId } from './utils/session.js';
 export * from './utils/compatibility.js';
 export * from './utils/browser.js';
diff --git a/packages/core/src/policy/config.ts b/packages/core/src/policy/config.ts
index 800006e27e..6cdfc199d2 100644
--- a/packages/core/src/policy/config.ts
+++ b/packages/core/src/policy/config.ts
@@ -516,9 +516,8 @@ export function createPolicyUpdater(
       if (message.persist) {
         persistenceQueue = persistenceQueue.then(async () => {
           try {
-            const workspacePoliciesDir = storage.getWorkspacePoliciesDir();
-            await fs.mkdir(workspacePoliciesDir, { recursive: true });
             const policyFile = storage.getAutoSavedPolicyPath();
+            await fs.mkdir(path.dirname(policyFile), { recursive: true });
 
             // Read existing file
             let existingData: { rule?: TomlRule[] } = {};
diff --git a/packages/core/src/policy/persistence.test.ts b/packages/core/src/policy/persistence.test.ts
index 43f52a956d..c5a71fdd93 100644
--- a/packages/core/src/policy/persistence.test.ts
+++ b/packages/core/src/policy/persistence.test.ts
@@ -48,14 +48,8 @@ describe('createPolicyUpdater', () => {
   it('should persist policy when persist flag is true', async () => {
     createPolicyUpdater(policyEngine, messageBus, mockStorage);
 
-    const workspacePoliciesDir = '/mock/project/.gemini/policies';
-    const policyFile = path.join(
-      workspacePoliciesDir,
-      AUTO_SAVED_POLICY_FILENAME,
-    );
-    vi.spyOn(mockStorage, 'getWorkspacePoliciesDir').mockReturnValue(
-      workspacePoliciesDir,
-    );
+    const userPoliciesDir = '/mock/user/.gemini/policies';
+    const policyFile = path.join(userPoliciesDir, AUTO_SAVED_POLICY_FILENAME);
     vi.spyOn(mockStorage, 'getAutoSavedPolicyPath').mockReturnValue(policyFile);
     (fs.mkdir as unknown as Mock).mockResolvedValue(undefined);
     (fs.readFile as unknown as Mock).mockRejectedValue(
@@ -79,8 +73,7 @@ describe('createPolicyUpdater', () => {
     // Wait for async operations (microtasks)
     await new Promise((resolve) => setTimeout(resolve, 0));
 
-    expect(mockStorage.getWorkspacePoliciesDir).toHaveBeenCalled();
-    expect(fs.mkdir).toHaveBeenCalledWith(workspacePoliciesDir, {
+    expect(fs.mkdir).toHaveBeenCalledWith(userPoliciesDir, {
       recursive: true,
     });
 
@@ -115,14 +108,8 @@ describe('createPolicyUpdater', () => {
   it('should persist policy with commandPrefix when provided', async () => {
     createPolicyUpdater(policyEngine, messageBus, mockStorage);
 
-    const workspacePoliciesDir = '/mock/project/.gemini/policies';
-    const policyFile = path.join(
-      workspacePoliciesDir,
-      AUTO_SAVED_POLICY_FILENAME,
-    );
-    vi.spyOn(mockStorage, 'getWorkspacePoliciesDir').mockReturnValue(
-      workspacePoliciesDir,
-    );
+    const userPoliciesDir = '/mock/user/.gemini/policies';
+    const policyFile = path.join(userPoliciesDir, AUTO_SAVED_POLICY_FILENAME);
     vi.spyOn(mockStorage, 'getAutoSavedPolicyPath').mockReturnValue(policyFile);
     (fs.mkdir as unknown as Mock).mockResolvedValue(undefined);
     (fs.readFile as unknown as Mock).mockRejectedValue(
@@ -168,14 +155,8 @@ describe('createPolicyUpdater', () => {
   it('should persist policy with mcpName and toolName when provided', async () => {
     createPolicyUpdater(policyEngine, messageBus, mockStorage);
 
-    const workspacePoliciesDir = '/mock/project/.gemini/policies';
-    const policyFile = path.join(
-      workspacePoliciesDir,
-      AUTO_SAVED_POLICY_FILENAME,
-    );
-    vi.spyOn(mockStorage, 'getWorkspacePoliciesDir').mockReturnValue(
-      workspacePoliciesDir,
-    );
+    const userPoliciesDir = '/mock/user/.gemini/policies';
+    const policyFile = path.join(userPoliciesDir, AUTO_SAVED_POLICY_FILENAME);
     vi.spyOn(mockStorage, 'getAutoSavedPolicyPath').mockReturnValue(policyFile);
     (fs.mkdir as unknown as Mock).mockResolvedValue(undefined);
     (fs.readFile as unknown as Mock).mockRejectedValue(
@@ -214,14 +195,8 @@ describe('createPolicyUpdater', () => {
   it('should escape special characters in toolName and mcpName', async () => {
     createPolicyUpdater(policyEngine, messageBus, mockStorage);
 
-    const workspacePoliciesDir = '/mock/project/.gemini/policies';
-    const policyFile = path.join(
-      workspacePoliciesDir,
-      AUTO_SAVED_POLICY_FILENAME,
-    );
-    vi.spyOn(mockStorage, 'getWorkspacePoliciesDir').mockReturnValue(
-      workspacePoliciesDir,
-    );
+    const userPoliciesDir = '/mock/user/.gemini/policies';
+    const policyFile = path.join(userPoliciesDir, AUTO_SAVED_POLICY_FILENAME);
     vi.spyOn(mockStorage, 'getAutoSavedPolicyPath').mockReturnValue(policyFile);
     (fs.mkdir as unknown as Mock).mockResolvedValue(undefined);
     (fs.readFile as unknown as Mock).mockRejectedValue(
diff --git a/packages/core/src/policy/policy-updater.test.ts b/packages/core/src/policy/policy-updater.test.ts
index 40780a1850..3037667949 100644
--- a/packages/core/src/policy/policy-updater.test.ts
+++ b/packages/core/src/policy/policy-updater.test.ts
@@ -50,8 +50,8 @@ describe('createPolicyUpdater', () => {
 
     messageBus = new MessageBus(policyEngine);
     mockStorage = new Storage('/mock/project');
-    vi.spyOn(mockStorage, 'getWorkspacePoliciesDir').mockReturnValue(
-      '/mock/project/.gemini/policies',
+    vi.spyOn(mockStorage, 'getAutoSavedPolicyPath').mockReturnValue(
+      '/mock/user/.gemini/policies/auto-saved.toml',
     );
   });
 
diff --git a/packages/core/src/prompts/snippets.ts b/packages/core/src/prompts/snippets.ts
index 982a366c3b..0de9b11e25 100644
--- a/packages/core/src/prompts/snippets.ts
+++ b/packages/core/src/prompts/snippets.ts
@@ -331,7 +331,7 @@ export function renderOperationalGuidelines(
 - **Handling Inability:** If unable/unwilling to fulfill a request, state so briefly without excessive justification. Offer alternatives if appropriate.
 
 ## Security and Safety Rules
-- **Explain Critical Commands:** Before executing commands with ${formatToolName(SHELL_TOOL_NAME)} that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this).
+- **Explain Critical Commands:** Before executing commands with ${formatToolName(SHELL_TOOL_NAME)} that modify the file system, codebase, or system state, you *must* provide a brief explanation of the command's purpose and potential impact. Prioritize user understanding and safety. You should not ask permission to use the tool; the user will be presented with a confirmation dialogue upon use (you do not need to tell them this). You MUST NOT use ${formatToolName(ASK_USER_TOOL_NAME)} to ask for permission to run a command.
 - **Security First:** Always apply security best practices. Never introduce code that exposes, logs, or commits secrets, API keys, or other sensitive information.
 
 ## Tool Usage
diff --git a/packages/core/src/scheduler/scheduler.ts b/packages/core/src/scheduler/scheduler.ts
index fa3b4526ad..58e4586887 100644
--- a/packages/core/src/scheduler/scheduler.ts
+++ b/packages/core/src/scheduler/scheduler.ts
@@ -29,6 +29,7 @@ import { PolicyDecision } from '../policy/types.js';
 import {
   ToolConfirmationOutcome,
   type AnyDeclarativeTool,
+  Kind,
 } from '../tools/tools.js';
 import { getToolSuggestion } from '../utils/tool-utils.js';
 import { runInDevTraceSpan } from '../telemetry/trace.js';
@@ -427,11 +428,11 @@ export class Scheduler {
         return true;
       }
 
-      // If the first tool is read-only, batch all contiguous read-only tools.
-      if (next.tool?.isReadOnly) {
+      // If the first tool is parallelizable, batch all contiguous parallelizable tools.
+      if (this._isParallelizable(next.tool)) {
         while (this.state.queueLength > 0) {
           const peeked = this.state.peekQueue();
-          if (peeked && peeked.tool?.isReadOnly) {
+          if (peeked && this._isParallelizable(peeked.tool)) {
             this.state.dequeue();
           } else {
             break;
@@ -516,6 +517,11 @@ export class Scheduler {
     return false;
   }
 
+  private _isParallelizable(tool?: AnyDeclarativeTool): boolean {
+    if (!tool) return false;
+    return tool.isReadOnly || tool.kind === Kind.Agent;
+  }
+
   private async _processValidatingCall(
     active: ValidatingToolCall,
     signal: AbortSignal,
diff --git a/packages/core/src/scheduler/scheduler_parallel.test.ts b/packages/core/src/scheduler/scheduler_parallel.test.ts
index 9febf494c0..9633784323 100644
--- a/packages/core/src/scheduler/scheduler_parallel.test.ts
+++ b/packages/core/src/scheduler/scheduler_parallel.test.ts
@@ -70,6 +70,7 @@ import { ApprovalMode, PolicyDecision } from '../policy/types.js';
 import {
   type AnyDeclarativeTool,
   type AnyToolInvocation,
+  Kind,
 } from '../tools/tools.js';
 import type {
   ToolCallRequestInfo,
@@ -124,18 +125,51 @@ describe('Scheduler Parallel Execution', () => {
     schedulerId: ROOT_SCHEDULER_ID,
   };
 
+  const agentReq1: ToolCallRequestInfo = {
+    callId: 'agent-1',
+    name: 'agent-tool-1',
+    args: { query: 'do thing 1' },
+    isClientInitiated: false,
+    prompt_id: 'p1',
+    schedulerId: ROOT_SCHEDULER_ID,
+  };
+
+  const agentReq2: ToolCallRequestInfo = {
+    callId: 'agent-2',
+    name: 'agent-tool-2',
+    args: { query: 'do thing 2' },
+    isClientInitiated: false,
+    prompt_id: 'p1',
+    schedulerId: ROOT_SCHEDULER_ID,
+  };
+
   const readTool1 = {
     name: 'read-tool-1',
+    kind: Kind.Read,
     isReadOnly: true,
     build: vi.fn(),
   } as unknown as AnyDeclarativeTool;
   const readTool2 = {
     name: 'read-tool-2',
+    kind: Kind.Read,
     isReadOnly: true,
     build: vi.fn(),
   } as unknown as AnyDeclarativeTool;
   const writeTool = {
     name: 'write-tool',
+    kind: Kind.Execute,
+    isReadOnly: false,
+    build: vi.fn(),
+  } as unknown as AnyDeclarativeTool;
+  const agentTool1 = {
+    name: 'agent-tool-1',
+    kind: Kind.Agent,
+    isReadOnly: false,
+    build: vi.fn(),
+  } as unknown as AnyDeclarativeTool;
+  const agentTool2 = {
+    name: 'agent-tool-2',
+    kind: Kind.Agent,
     isReadOnly: false,
     build: vi.fn(),
   } as unknown as AnyDeclarativeTool;
@@ -160,11 +194,19 @@ describe('Scheduler Parallel Execution', () => {
         if (name === 'read-tool-1') return readTool1;
         if (name === 'read-tool-2') return readTool2;
         if (name === 'write-tool') return writeTool;
+        if (name === 'agent-tool-1') return agentTool1;
+        if (name === 'agent-tool-2') return agentTool2;
         return undefined;
       }),
       getAllToolNames: vi
         .fn()
-        .mockReturnValue(['read-tool-1', 'read-tool-2', 'write-tool']),
+        .mockReturnValue([
+          'read-tool-1',
+          'read-tool-2',
+          'write-tool',
+          'agent-tool-1',
+          'agent-tool-2',
+        ]),
     } as unknown as Mocked<ToolRegistry>;
 
     mockConfig = {
@@ -279,6 +321,12 @@ describe('Scheduler Parallel Execution', () => {
     vi.mocked(writeTool.build).mockReturnValue(
       mockInvocation as unknown as AnyToolInvocation,
     );
+    vi.mocked(agentTool1.build).mockReturnValue(
+      mockInvocation as unknown as AnyToolInvocation,
+    );
+    vi.mocked(agentTool2.build).mockReturnValue(
+      mockInvocation as unknown as AnyToolInvocation,
+    );
   });
 
   afterEach(() => {
@@ -418,4 +466,41 @@ describe('Scheduler Parallel Execution', () => {
     expect(executionLog.indexOf('start-call-4')).toBeGreaterThan(end3);
     expect(executionLog.indexOf('start-call-5')).toBeGreaterThan(end3);
   });
+
+  it('should execute [Agent, Agent, Sequential, Parallelizable] in three waves', async () => {
+    const executionLog: string[] = [];
+
+    mockExecutor.execute.mockImplementation(async ({ call }) => {
+      const id = call.request.callId;
+      executionLog.push(`start-${id}`);
+      await new Promise<void>((resolve) => setTimeout(resolve, 10));
+      executionLog.push(`end-${id}`);
+      return {
+        status: 'success',
+        response: { callId: id, responseParts: [] },
+      } as unknown as SuccessfulToolCall;
+    });
+
+    // Schedule: agentReq1 (Parallel), agentReq2 (Parallel), req3 (Sequential/Write), req1 (Parallel/Read)
+    await scheduler.schedule([agentReq1, agentReq2, req3, req1], signal);
+
+    // Wave 1: agent-1, agent-2 (parallel)
+    expect(executionLog.slice(0, 2)).toContain('start-agent-1');
+    expect(executionLog.slice(0, 2)).toContain('start-agent-2');
+
+    // Both agents must end before anything else starts
+    const endAgent1 = executionLog.indexOf('end-agent-1');
+    const endAgent2 = executionLog.indexOf('end-agent-2');
+    const wave1End = Math.max(endAgent1, endAgent2);
+
+    // Wave 2: call-3 (sequential/write)
+    const start3 = executionLog.indexOf('start-call-3');
+    const end3 = executionLog.indexOf('end-call-3');
+    expect(start3).toBeGreaterThan(wave1End);
+    expect(end3).toBeGreaterThan(start3);
+
+    // Wave 3: call-1 (parallelizable/read)
+    const start1 = executionLog.indexOf('start-call-1');
+    expect(start1).toBeGreaterThan(end3);
+  });
 });
diff --git a/packages/core/src/telemetry/billingEvents.test.ts b/packages/core/src/telemetry/billingEvents.test.ts
new file mode 100644
index 0000000000..1c6e9fe2d2
--- /dev/null
+++ b/packages/core/src/telemetry/billingEvents.test.ts
@@ -0,0 +1,206 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { describe, it, expect, vi, beforeEach, afterEach } from 'vitest';
+import { makeFakeConfig } from '../test-utils/config.js';
+import {
+  OverageMenuShownEvent,
+  OverageOptionSelectedEvent,
+  EmptyWalletMenuShownEvent,
+  CreditPurchaseClickEvent,
+  CreditsUsedEvent,
+  ApiKeyUpdatedEvent,
+  EVENT_OVERAGE_MENU_SHOWN,
+  EVENT_OVERAGE_OPTION_SELECTED,
+  EVENT_EMPTY_WALLET_MENU_SHOWN,
+  EVENT_CREDIT_PURCHASE_CLICK,
+  EVENT_CREDITS_USED,
+  EVENT_API_KEY_UPDATED,
+} from './billingEvents.js';
+
+describe('billingEvents', () => {
+  const fakeConfig = makeFakeConfig();
+
+  beforeEach(() => {
+    vi.useFakeTimers();
+    vi.setSystemTime(new Date('2026-01-15T10:30:00.000Z'));
+  });
+
+  afterEach(() => {
+    vi.useRealTimers();
+  });
+
+  describe('OverageMenuShownEvent', () => {
+    it('should construct with correct properties', () => {
+      const event = new OverageMenuShownEvent(
+        'gemini-3-pro-preview',
+        500,
+        'ask',
+      );
+      expect(event['event.name']).toBe('overage_menu_shown');
+      expect(event.model).toBe('gemini-3-pro-preview');
+      expect(event.credit_balance).toBe(500);
+      expect(event.overage_strategy).toBe('ask');
+    });
+
+    it('should produce correct OpenTelemetry attributes', () => {
+      const event = new OverageMenuShownEvent(
+        'gemini-3-pro-preview',
+        500,
+        'ask',
+      );
+      const attrs = event.toOpenTelemetryAttributes(fakeConfig);
+      expect(attrs['event.name']).toBe(EVENT_OVERAGE_MENU_SHOWN);
+      expect(attrs['model']).toBe('gemini-3-pro-preview');
+      expect(attrs['credit_balance']).toBe(500);
+      expect(attrs['overage_strategy']).toBe('ask');
+    });
+
+    it('should produce a human-readable log body', () => {
+      const event = new OverageMenuShownEvent(
+        'gemini-3-pro-preview',
+        500,
+        'ask',
+      );
+      expect(event.toLogBody()).toContain('gemini-3-pro-preview');
+      expect(event.toLogBody()).toContain('500');
+    });
+  });
+
+  describe('OverageOptionSelectedEvent', () => {
+    it('should construct with correct properties', () => {
+      const event = new OverageOptionSelectedEvent(
+        'gemini-3-pro-preview',
+        'use_credits',
+        100,
+      );
+      expect(event['event.name']).toBe('overage_option_selected');
+      expect(event.selected_option).toBe('use_credits');
+      expect(event.credit_balance).toBe(100);
+    });
+
+    it('should produce correct OpenTelemetry attributes', () => {
+      const event = new OverageOptionSelectedEvent(
+        'gemini-3-pro-preview',
+        'use_fallback',
+        200,
+      );
+      const attrs = event.toOpenTelemetryAttributes(fakeConfig);
+      expect(attrs['event.name']).toBe(EVENT_OVERAGE_OPTION_SELECTED);
+      expect(attrs['selected_option']).toBe('use_fallback');
+    });
+
+    it('should produce a human-readable log body', () => {
+      const event = new OverageOptionSelectedEvent(
+        'gemini-3-pro-preview',
+        'manage',
+        100,
+      );
+      expect(event.toLogBody()).toContain('manage');
+      expect(event.toLogBody()).toContain('gemini-3-pro-preview');
+    });
+  });
+
+  describe('EmptyWalletMenuShownEvent', () => {
+    it('should construct with correct properties', () => {
+      const event = new EmptyWalletMenuShownEvent('gemini-3-pro-preview');
+      expect(event['event.name']).toBe('empty_wallet_menu_shown');
+      expect(event.model).toBe('gemini-3-pro-preview');
+    });
+
+    it('should produce correct OpenTelemetry attributes', () => {
+      const event = new EmptyWalletMenuShownEvent('gemini-3-pro-preview');
+      const attrs = event.toOpenTelemetryAttributes(fakeConfig);
+      expect(attrs['event.name']).toBe(EVENT_EMPTY_WALLET_MENU_SHOWN);
+      expect(attrs['model']).toBe('gemini-3-pro-preview');
+    });
+
+    it('should produce a human-readable log body', () => {
+      const event = new EmptyWalletMenuShownEvent('gemini-3-pro-preview');
+      expect(event.toLogBody()).toContain('gemini-3-pro-preview');
+    });
+  });
+
+  describe('CreditPurchaseClickEvent', () => {
+    it('should construct with correct properties', () => {
+      const event = new CreditPurchaseClickEvent(
+        'empty_wallet_menu',
+        'gemini-3-pro-preview',
+      );
+      expect(event['event.name']).toBe('credit_purchase_click');
+      expect(event.source).toBe('empty_wallet_menu');
+      expect(event.model).toBe('gemini-3-pro-preview');
+    });
+
+    it('should produce correct OpenTelemetry attributes', () => {
+      const event = new CreditPurchaseClickEvent(
+        'overage_menu',
+        'gemini-3-pro-preview',
+      );
+      const attrs = event.toOpenTelemetryAttributes(fakeConfig);
+      expect(attrs['event.name']).toBe(EVENT_CREDIT_PURCHASE_CLICK);
+      expect(attrs['source']).toBe('overage_menu');
+    });
+
+    it('should produce a human-readable log body', () => {
+      const event = new CreditPurchaseClickEvent(
+        'manage',
+        'gemini-3-pro-preview',
+      );
+      expect(event.toLogBody()).toContain('manage');
+      expect(event.toLogBody()).toContain('gemini-3-pro-preview');
+    });
+  });
+
+  describe('CreditsUsedEvent', () => {
+    it('should construct with correct properties', () => {
+      const event = new CreditsUsedEvent('gemini-3-pro-preview', 10, 490);
+      expect(event['event.name']).toBe('credits_used');
+      expect(event.credits_consumed).toBe(10);
+      expect(event.credits_remaining).toBe(490);
+    });
+
+    it('should produce correct OpenTelemetry attributes', () => {
+      const event = new CreditsUsedEvent('gemini-3-pro-preview', 10, 490);
+      const attrs = event.toOpenTelemetryAttributes(fakeConfig);
+      expect(attrs['event.name']).toBe(EVENT_CREDITS_USED);
+      expect(attrs['credits_consumed']).toBe(10);
+      expect(attrs['credits_remaining']).toBe(490);
+    });
+
+    it('should produce a human-readable log body', () => {
+      const event = new CreditsUsedEvent('gemini-3-pro-preview', 10, 490);
+      const body = event.toLogBody();
+      expect(body).toContain('10');
+      expect(body).toContain('490');
+      expect(body).toContain('gemini-3-pro-preview');
+    });
+  });
+
+  describe('ApiKeyUpdatedEvent', () => {
+    it('should construct with correct properties', () => {
+      const event = new ApiKeyUpdatedEvent('google_login', 'api_key');
+      expect(event['event.name']).toBe('api_key_updated');
+      expect(event.previous_auth_type).toBe('google_login');
+      expect(event.new_auth_type).toBe('api_key');
+    });
+
+    it('should produce correct OpenTelemetry attributes', () => {
+      const event = new ApiKeyUpdatedEvent('google_login', 'api_key');
+      const attrs = event.toOpenTelemetryAttributes(fakeConfig);
+      expect(attrs['event.name']).toBe(EVENT_API_KEY_UPDATED);
+      expect(attrs['previous_auth_type']).toBe('google_login');
+      expect(attrs['new_auth_type']).toBe('api_key');
+    });
+
+    it('should produce a human-readable log body', () => {
+      const event = new ApiKeyUpdatedEvent('google_login', 'api_key');
+      const body = event.toLogBody();
+      expect(body).toContain('google_login');
+      expect(body).toContain('api_key');
+    });
+  });
+});
diff --git a/packages/core/src/telemetry/billingEvents.ts b/packages/core/src/telemetry/billingEvents.ts
new file mode 100644
index 0000000000..e75d71f2b9
--- /dev/null
+++ b/packages/core/src/telemetry/billingEvents.ts
@@ -0,0 +1,255 @@
+/**
+ * @license
+ * Copyright 2026 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import type { Config } from '../config/config.js';
+import type { LogAttributes } from '@opentelemetry/api-logs';
+import type { BaseTelemetryEvent } from './types.js';
+import { getCommonAttributes } from './telemetryAttributes.js';
+import type { OverageStrategy } from '../billing/billing.js';
+
+/** Overage menu option that can be selected by the user */
+export type OverageOption =
+  | 'use_credits'
+  | 'use_fallback'
+  | 'manage'
+  | 'stop'
+  | 'get_credits';
+
+// ============================================================================
+// Event: Overage Menu Shown
+// ============================================================================
+
+export const EVENT_OVERAGE_MENU_SHOWN = 'gemini_cli.overage_menu_shown';
+
+export class OverageMenuShownEvent implements BaseTelemetryEvent {
+  'event.name': 'overage_menu_shown';
+  'event.timestamp': string;
+  model: string;
+  credit_balance: number;
+  overage_strategy: OverageStrategy;
+
+  constructor(
+    model: string,
+    creditBalance: number,
+    overageStrategy: OverageStrategy,
+  ) {
+    this['event.name'] = 'overage_menu_shown';
+    this['event.timestamp'] = new Date().toISOString();
+    this.model = model;
+    this.credit_balance = creditBalance;
+    this.overage_strategy = overageStrategy;
+  }
+
+  toOpenTelemetryAttributes(config: Config): LogAttributes {
+    return {
+      ...getCommonAttributes(config),
+      'event.name': EVENT_OVERAGE_MENU_SHOWN,
+      'event.timestamp': this['event.timestamp'],
+      model: this.model,
+      credit_balance: this.credit_balance,
+      overage_strategy: this.overage_strategy,
+    };
+  }
+
+  toLogBody(): string {
+    return `Overage menu shown for model ${this.model} with ${this.credit_balance} credits available.`;
+  }
+}
+
+// ============================================================================
+// Event: Overage Option Selected
+// ============================================================================
+
+export const EVENT_OVERAGE_OPTION_SELECTED =
+  'gemini_cli.overage_option_selected';
+
+export class OverageOptionSelectedEvent implements BaseTelemetryEvent {
+  'event.name': 'overage_option_selected';
+  'event.timestamp': string;
+  model: string;
+  selected_option: OverageOption;
+  credit_balance: number;
+
+  constructor(
+    model: string,
+    selectedOption: OverageOption,
+    creditBalance: number,
+  ) {
+    this['event.name'] = 'overage_option_selected';
+    this['event.timestamp'] = new Date().toISOString();
+    this.model = model;
+    this.selected_option = selectedOption;
+    this.credit_balance = creditBalance;
+  }
+
+  toOpenTelemetryAttributes(config: Config): LogAttributes {
+    return {
+      ...getCommonAttributes(config),
+      'event.name': EVENT_OVERAGE_OPTION_SELECTED,
+      'event.timestamp': this['event.timestamp'],
+      model: this.model,
+      selected_option: this.selected_option,
+      credit_balance: this.credit_balance,
+    };
+  }
+
+  toLogBody(): string {
+    return `Overage option '${this.selected_option}' selected for model ${this.model}.`;
+  }
+}
+
+// ============================================================================
+// Event: Empty Wallet Menu Shown
+// ============================================================================
+
+export const EVENT_EMPTY_WALLET_MENU_SHOWN =
+  'gemini_cli.empty_wallet_menu_shown';
+
+export class EmptyWalletMenuShownEvent implements BaseTelemetryEvent {
+  'event.name': 'empty_wallet_menu_shown';
+  'event.timestamp': string;
+  model: string;
+
+  constructor(model: string) {
+    this['event.name'] = 'empty_wallet_menu_shown';
+    this['event.timestamp'] = new Date().toISOString();
+    this.model = model;
+  }
+
+  toOpenTelemetryAttributes(config: Config): LogAttributes {
+    return {
+      ...getCommonAttributes(config),
+      'event.name': EVENT_EMPTY_WALLET_MENU_SHOWN,
+      'event.timestamp': this['event.timestamp'],
+      model: this.model,
+    };
+  }
+
+  toLogBody(): string {
+    return `Empty wallet menu shown for model ${this.model}.`;
+  }
+}
+
+// ============================================================================
+// Event: Credit Purchase Click
+// ============================================================================
+
+export const EVENT_CREDIT_PURCHASE_CLICK = 'gemini_cli.credit_purchase_click';
+
+export class CreditPurchaseClickEvent implements BaseTelemetryEvent {
+  'event.name': 'credit_purchase_click';
+  'event.timestamp': string;
+  source: 'overage_menu' | 'empty_wallet_menu' | 'manage';
+  model: string;
+
+  constructor(
+    source: 'overage_menu' | 'empty_wallet_menu' | 'manage',
+    model: string,
+  ) {
+    this['event.name'] = 'credit_purchase_click';
+    this['event.timestamp'] = new Date().toISOString();
+    this.source = source;
+    this.model = model;
+  }
+
+  toOpenTelemetryAttributes(config: Config): LogAttributes {
+    return {
+      ...getCommonAttributes(config),
+      'event.name': EVENT_CREDIT_PURCHASE_CLICK,
+      'event.timestamp': this['event.timestamp'],
+      source: this.source,
+      model: this.model,
+    };
+  }
+
+  toLogBody(): string {
+    return `Credit purchase clicked from ${this.source} for model ${this.model}.`;
+  }
+}
+
+// ============================================================================
+// Event: Credits Used
+// ============================================================================
+
+export const EVENT_CREDITS_USED = 'gemini_cli.credits_used';
+
+export class CreditsUsedEvent implements BaseTelemetryEvent {
+  'event.name': 'credits_used';
+  'event.timestamp': string;
+  model: string;
+  credits_consumed: number;
+  credits_remaining: number;
+
+  constructor(
+    model: string,
+    creditsConsumed: number,
+    creditsRemaining: number,
+  ) {
+    this['event.name'] = 'credits_used';
+    this['event.timestamp'] = new Date().toISOString();
+    this.model = model;
+    this.credits_consumed = creditsConsumed;
+    this.credits_remaining = creditsRemaining;
+  }
+
+  toOpenTelemetryAttributes(config: Config): LogAttributes {
+    return {
+      ...getCommonAttributes(config),
+      'event.name': EVENT_CREDITS_USED,
+      'event.timestamp': this['event.timestamp'],
+      model: this.model,
+      credits_consumed: this.credits_consumed,
+      credits_remaining: this.credits_remaining,
+    };
+  }
+
+  toLogBody(): string {
+    return `${this.credits_consumed} credits consumed for model ${this.model}. ${this.credits_remaining} remaining.`;
+  }
+}
+
+// ============================================================================
+// Event: API Key Updated (Auth Type Changed)
+// ============================================================================
+
+export const EVENT_API_KEY_UPDATED = 'gemini_cli.api_key_updated';
+
+export class ApiKeyUpdatedEvent implements BaseTelemetryEvent {
+  'event.name': 'api_key_updated';
+  'event.timestamp': string;
+  previous_auth_type: string;
+  new_auth_type: string;
+
+  constructor(previousAuthType: string, newAuthType: string) {
+    this['event.name'] = 'api_key_updated';
+    this['event.timestamp'] = new Date().toISOString();
+    this.previous_auth_type = previousAuthType;
+    this.new_auth_type = newAuthType;
+  }
+
+  toOpenTelemetryAttributes(config: Config): LogAttributes {
+    return {
+      ...getCommonAttributes(config),
+      'event.name': EVENT_API_KEY_UPDATED,
+      'event.timestamp': this['event.timestamp'],
+      previous_auth_type: this.previous_auth_type,
+      new_auth_type: this.new_auth_type,
+    };
+  }
+
+  toLogBody(): string {
+    return `Auth type changed from ${this.previous_auth_type} to ${this.new_auth_type}.`;
+  }
+}
+
+/** Union type of all billing-related telemetry events */
+export type BillingTelemetryEvent =
+  | OverageMenuShownEvent
+  | OverageOptionSelectedEvent
+  | EmptyWalletMenuShownEvent
+  | CreditPurchaseClickEvent
+  | CreditsUsedEvent
+  | ApiKeyUpdatedEvent;
diff --git a/packages/core/src/telemetry/conseca-logger.test.ts b/packages/core/src/telemetry/conseca-logger.test.ts
index 0ad482ed92..e3ce85432e 100644
--- a/packages/core/src/telemetry/conseca-logger.test.ts
+++ b/packages/core/src/telemetry/conseca-logger.test.ts
@@ -39,6 +39,7 @@ describe('conseca-logger', () => {
       getTelemetryLogPromptsEnabled: vi.fn().mockReturnValue(true),
       isInteractive: vi.fn().mockReturnValue(true),
       getExperiments: vi.fn().mockReturnValue({ experimentIds: [] }),
+      getContentGeneratorConfig: vi.fn().mockReturnValue({ authType: 'oauth' }),
     } as unknown as Config;
 
     mockLogger = {
diff --git a/packages/core/src/telemetry/index.ts b/packages/core/src/telemetry/index.ts
index 84064ee7e6..adea893983 100644
--- a/packages/core/src/telemetry/index.ts
+++ b/packages/core/src/telemetry/index.ts
@@ -77,6 +77,7 @@ export type { TelemetryEvent } from './types.js';
 export { SpanStatusCode, ValueType } from '@opentelemetry/api';
 export { SemanticAttributes } from '@opentelemetry/semantic-conventions';
 export * from './uiTelemetry.js';
+export * from './billingEvents.js';
 export {
   MemoryMonitor,
   initializeMemoryMonitor,
@@ -145,6 +146,9 @@ export {
   GenAiOperationName,
   GenAiProviderName,
   GenAiTokenType,
+  // Billing metrics functions
+  recordOverageOptionSelected,
+  recordCreditPurchaseClick,
 } from './metrics.js';
 export { runInDevTraceSpan, type SpanMetadata } from './trace.js';
 export { startupProfiler, StartupProfiler } from './startupProfiler.js';
diff --git a/packages/core/src/telemetry/loggers.test.ts b/packages/core/src/telemetry/loggers.test.ts
index 8d07712827..de2f94c8d7 100644
--- a/packages/core/src/telemetry/loggers.test.ts
+++ b/packages/core/src/telemetry/loggers.test.ts
@@ -280,6 +280,7 @@ describe('loggers', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
+      getContentGeneratorConfig: () => undefined,
     } as unknown as Config;
 
     it('should log a user prompt', () => {
@@ -319,6 +320,7 @@ describe('loggers', () => {
         isInteractive: () => false,
         getExperiments: () => undefined,
         getExperimentsAsync: async () => undefined,
+        getContentGeneratorConfig: () => undefined,
       } as unknown as Config;
       const event = new UserPromptEvent(
         11,
@@ -356,7 +358,8 @@ describe('loggers', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
-    } as Config;
+      getContentGeneratorConfig: () => undefined,
+    } as unknown as Config;
 
     const mockMetrics = {
       recordApiResponseMetrics: vi.fn(),
@@ -558,7 +561,8 @@ describe('loggers', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
-    } as Config;
+      getContentGeneratorConfig: () => undefined,
+    } as unknown as Config;
 
     const mockMetrics = {
       recordApiResponseMetrics: vi.fn(),
@@ -996,6 +1000,7 @@ describe('loggers', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
+      getContentGeneratorConfig: () => undefined,
     } as unknown as Config;
 
     it('should log flash fallback event', () => {
@@ -1025,6 +1030,7 @@ describe('loggers', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
+      getContentGeneratorConfig: () => undefined,
     } as unknown as Config;
 
     beforeEach(() => {
@@ -1121,7 +1127,8 @@ describe('loggers', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
-    } as Config;
+      getContentGeneratorConfig: () => undefined,
+    } as unknown as Config;
 
     const mockMetrics = {
       recordToolCallMetrics: vi.fn(),
@@ -1741,7 +1748,8 @@ describe('loggers', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
-    } as Config;
+      getContentGeneratorConfig: () => undefined,
+    } as unknown as Config;
 
     const mockMetrics = {
       recordFileOperationMetric: vi.fn(),
@@ -1803,6 +1811,7 @@ describe('loggers', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
+      getContentGeneratorConfig: () => undefined,
     } as unknown as Config;
 
     it('should log a tool output truncated event', () => {
@@ -1842,6 +1851,7 @@ describe('loggers', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
+      getContentGeneratorConfig: () => undefined,
     } as unknown as Config;
 
     beforeEach(() => {
@@ -2099,6 +2109,7 @@ describe('loggers', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
+      getContentGeneratorConfig: () => undefined,
     } as unknown as Config;
 
     beforeEach(() => {
@@ -2146,6 +2157,7 @@ describe('loggers', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
+      getContentGeneratorConfig: () => undefined,
     } as unknown as Config;
 
     beforeEach(() => {
@@ -2193,6 +2205,7 @@ describe('loggers', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
+      getContentGeneratorConfig: () => undefined,
     } as unknown as Config;
 
     beforeEach(() => {
@@ -2231,6 +2244,7 @@ describe('loggers', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
+      getContentGeneratorConfig: () => undefined,
     } as unknown as Config;
 
     beforeEach(() => {
@@ -2284,6 +2298,7 @@ describe('loggers', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
+      getContentGeneratorConfig: () => undefined,
     } as unknown as Config;
 
     beforeEach(() => {
@@ -2322,6 +2337,7 @@ describe('loggers', () => {
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
       getTelemetryLogPromptsEnabled: () => false,
+      getContentGeneratorConfig: () => undefined,
     } as unknown as Config;
 
     beforeEach(() => {
diff --git a/packages/core/src/telemetry/loggers.ts b/packages/core/src/telemetry/loggers.ts
index b4935f3af7..e96db38596 100644
--- a/packages/core/src/telemetry/loggers.ts
+++ b/packages/core/src/telemetry/loggers.ts
@@ -84,6 +84,7 @@ import type { UiEvent } from './uiTelemetry.js';
 import { uiTelemetryService } from './uiTelemetry.js';
 import { ClearcutLogger } from './clearcut-logger/clearcut-logger.js';
 import { debugLogger } from '../utils/debugLogger.js';
+import type { BillingTelemetryEvent } from './billingEvents.js';
 
 export function logCliConfiguration(
   config: Config,
@@ -827,3 +828,17 @@ export function logTokenStorageInitialization(
     recordTokenStorageInitialization(config, event);
   });
 }
+
+export function logBillingEvent(
+  config: Config,
+  event: BillingTelemetryEvent,
+): void {
+  bufferTelemetryEvent(() => {
+    const logger = logs.getLogger(SERVICE_NAME);
+    const logRecord: LogRecord = {
+      body: event.toLogBody(),
+      attributes: event.toOpenTelemetryAttributes(config),
+    };
+    logger.emit(logRecord);
+  });
+}
diff --git a/packages/core/src/telemetry/metrics.ts b/packages/core/src/telemetry/metrics.ts
index 442d00890a..598158af07 100644
--- a/packages/core/src/telemetry/metrics.ts
+++ b/packages/core/src/telemetry/metrics.ts
@@ -41,6 +41,8 @@ const EVENT_HOOK_CALL_COUNT = 'gemini_cli.hook_call.count';
 const EVENT_HOOK_CALL_LATENCY = 'gemini_cli.hook_call.latency';
 const KEYCHAIN_AVAILABILITY_COUNT = 'gemini_cli.keychain.availability.count';
 const TOKEN_STORAGE_TYPE_COUNT = 'gemini_cli.token_storage.type.count';
+const OVERAGE_OPTION_COUNT = 'gemini_cli.overage_option.count';
+const CREDIT_PURCHASE_COUNT = 'gemini_cli.credit_purchase.count';
 
 // Agent Metrics
 const AGENT_RUN_COUNT = 'gemini_cli.agent.run.count';
@@ -259,6 +261,26 @@ const COUNTER_DEFINITIONS = {
       forced: boolean;
     },
   },
+  [OVERAGE_OPTION_COUNT]: {
+    description: 'Counts overage option selections.',
+    valueType: ValueType.INT,
+    assign: (c: Counter) => (overageOptionCounter = c),
+    // eslint-disable-next-line @typescript-eslint/no-unsafe-type-assertion
+    attributes: {} as {
+      selected_option: string;
+      model: string;
+    },
+  },
+  [CREDIT_PURCHASE_COUNT]: {
+    description: 'Counts credit purchase link clicks.',
+    valueType: ValueType.INT,
+    assign: (c: Counter) => (creditPurchaseCounter = c),
+    // eslint-disable-next-line @typescript-eslint/no-unsafe-type-assertion
+    attributes: {} as {
+      source: string;
+      model: string;
+    },
+  },
 } as const;
 
 const HISTOGRAM_DEFINITIONS = {
@@ -597,6 +619,8 @@ let hookCallCounter: Counter | undefined;
 let hookCallLatencyHistogram: Histogram | undefined;
 let keychainAvailabilityCounter: Counter | undefined;
 let tokenStorageTypeCounter: Counter | undefined;
+let overageOptionCounter: Counter | undefined;
+let creditPurchaseCounter: Counter | undefined;
 
 // OpenTelemetry GenAI Semantic Convention Metrics
 let genAiClientTokenUsageHistogram: Histogram | undefined;
@@ -1334,3 +1358,31 @@ export function recordTokenStorageInitialization(
     forced: event.forced,
   });
 }
+
+/**
+ * Records a metric for an overage option selection.
+ */
+export function recordOverageOptionSelected(
+  config: Config,
+  attributes: MetricDefinitions[typeof OVERAGE_OPTION_COUNT]['attributes'],
+): void {
+  if (!overageOptionCounter || !isMetricsInitialized) return;
+  overageOptionCounter.add(1, {
+    ...baseMetricDefinition.getCommonAttributes(config),
+    ...attributes,
+  });
+}
+
+/**
+ * Records a metric for a credit purchase link click.
+ */
+export function recordCreditPurchaseClick(
+  config: Config,
+  attributes: MetricDefinitions[typeof CREDIT_PURCHASE_COUNT]['attributes'],
+): void {
+  if (!creditPurchaseCounter || !isMetricsInitialized) return;
+  creditPurchaseCounter.add(1, {
+    ...baseMetricDefinition.getCommonAttributes(config),
+    ...attributes,
+  });
+}
diff --git a/packages/core/src/telemetry/sanitize.test.ts b/packages/core/src/telemetry/sanitize.test.ts
index c3129295a7..5ac5374d01 100644
--- a/packages/core/src/telemetry/sanitize.test.ts
+++ b/packages/core/src/telemetry/sanitize.test.ts
@@ -32,6 +32,7 @@ function createMockConfig(logPromptsEnabled: boolean): Config {
     getModel: () => 'gemini-1.5-flash',
     isInteractive: () => true,
     getUserEmail: () => undefined,
+    getContentGeneratorConfig: () => undefined,
   } as unknown as Config;
 }
 
diff --git a/packages/core/src/telemetry/sdk.test.ts b/packages/core/src/telemetry/sdk.test.ts
index 020fee4738..e6d3f26ae7 100644
--- a/packages/core/src/telemetry/sdk.test.ts
+++ b/packages/core/src/telemetry/sdk.test.ts
@@ -77,6 +77,7 @@ describe('Telemetry SDK', () => {
       isInteractive: () => false,
       getExperiments: () => undefined,
       getExperimentsAsync: async () => undefined,
+      getContentGeneratorConfig: () => undefined,
     } as unknown as Config;
   });
 
diff --git a/packages/core/src/telemetry/telemetryAttributes.ts b/packages/core/src/telemetry/telemetryAttributes.ts
index 576f2ee13f..d2139e32df 100644
--- a/packages/core/src/telemetry/telemetryAttributes.ts
+++ b/packages/core/src/telemetry/telemetryAttributes.ts
@@ -15,11 +15,13 @@ const installationManager = new InstallationManager();
 export function getCommonAttributes(config: Config): Attributes {
   const email = userAccountManager.getCachedGoogleAccount();
   const experiments = config.getExperiments();
+  const authType = config.getContentGeneratorConfig()?.authType;
   return {
     'session.id': config.getSessionId(),
     'installation.id': installationManager.getInstallationId(),
     interactive: config.isInteractive(),
     ...(email && { 'user.email': email }),
+    ...(authType && { auth_type: authType }),
     ...(experiments &&
       experiments.experimentIds.length > 0 && {
         'experiments.ids': experiments.experimentIds,
diff --git a/packages/core/src/tools/mcp-client-manager.test.ts b/packages/core/src/tools/mcp-client-manager.test.ts
index 9aec6014b0..e436cea356 100644
--- a/packages/core/src/tools/mcp-client-manager.test.ts
+++ b/packages/core/src/tools/mcp-client-manager.test.ts
@@ -474,4 +474,98 @@ describe('McpClientManager', () => {
       });
     });
   });
+
+  describe('diagnostic reporting', () => {
+    let coreEventsMock: typeof import('../utils/events.js').coreEvents;
+
+    beforeEach(async () => {
+      const eventsModule = await import('../utils/events.js');
+      coreEventsMock = eventsModule.coreEvents;
+      vi.spyOn(coreEventsMock, 'emitFeedback').mockImplementation(() => {});
+    });
+
+    it('should emit hint instead of full error when user has not interacted with MCP', () => {
+      const manager = new McpClientManager('0.0.1', toolRegistry, mockConfig);
+      manager.emitDiagnostic(
+        'error',
+        'Something went wrong',
+        new Error('boom'),
+      );
+
+      expect(coreEventsMock.emitFeedback).toHaveBeenCalledWith(
+        'info',
+        'MCP issues detected. Run /mcp list for status.',
+      );
+      expect(coreEventsMock.emitFeedback).not.toHaveBeenCalledWith(
+        'error',
+        'Something went wrong',
+        expect.anything(),
+      );
+    });
+
+    it('should emit full error when user has interacted with MCP', () => {
+      const manager = new McpClientManager('0.0.1', toolRegistry, mockConfig);
+      manager.setUserInteractedWithMcp();
+      manager.emitDiagnostic(
+        'error',
+        'Something went wrong',
+        new Error('boom'),
+      );
+
+      expect(coreEventsMock.emitFeedback).toHaveBeenCalledWith(
+        'error',
+        'Something went wrong',
+        expect.any(Error),
+      );
+    });
+
+    it('should still deduplicate diagnostic messages after user interaction', () => {
+      const manager = new McpClientManager('0.0.1', toolRegistry, mockConfig);
+      manager.setUserInteractedWithMcp();
+
+      manager.emitDiagnostic('error', 'Same error');
+      manager.emitDiagnostic('error', 'Same error');
+
+      expect(coreEventsMock.emitFeedback).toHaveBeenCalledTimes(1);
+    });
+
+    it('should only show hint once per session', () => {
+      const manager = new McpClientManager('0.0.1', toolRegistry, mockConfig);
+
+      manager.emitDiagnostic('error', 'Error 1');
+      manager.emitDiagnostic('error', 'Error 2');
+
+      expect(coreEventsMock.emitFeedback).toHaveBeenCalledTimes(1);
+      expect(coreEventsMock.emitFeedback).toHaveBeenCalledWith(
+        'info',
+        'MCP issues detected. Run /mcp list for status.',
+      );
+    });
+
+    it('should capture last error for a server even when silenced', () => {
+      const manager = new McpClientManager('0.0.1', toolRegistry, mockConfig);
+
+      manager.emitDiagnostic(
+        'error',
+        'Error in server (test-server)',
+        undefined,
+        'test-server',
+      );
+
+      expect(manager.getLastError('test-server')).toBe(
+        'Error in server (test-server)',
+      );
+    });
+
+    it('should show previously deduplicated errors after interaction clears state', () => {
+      const manager = new McpClientManager('0.0.1', toolRegistry, mockConfig);
+
+      manager.emitDiagnostic('error', 'Same error');
+      expect(coreEventsMock.emitFeedback).toHaveBeenCalledTimes(1); // The hint
+
+      manager.setUserInteractedWithMcp();
+      manager.emitDiagnostic('error', 'Same error');
+      expect(coreEventsMock.emitFeedback).toHaveBeenCalledTimes(2); // Now the actual error
+    });
+  });
 });
diff --git a/packages/core/src/tools/mcp-client-manager.ts b/packages/core/src/tools/mcp-client-manager.ts
index 38c391c352..96d7abf55c 100644
--- a/packages/core/src/tools/mcp-client-manager.ts
+++ b/packages/core/src/tools/mcp-client-manager.ts
@@ -42,6 +42,28 @@ export class McpClientManager {
     extensionName: string;
   }> = [];
 
+  /**
+   * Track whether the user has explicitly interacted with MCP in this session
+   * (e.g. by running an /mcp command).
+   */
+  private userInteractedWithMcp: boolean = false;
+
+  /**
+   * Track which MCP diagnostics have already been shown to the user this session
+   * and at what verbosity level.
+   */
+  private shownDiagnostics: Map<string, 'silent' | 'verbose'> = new Map();
+
+  /**
+   * Track whether the MCP "hint" has been shown.
+   */
+  private hintShown: boolean = false;
+
+  /**
+   * Track the last error message for each server.
+   */
+  private lastErrors: Map<string, string> = new Map();
+
   constructor(
     clientVersion: string,
     toolRegistry: ToolRegistry,
@@ -54,6 +76,69 @@ export class McpClientManager {
     this.eventEmitter = eventEmitter;
   }
 
+  setUserInteractedWithMcp() {
+    this.userInteractedWithMcp = true;
+  }
+
+  getLastError(serverName: string): string | undefined {
+    return this.lastErrors.get(serverName);
+  }
+
+  /**
+   * Emit an MCP diagnostic message, adhering to the user's intent and
+   * deduplication rules.
+   */
+  emitDiagnostic(
+    severity: 'info' | 'warning' | 'error',
+    message: string,
+    error?: unknown,
+    serverName?: string,
+  ) {
+    // Capture error for later display if it's an error/warning
+    if (severity === 'error' || severity === 'warning') {
+      if (serverName) {
+        this.lastErrors.set(serverName, message);
+      }
+    }
+
+    // Deduplicate
+    const diagnosticKey = `${severity}:${message}`;
+    const previousStatus = this.shownDiagnostics.get(diagnosticKey);
+
+    // If user has interacted, show verbosely unless already shown verbosely
+    if (this.userInteractedWithMcp) {
+      if (previousStatus === 'verbose') {
+        debugLogger.debug(
+          `Deduplicated verbose MCP diagnostic: ${diagnosticKey}`,
+        );
+        return;
+      }
+      this.shownDiagnostics.set(diagnosticKey, 'verbose');
+      coreEvents.emitFeedback(severity, message, error);
+      return;
+    }
+
+    // In silent mode, if it has been shown at all, skip
+    if (previousStatus) {
+      debugLogger.debug(`Deduplicated silent MCP diagnostic: ${diagnosticKey}`);
+      return;
+    }
+    this.shownDiagnostics.set(diagnosticKey, 'silent');
+
+    // Otherwise, be less annoying
+    debugLogger.log(`[MCP ${severity}] ${message}`, error);
+
+    if (severity === 'error' || severity === 'warning') {
+      if (!this.hintShown) {
+        this.hintShown = true;
+        coreEvents.emitFeedback(
+          'info',
+          'MCP issues detected. Run /mcp list for status.',
+        );
+      }
+    }
+  }
+
   getBlockedMcpServers() {
     return this.blockedMcpServers;
   }
@@ -253,7 +338,7 @@ export class McpClientManager {
             if (!isAuthenticationError(error)) {
               // Log the error but don't let a single failed server stop the others
               const errorMessage = getErrorMessage(error);
-              coreEvents.emitFeedback(
+              this.emitDiagnostic(
                 'error',
                 `Error during discovery for MCP server '${name}': ${errorMessage}`,
                 error,
@@ -262,7 +347,7 @@ export class McpClientManager {
           }
         } catch (error) {
           const errorMessage = getErrorMessage(error);
-          coreEvents.emitFeedback(
+          this.emitDiagnostic(
             'error',
             `Error initializing MCP server '${name}': ${errorMessage}`,
             error,
@@ -391,7 +476,7 @@ export class McpClientManager {
         try {
           await client.disconnect();
         } catch (error) {
-          coreEvents.emitFeedback(
+          this.emitDiagnostic(
             'error',
             `Error stopping client '${name}':`,
             error,
diff --git a/packages/core/src/tools/mcp-client.test.ts b/packages/core/src/tools/mcp-client.test.ts
index df4c869c34..126fb7ce68 100644
--- a/packages/core/src/tools/mcp-client.test.ts
+++ b/packages/core/src/tools/mcp-client.test.ts
@@ -33,6 +33,7 @@ import {
   isEnabled,
   McpClient,
   populateMcpServerCommand,
+  type McpContext,
 } from './mcp-client.js';
 import type { ToolRegistry } from './tool-registry.js';
 import type { ResourceRegistry } from '../resources/resource-registry.js';
@@ -42,12 +43,28 @@ import * as path from 'node:path';
 import { coreEvents } from '../utils/events.js';
 import type { EnvironmentSanitizationConfig } from '../services/environmentSanitization.js';
 
+interface TestableTransport {
+  _authProvider?: GoogleCredentialProvider;
+  _requestInit?: {
+    headers?: Record<string, string>;
+  };
+}
+
 const EMPTY_CONFIG: EnvironmentSanitizationConfig = {
   enableEnvironmentVariableRedaction: true,
   allowedEnvironmentVariables: [],
   blockedEnvironmentVariables: [],
 };
 
+const MOCK_CONTEXT_DEFAULT = {
+  sanitizationConfig: EMPTY_CONFIG,
+  emitMcpDiagnostic: vi.fn(),
+  setUserInteractedWithMcp: vi.fn(),
+  isTrustedFolder: vi.fn().mockReturnValue(true),
+};
+
+let MOCK_CONTEXT: McpContext = MOCK_CONTEXT_DEFAULT;
+
 vi.mock('@modelcontextprotocol/sdk/client/stdio.js');
 vi.mock('@modelcontextprotocol/sdk/client/index.js');
 vi.mock('@google/genai');
@@ -69,6 +86,12 @@ describe('mcp-client', () => {
   let testWorkspace: string;
 
   beforeEach(() => {
+    MOCK_CONTEXT = {
+      sanitizationConfig: EMPTY_CONFIG,
+      emitMcpDiagnostic: vi.fn(),
+      setUserInteractedWithMcp: vi.fn(),
+      isTrustedFolder: vi.fn().mockReturnValue(true),
+    };
     // create a tmp dir for this test
     // Create a unique temporary directory for the workspace to avoid conflicts
     testWorkspace = fs.mkdtempSync(
@@ -136,12 +159,12 @@ describe('mcp-client', () => {
         promptRegistry,
         resourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
       await client.connect();
-      await client.discover({} as Config);
+      await client.discover(MOCK_CONTEXT);
       expect(mockedClient.listTools).toHaveBeenCalledWith(
         {},
         expect.objectContaining({ timeout: 600000, progressReporter: client }),
@@ -217,12 +240,12 @@ describe('mcp-client', () => {
         promptRegistry,
         resourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
       await client.connect();
-      await client.discover({} as Config);
+      await client.discover(MOCK_CONTEXT);
       expect(mockedToolRegistry.registerTool).toHaveBeenCalledTimes(2);
       expect(consoleWarnSpy).not.toHaveBeenCalled();
       consoleWarnSpy.mockRestore();
@@ -269,16 +292,17 @@ describe('mcp-client', () => {
         promptRegistry,
         resourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
       await client.connect();
-      await expect(client.discover({} as Config)).rejects.toThrow('Test error');
-      expect(coreEvents.emitFeedback).toHaveBeenCalledWith(
+      await expect(client.discover(MOCK_CONTEXT)).rejects.toThrow('Test error');
+      expect(MOCK_CONTEXT.emitMcpDiagnostic).toHaveBeenCalledWith(
         'error',
         `Error discovering prompts from test-server: Test error`,
         expect.any(Error),
+        'test-server',
       );
     });
 
@@ -323,12 +347,12 @@ describe('mcp-client', () => {
         promptRegistry,
         resourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
       await client.connect();
-      await expect(client.discover({} as Config)).rejects.toThrow(
+      await expect(client.discover(MOCK_CONTEXT)).rejects.toThrow(
         'No prompts, tools, or resources found on the server.',
       );
     });
@@ -383,12 +407,12 @@ describe('mcp-client', () => {
         promptRegistry,
         resourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
       await client.connect();
-      await client.discover({} as Config);
+      await client.discover(MOCK_CONTEXT);
       expect(mockedToolRegistry.registerTool).toHaveBeenCalledOnce();
     });
 
@@ -451,7 +475,7 @@ describe('mcp-client', () => {
         promptRegistry,
         resourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
@@ -532,7 +556,7 @@ describe('mcp-client', () => {
         promptRegistry,
         resourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
@@ -610,7 +634,7 @@ describe('mcp-client', () => {
         promptRegistry,
         resourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
@@ -696,12 +720,12 @@ describe('mcp-client', () => {
         promptRegistry,
         resourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
       await client.connect();
-      await client.discover({} as Config);
+      await client.discover(MOCK_CONTEXT);
       expect(mockedToolRegistry.registerTool).toHaveBeenCalledOnce();
       const registeredTool = vi.mocked(mockedToolRegistry.registerTool).mock
         .calls[0][0];
@@ -773,12 +797,12 @@ describe('mcp-client', () => {
         promptRegistry,
         resourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
       await client.connect();
-      await client.discover({} as Config);
+      await client.discover(MOCK_CONTEXT);
       expect(resourceRegistry.setResourcesForServer).toHaveBeenCalledWith(
         'test-server',
         [
@@ -859,12 +883,12 @@ describe('mcp-client', () => {
         promptRegistry,
         resourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
       await client.connect();
-      await client.discover({} as Config);
+      await client.discover(MOCK_CONTEXT);
 
       expect(mockedClient.setNotificationHandler).toHaveBeenCalledTimes(2);
       expect(resourceListHandler).toBeDefined();
@@ -878,9 +902,11 @@ describe('mcp-client', () => {
         [expect.objectContaining({ uri: 'file:///tmp/two.txt' })],
       );
 
-      expect(coreEvents.emitFeedback).toHaveBeenCalledWith(
+      expect(MOCK_CONTEXT.emitMcpDiagnostic).toHaveBeenCalledWith(
         'info',
         'Resources updated for server: test-server',
+        undefined,
+        'test-server',
       );
     });
 
@@ -943,12 +969,12 @@ describe('mcp-client', () => {
         promptRegistry,
         resourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
       await client.connect();
-      await client.discover({ sanitizationConfig: EMPTY_CONFIG } as Config);
+      await client.discover(MOCK_CONTEXT);
 
       expect(mockedClient.setNotificationHandler).toHaveBeenCalledTimes(2);
       expect(promptListHandler).toBeDefined();
@@ -963,9 +989,11 @@ describe('mcp-client', () => {
       expect(promptRegistry.registerPrompt).toHaveBeenLastCalledWith(
         expect.objectContaining({ name: 'two' }),
       );
-      expect(coreEvents.emitFeedback).toHaveBeenCalledWith(
+      expect(MOCK_CONTEXT.emitMcpDiagnostic).toHaveBeenCalledWith(
         'info',
         'Prompts updated for server: test-server',
+        undefined,
+        'test-server',
       );
     });
 
@@ -1025,12 +1053,12 @@ describe('mcp-client', () => {
         mockedPromptRegistry,
         resourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
       await client.connect();
-      await client.discover({} as Config);
+      await client.discover(MOCK_CONTEXT);
 
       expect(mockedToolRegistry.registerTool).toHaveBeenCalledOnce();
       expect(mockedPromptRegistry.registerPrompt).toHaveBeenCalledOnce();
@@ -1075,7 +1103,7 @@ describe('mcp-client', () => {
         {} as PromptRegistry,
         {} as ResourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
@@ -1112,7 +1140,7 @@ describe('mcp-client', () => {
         {} as PromptRegistry,
         {} as ResourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
@@ -1168,7 +1196,7 @@ describe('mcp-client', () => {
         {} as PromptRegistry,
         {} as ResourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
         onToolsUpdatedSpy,
@@ -1200,9 +1228,11 @@ describe('mcp-client', () => {
       expect(onToolsUpdatedSpy).toHaveBeenCalled();
 
       // It should emit feedback event
-      expect(coreEvents.emitFeedback).toHaveBeenCalledWith(
+      expect(MOCK_CONTEXT.emitMcpDiagnostic).toHaveBeenCalledWith(
         'info',
         'Tools updated for server: test-server',
+        undefined,
+        'test-server',
       );
     });
 
@@ -1239,7 +1269,7 @@ describe('mcp-client', () => {
         {} as PromptRegistry,
         {} as ResourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
@@ -1310,7 +1340,7 @@ describe('mcp-client', () => {
         {} as PromptRegistry,
         {} as ResourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
         onToolsUpdatedSpy,
@@ -1323,7 +1353,7 @@ describe('mcp-client', () => {
         {} as PromptRegistry,
         {} as ResourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
         onToolsUpdatedSpy,
@@ -1409,7 +1439,7 @@ describe('mcp-client', () => {
         {} as PromptRegistry,
         {} as ResourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
       );
@@ -1474,7 +1504,7 @@ describe('mcp-client', () => {
         {} as PromptRegistry,
         {} as ResourceRegistry,
         workspaceContext,
-        { sanitizationConfig: EMPTY_CONFIG } as Config,
+        MOCK_CONTEXT,
         false,
         '0.0.1',
         onToolsUpdatedSpy,
@@ -1526,7 +1556,7 @@ describe('mcp-client', () => {
             httpUrl: 'http://test-server',
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
 
         expect(transport).toBeInstanceOf(StreamableHTTPClientTransport);
@@ -1544,7 +1574,7 @@ describe('mcp-client', () => {
             headers: { Authorization: 'derp' },
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
 
         expect(transport).toBeInstanceOf(StreamableHTTPClientTransport);
@@ -1565,7 +1595,7 @@ describe('mcp-client', () => {
             url: 'http://test-server',
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
         expect(transport).toBeInstanceOf(StreamableHTTPClientTransport);
         expect(transport).toMatchObject({
@@ -1582,7 +1612,7 @@ describe('mcp-client', () => {
             headers: { Authorization: 'derp' },
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
 
         expect(transport).toBeInstanceOf(StreamableHTTPClientTransport);
@@ -1602,7 +1632,7 @@ describe('mcp-client', () => {
             type: 'http',
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
 
         expect(transport).toBeInstanceOf(StreamableHTTPClientTransport);
@@ -1620,7 +1650,7 @@ describe('mcp-client', () => {
             type: 'sse',
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
 
         expect(transport).toBeInstanceOf(SSEClientTransport);
@@ -1637,7 +1667,7 @@ describe('mcp-client', () => {
             url: 'http://test-server',
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
 
         expect(transport).toBeInstanceOf(StreamableHTTPClientTransport);
@@ -1656,7 +1686,7 @@ describe('mcp-client', () => {
             headers: { Authorization: 'Bearer token' },
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
 
         expect(transport).toBeInstanceOf(StreamableHTTPClientTransport);
@@ -1677,7 +1707,7 @@ describe('mcp-client', () => {
             headers: { 'X-API-Key': 'key123' },
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
 
         expect(transport).toBeInstanceOf(SSEClientTransport);
@@ -1697,7 +1727,7 @@ describe('mcp-client', () => {
             url: 'http://test-server-url',
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
 
         // httpUrl should take priority and create HTTP transport
@@ -1723,7 +1753,7 @@ describe('mcp-client', () => {
           cwd: 'test/cwd',
         },
         false,
-        EMPTY_CONFIG,
+        MOCK_CONTEXT,
       );
 
       expect(mockedTransport).toHaveBeenCalledWith({
@@ -1749,7 +1779,7 @@ describe('mcp-client', () => {
           cwd: 'test/cwd',
         },
         false,
-        EMPTY_CONFIG,
+        MOCK_CONTEXT,
       );
 
       const callArgs = mockedTransport.mock.calls[0][0];
@@ -1784,7 +1814,7 @@ describe('mcp-client', () => {
           },
         },
         false,
-        EMPTY_CONFIG,
+        MOCK_CONTEXT,
       );
 
       const callArgs = mockedTransport.mock.calls[0][0];
@@ -1819,7 +1849,7 @@ describe('mcp-client', () => {
           },
         },
         false,
-        EMPTY_CONFIG,
+        MOCK_CONTEXT,
       );
 
       const callArgs = mockedTransport.mock.calls[0][0];
@@ -1857,7 +1887,7 @@ describe('mcp-client', () => {
           },
         },
         false,
-        EMPTY_CONFIG,
+        MOCK_CONTEXT,
       );
 
       const callArgs = mockedTransport.mock.calls[0][0];
@@ -1888,7 +1918,7 @@ describe('mcp-client', () => {
             },
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
 
         const callArgs = mockedTransport.mock.calls[0][0];
@@ -1925,17 +1955,15 @@ describe('mcp-client', () => {
             },
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
 
         expect(transport).toBeInstanceOf(StreamableHTTPClientTransport);
-        // eslint-disable-next-line @typescript-eslint/no-explicit-any
-        const authProvider = (transport as any)._authProvider;
+        const testableTransport = transport as unknown as TestableTransport;
+        const authProvider = testableTransport._authProvider;
         expect(authProvider).toBeInstanceOf(GoogleCredentialProvider);
-        // eslint-disable-next-line @typescript-eslint/no-explicit-any
-        const googUserProject = (transport as any)._requestInit?.headers?.[
-          'X-Goog-User-Project'
-        ];
+        const googUserProject =
+          testableTransport._requestInit?.headers?.['X-Goog-User-Project'];
         expect(googUserProject).toBe('myproject');
       });
 
@@ -1958,14 +1986,14 @@ describe('mcp-client', () => {
             },
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
 
         expect(transport).toBeInstanceOf(StreamableHTTPClientTransport);
         expect(mockGetRequestHeaders).toHaveBeenCalled();
-        // eslint-disable-next-line @typescript-eslint/no-explicit-any
-        const headers = (transport as any)._requestInit?.headers;
-        expect(headers['X-Goog-User-Project']).toBe('provider-project');
+        const testableTransport = transport as unknown as TestableTransport;
+        const headers = testableTransport._requestInit?.headers;
+        expect(headers?.['X-Goog-User-Project']).toBe('provider-project');
       });
 
       it('should prioritize provider headers over config headers', async () => {
@@ -1990,13 +2018,13 @@ describe('mcp-client', () => {
             },
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
 
         expect(transport).toBeInstanceOf(StreamableHTTPClientTransport);
-        // eslint-disable-next-line @typescript-eslint/no-explicit-any
-        const headers = (transport as any)._requestInit?.headers;
-        expect(headers['X-Goog-User-Project']).toBe('provider-project');
+        const testableTransport = transport as unknown as TestableTransport;
+        const headers = testableTransport._requestInit?.headers;
+        expect(headers?.['X-Goog-User-Project']).toBe('provider-project');
       });
 
       it('should use GoogleCredentialProvider with SSE transport', async () => {
@@ -2011,12 +2039,12 @@ describe('mcp-client', () => {
             },
           },
           false,
-          EMPTY_CONFIG,
+          MOCK_CONTEXT,
         );
 
         expect(transport).toBeInstanceOf(SSEClientTransport);
-        // eslint-disable-next-line @typescript-eslint/no-explicit-any
-        const authProvider = (transport as any)._authProvider;
+        const testableTransport = transport as unknown as TestableTransport;
+        const authProvider = testableTransport._authProvider;
         expect(authProvider).toBeInstanceOf(GoogleCredentialProvider);
       });
 
@@ -2031,7 +2059,7 @@ describe('mcp-client', () => {
               },
             },
             false,
-            EMPTY_CONFIG,
+            MOCK_CONTEXT,
           ),
         ).rejects.toThrow(
           'URL must be provided in the config for Google Credentials provider',
@@ -2178,12 +2206,11 @@ describe('connectToMcpServer with OAuth', () => {
       scopes: ['test-scope'],
     });
 
-    // We need this to be an any type because we dig into its private state.
-    // eslint-disable-next-line @typescript-eslint/no-explicit-any
-    let capturedTransport: any;
+    // We need this to be typed to dig into its private state.
+    let capturedTransport: TestableTransport | undefined;
     vi.mocked(mockedClient.connect).mockImplementationOnce(
       async (transport) => {
-        capturedTransport = transport;
+        capturedTransport = transport as unknown as TestableTransport;
         return Promise.resolve();
       },
     );
@@ -2194,15 +2221,15 @@ describe('connectToMcpServer with OAuth', () => {
       { httpUrl: serverUrl, oauth: { enabled: true } },
       false,
       workspaceContext,
-      EMPTY_CONFIG,
+      MOCK_CONTEXT,
     );
 
     expect(client).toBe(mockedClient);
     expect(mockedClient.connect).toHaveBeenCalledTimes(2);
     expect(mockAuthProvider.authenticate).toHaveBeenCalledOnce();
 
-    const authHeader =
-      capturedTransport._requestInit?.headers?.['Authorization'];
+    const authHeader = (capturedTransport as TestableTransport)._requestInit
+      ?.headers?.['Authorization'];
     expect(authHeader).toBe('Bearer test-access-token');
   });
 
@@ -2224,12 +2251,11 @@ describe('connectToMcpServer with OAuth', () => {
       'test-access-token-from-discovery',
     );
 
-    // We need this to be an any type because we dig into its private state.
-    // eslint-disable-next-line @typescript-eslint/no-explicit-any
-    let capturedTransport: any;
+    // We need this to be typed to dig into its private state.
+    let capturedTransport: TestableTransport | undefined;
     vi.mocked(mockedClient.connect).mockImplementationOnce(
       async (transport) => {
-        capturedTransport = transport;
+        capturedTransport = transport as unknown as TestableTransport;
         return Promise.resolve();
       },
     );
@@ -2240,7 +2266,7 @@ describe('connectToMcpServer with OAuth', () => {
       { httpUrl: serverUrl, oauth: { enabled: true } },
       false,
       workspaceContext,
-      EMPTY_CONFIG,
+      MOCK_CONTEXT,
     );
 
     expect(client).toBe(mockedClient);
@@ -2248,8 +2274,8 @@ describe('connectToMcpServer with OAuth', () => {
     expect(mockAuthProvider.authenticate).toHaveBeenCalledOnce();
     expect(OAuthUtils.discoverOAuthConfig).toHaveBeenCalledWith(serverUrl);
 
-    const authHeader =
-      capturedTransport._requestInit?.headers?.['Authorization'];
+    const authHeader = (capturedTransport as TestableTransport)._requestInit
+      ?.headers?.['Authorization'];
     expect(authHeader).toBe('Bearer test-access-token-from-discovery');
   });
 
@@ -2280,7 +2306,7 @@ describe('connectToMcpServer with OAuth', () => {
       { httpUrl: serverUrl, oauth: { enabled: true } },
       false,
       workspaceContext,
-      EMPTY_CONFIG,
+      MOCK_CONTEXT,
     );
 
     expect(client).toBe(mockedClient);
@@ -2324,7 +2350,7 @@ describe('connectToMcpServer with OAuth', () => {
       { httpUrl: serverUrl, oauth: { enabled: true } },
       false,
       workspaceContext,
-      EMPTY_CONFIG,
+      MOCK_CONTEXT,
     );
 
     expect(client).toBe(mockedClient);
@@ -2380,7 +2406,7 @@ describe('connectToMcpServer - HTTP→SSE fallback', () => {
         { url: 'http://test-server', type: 'http' },
         false,
         workspaceContext,
-        EMPTY_CONFIG,
+        MOCK_CONTEXT,
       ),
     ).rejects.toThrow('Connection failed');
 
@@ -2400,7 +2426,7 @@ describe('connectToMcpServer - HTTP→SSE fallback', () => {
         { url: 'http://test-server', type: 'sse' },
         false,
         workspaceContext,
-        EMPTY_CONFIG,
+        MOCK_CONTEXT,
       ),
     ).rejects.toThrow('Connection failed');
 
@@ -2419,7 +2445,7 @@ describe('connectToMcpServer - HTTP→SSE fallback', () => {
       { url: 'http://test-server' },
       false,
       workspaceContext,
-      EMPTY_CONFIG,
+      MOCK_CONTEXT,
     );
 
     expect(client).toBe(mockedClient);
@@ -2442,7 +2468,7 @@ describe('connectToMcpServer - HTTP→SSE fallback', () => {
         { url: 'http://test-server' },
         false,
         workspaceContext,
-        EMPTY_CONFIG,
+        MOCK_CONTEXT,
       ),
     ).rejects.toThrow('Server error');
 
@@ -2460,7 +2486,7 @@ describe('connectToMcpServer - HTTP→SSE fallback', () => {
       { url: 'http://test-server' },
       false,
       workspaceContext,
-      EMPTY_CONFIG,
+      MOCK_CONTEXT,
     );
 
     expect(client).toBe(mockedClient);
@@ -2545,7 +2571,7 @@ describe('connectToMcpServer - OAuth with transport fallback', () => {
       { url: 'http://test-server', oauth: { enabled: true } },
       false,
       workspaceContext,
-      EMPTY_CONFIG,
+      MOCK_CONTEXT,
     );
 
     expect(client).toBe(mockedClient);
diff --git a/packages/core/src/tools/mcp-client.ts b/packages/core/src/tools/mcp-client.ts
index c393273dbf..18c2029d9e 100644
--- a/packages/core/src/tools/mcp-client.ts
+++ b/packages/core/src/tools/mcp-client.ts
@@ -150,7 +150,7 @@ export class McpClient implements McpProgressReporter {
     private readonly promptRegistry: PromptRegistry,
     private readonly resourceRegistry: ResourceRegistry,
     private readonly workspaceContext: WorkspaceContext,
-    private readonly cliConfig: Config,
+    private readonly cliConfig: McpContext,
     private readonly debugMode: boolean,
     private readonly clientVersion: string,
     private readonly onToolsUpdated?: (signal?: AbortSignal) => Promise<void>,
@@ -173,7 +173,7 @@ export class McpClient implements McpProgressReporter {
         this.serverConfig,
         this.debugMode,
         this.workspaceContext,
-        this.cliConfig.sanitizationConfig,
+        this.cliConfig,
       );
 
       this.registerNotificationHandlers();
@@ -184,10 +184,11 @@ export class McpClient implements McpProgressReporter {
           return;
         }
         if (originalOnError) originalOnError(error);
-        coreEvents.emitFeedback(
+        this.cliConfig.emitMcpDiagnostic(
           'error',
           `MCP ERROR (${this.serverName})`,
           error,
+          this.serverName,
         );
         this.updateStatus(MCPServerStatus.DISCONNECTED);
       };
@@ -201,7 +202,7 @@ export class McpClient implements McpProgressReporter {
   /**
    * Discovers tools and prompts from the MCP server.
    */
-  async discover(cliConfig: Config): Promise<void> {
+  async discover(cliConfig: McpContext): Promise<void> {
     this.assertConnected();
 
     const prompts = await this.fetchPrompts();
@@ -265,7 +266,7 @@ export class McpClient implements McpProgressReporter {
   }
 
   private async discoverTools(
-    cliConfig: Config,
+    cliConfig: McpContext,
     options?: { timeout?: number; signal?: AbortSignal },
   ): Promise<DiscoveredMCPTool[]> {
     this.assertConnected();
@@ -288,12 +289,17 @@ export class McpClient implements McpProgressReporter {
     signal?: AbortSignal;
   }): Promise<DiscoveredMCPPrompt[]> {
     this.assertConnected();
-    return discoverPrompts(this.serverName, this.client!, options);
+    return discoverPrompts(
+      this.serverName,
+      this.client!,
+      this.cliConfig,
+      options,
+    );
   }
 
   private async discoverResources(): Promise<Resource[]> {
     this.assertConnected();
-    return discoverResources(this.serverName, this.client!);
+    return discoverResources(this.serverName, this.client!, this.cliConfig);
   }
 
   private updateResourceRegistry(resources: Resource[]): void {
@@ -437,9 +443,11 @@ export class McpClient implements McpProgressReporter {
 
         clearTimeout(timeoutId);
 
-        coreEvents.emitFeedback(
+        this.cliConfig.emitMcpDiagnostic(
           'info',
           `Resources updated for server: ${this.serverName}`,
+          undefined,
+          this.serverName,
         );
       } while (this.pendingResourceRefresh);
     } catch (error) {
@@ -508,9 +516,11 @@ export class McpClient implements McpProgressReporter {
 
         clearTimeout(timeoutId);
 
-        coreEvents.emitFeedback(
+        this.cliConfig.emitMcpDiagnostic(
           'info',
           `Prompts updated for server: ${this.serverName}`,
+          undefined,
+          this.serverName,
         );
       } while (this.pendingPromptRefresh);
     } catch (error) {
@@ -585,9 +595,11 @@ export class McpClient implements McpProgressReporter {
 
         clearTimeout(timeoutId);
 
-        coreEvents.emitFeedback(
+        this.cliConfig.emitMcpDiagnostic(
           'info',
           `Tools updated for server: ${this.serverName}`,
+          undefined,
+          this.serverName,
         );
       } while (this.pendingToolRefresh);
     } catch (error) {
@@ -719,6 +731,7 @@ async function handleAutomaticOAuth(
   mcpServerName: string,
   mcpServerConfig: MCPServerConfig,
   wwwAuthenticate: string,
+  cliConfig: McpContext,
 ): Promise<boolean> {
   try {
     debugLogger.log(`🔐 '${mcpServerName}' requires OAuth authentication`);
@@ -738,9 +751,11 @@ async function handleAutomaticOAuth(
     }
 
     if (!oauthConfig) {
-      coreEvents.emitFeedback(
+      cliConfig.emitMcpDiagnostic(
         'error',
         `Could not configure OAuth for '${mcpServerName}' - please authenticate manually with /mcp auth ${mcpServerName}`,
+        undefined,
+        mcpServerName,
       );
       return false;
     }
@@ -768,10 +783,11 @@ async function handleAutomaticOAuth(
     );
     return true;
   } catch (error) {
-    coreEvents.emitFeedback(
+    cliConfig.emitMcpDiagnostic(
       'error',
       `Failed to handle automatic OAuth for server '${mcpServerName}': ${getErrorMessage(error)}`,
       error,
+      mcpServerName,
     );
     return false;
   }
@@ -840,14 +856,14 @@ function createAuthProvider(
  * @param mcpServerName The name of the MCP server
  * @param mcpServerConfig The MCP server configuration
  * @param accessToken The OAuth access token
- * @param sanitizationConfig Configuration for environment sanitization
+ * @param cliConfig The CLI configuration providing sanitization and diagnostic reporting
  * @returns The transport with OAuth token, or null if creation fails
  */
 async function createTransportWithOAuth(
   mcpServerName: string,
   mcpServerConfig: MCPServerConfig,
   accessToken: string,
-  sanitizationConfig: EnvironmentSanitizationConfig,
+  cliConfig: McpContext,
 ): Promise<StreamableHTTPClientTransport | SSEClientTransport | null> {
   try {
     const headers: Record<string, string> = {
@@ -859,16 +875,17 @@ async function createTransportWithOAuth(
       requestInit: createTransportRequestInit(
         mcpServerConfig,
         headers,
-        sanitizationConfig,
+        cliConfig.sanitizationConfig,
       ),
     };
 
     return createUrlTransport(mcpServerName, mcpServerConfig, transportOptions);
   } catch (error) {
-    coreEvents.emitFeedback(
+    cliConfig.emitMcpDiagnostic(
       'error',
       `Failed to create OAuth transport for server '${mcpServerName}': ${getErrorMessage(error)}`,
       error,
+      mcpServerName,
     );
     return null;
   }
@@ -990,7 +1007,7 @@ export async function connectAndDiscover(
   promptRegistry: PromptRegistry,
   debugMode: boolean,
   workspaceContext: WorkspaceContext,
-  cliConfig: Config,
+  cliConfig: McpContext,
 ): Promise<void> {
   updateMCPServerStatus(mcpServerName, MCPServerStatus.CONNECTING);
 
@@ -1002,16 +1019,21 @@ export async function connectAndDiscover(
       mcpServerConfig,
       debugMode,
       workspaceContext,
-      cliConfig.sanitizationConfig,
+      cliConfig,
     );
 
     mcpClient.onerror = (error) => {
-      coreEvents.emitFeedback('error', `MCP ERROR (${mcpServerName}):`, error);
+      cliConfig.emitMcpDiagnostic(
+        'error',
+        `MCP ERROR (${mcpServerName}):`,
+        error,
+        mcpServerName,
+      );
       updateMCPServerStatus(mcpServerName, MCPServerStatus.DISCONNECTED);
     };
 
     // Attempt to discover both prompts and tools
-    const prompts = await discoverPrompts(mcpServerName, mcpClient);
+    const prompts = await discoverPrompts(mcpServerName, mcpClient, cliConfig);
     const tools = await discoverTools(
       mcpServerName,
       mcpServerConfig,
@@ -1042,12 +1064,13 @@ export async function connectAndDiscover(
       // eslint-disable-next-line @typescript-eslint/no-floating-promises
       mcpClient.close();
     }
-    coreEvents.emitFeedback(
+    cliConfig.emitMcpDiagnostic(
       'error',
       `Error connecting to MCP server '${mcpServerName}': ${getErrorMessage(
         error,
       )}`,
       error,
+      mcpServerName,
     );
     updateMCPServerStatus(mcpServerName, MCPServerStatus.DISCONNECTED);
   }
@@ -1070,7 +1093,7 @@ export async function discoverTools(
   mcpServerName: string,
   mcpServerConfig: MCPServerConfig,
   mcpClient: Client,
-  cliConfig: Config,
+  cliConfig: McpContext,
   messageBus: MessageBus,
   options?: {
     timeout?: number;
@@ -1119,13 +1142,14 @@ export async function discoverTools(
 
         discoveredTools.push(tool);
       } catch (error) {
-        coreEvents.emitFeedback(
+        cliConfig.emitMcpDiagnostic(
           'error',
           `Error discovering tool: '${
             toolDef.name
             // eslint-disable-next-line @typescript-eslint/no-unsafe-type-assertion
           }' from MCP server '${mcpServerName}': ${(error as Error).message}`,
           error,
+          mcpServerName,
         );
       }
     }
@@ -1135,12 +1159,13 @@ export async function discoverTools(
       error instanceof Error &&
       !error.message?.includes('Method not found')
     ) {
-      coreEvents.emitFeedback(
+      cliConfig.emitMcpDiagnostic(
         'error',
         `Error discovering tools from ${mcpServerName}: ${getErrorMessage(
           error,
         )}`,
         error,
+        mcpServerName,
       );
     }
     return [];
@@ -1236,6 +1261,7 @@ class McpCallableTool implements CallableTool {
 export async function discoverPrompts(
   mcpServerName: string,
   mcpClient: Client,
+  cliConfig: McpContext,
   options?: { signal?: AbortSignal },
 ): Promise<DiscoveredMCPPrompt[]> {
   // Only request prompts if the server supports them.
@@ -1247,19 +1273,26 @@ export async function discoverPrompts(
       ...prompt,
       serverName: mcpServerName,
       invoke: (params: Record<string, unknown>) =>
-        invokeMcpPrompt(mcpServerName, mcpClient, prompt.name, params),
+        invokeMcpPrompt(
+          mcpServerName,
+          mcpClient,
+          prompt.name,
+          params,
+          cliConfig,
+        ),
     }));
   } catch (error) {
     // It's okay if the method is not found, which is a common case.
     if (error instanceof Error && error.message?.includes('Method not found')) {
       return [];
     }
-    coreEvents.emitFeedback(
+    cliConfig.emitMcpDiagnostic(
       'error',
       `Error discovering prompts from ${mcpServerName}: ${getErrorMessage(
         error,
       )}`,
       error,
+      mcpServerName,
     );
     throw error;
   }
@@ -1268,18 +1301,20 @@ export async function discoverPrompts(
 export async function discoverResources(
   mcpServerName: string,
   mcpClient: Client,
+  cliConfig: McpContext,
 ): Promise<Resource[]> {
   if (mcpClient.getServerCapabilities()?.resources == null) {
     return [];
   }
 
-  const resources = await listResources(mcpServerName, mcpClient);
+  const resources = await listResources(mcpServerName, mcpClient, cliConfig);
   return resources;
 }
 
 async function listResources(
   mcpServerName: string,
   mcpClient: Client,
+  cliConfig: McpContext,
 ): Promise<Resource[]> {
   const resources: Resource[] = [];
   let cursor: string | undefined;
@@ -1299,12 +1334,13 @@ async function listResources(
     if (error instanceof Error && error.message?.includes('Method not found')) {
       return [];
     }
-    coreEvents.emitFeedback(
+    cliConfig.emitMcpDiagnostic(
       'error',
       `Error discovering resources from ${mcpServerName}: ${getErrorMessage(
         error,
       )}`,
       error,
+      mcpServerName,
     );
     throw error;
   }
@@ -1325,7 +1361,9 @@ export async function invokeMcpPrompt(
   mcpClient: Client,
   promptName: string,
   promptParams: Record<string, unknown>,
+  cliConfig: McpContext,
 ): Promise<GetPromptResult> {
+  cliConfig.setUserInteractedWithMcp?.();
   try {
     const sanitizedParams: Record<string, string> = {};
     for (const [key, value] of Object.entries(promptParams)) {
@@ -1345,12 +1383,13 @@ export async function invokeMcpPrompt(
       error instanceof Error &&
       !error.message?.includes('Method not found')
     ) {
-      coreEvents.emitFeedback(
+      cliConfig.emitMcpDiagnostic(
         'error',
         `Error invoking prompt '${promptName}' from ${mcpServerName} ${promptParams}: ${getErrorMessage(
           error,
         )}`,
         error,
+        mcpServerName,
       );
     }
     throw error;
@@ -1435,14 +1474,17 @@ async function connectWithSSETransport(
  * @param serverName The name of the MCP server
  * @throws Always throws an error with authentication instructions
  */
-async function showAuthRequiredMessage(serverName: string): Promise<never> {
+async function showAuthRequiredMessage(
+  serverName: string,
+  cliConfig: McpContext,
+): Promise<never> {
   const hasRejectedToken = !!(await getStoredOAuthToken(serverName));
 
   const message = hasRejectedToken
     ? `MCP server '${serverName}' rejected stored OAuth token. Please re-authenticate using: /mcp auth ${serverName}`
     : `MCP server '${serverName}' requires authentication using: /mcp auth ${serverName}`;
 
-  coreEvents.emitFeedback('info', message);
+  cliConfig.emitMcpDiagnostic('info', message, undefined, serverName);
   throw new UnauthorizedError(message);
 }
 
@@ -1455,7 +1497,7 @@ async function showAuthRequiredMessage(serverName: string): Promise<never> {
  * @param config The MCP server configuration
  * @param accessToken The OAuth access token to use
  * @param httpReturned404 Whether the HTTP transport returned 404 (indicating SSE-only server)
- * @param sanitizationConfig Configuration for environment sanitization
+ * @param cliConfig The CLI configuration providing sanitization and diagnostic reporting
  */
 async function retryWithOAuth(
   client: Client,
@@ -1463,7 +1505,7 @@ async function retryWithOAuth(
   config: MCPServerConfig,
   accessToken: string,
   httpReturned404: boolean,
-  sanitizationConfig: EnvironmentSanitizationConfig,
+  cliConfig: McpContext,
 ): Promise<void> {
   if (httpReturned404) {
     // HTTP returned 404, only try SSE
@@ -1484,7 +1526,7 @@ async function retryWithOAuth(
     serverName,
     config,
     accessToken,
-    sanitizationConfig,
+    cliConfig,
   );
   if (!httpTransport) {
     throw new Error(
@@ -1520,6 +1562,23 @@ async function retryWithOAuth(
   }
 }
 
+/**
+ * Interface for MCP operations that require configuration or diagnostic reporting.
+ * This is implemented by the central Config class and can be mocked for testing
+ * or used by the non-interactive CLI.
+ */
+export interface McpContext {
+  readonly sanitizationConfig: EnvironmentSanitizationConfig;
+  emitMcpDiagnostic(
+    severity: 'info' | 'warning' | 'error',
+    message: string,
+    error?: unknown,
+    serverName?: string,
+  ): void;
+  setUserInteractedWithMcp?(): void;
+  isTrustedFolder(): boolean;
+}
+
 /**
  * Creates and connects an MCP client to a server based on the provided configuration.
  * It determines the appropriate transport (Stdio, SSE, or Streamable HTTP) and
@@ -1536,7 +1595,7 @@ export async function connectToMcpServer(
   mcpServerConfig: MCPServerConfig,
   debugMode: boolean,
   workspaceContext: WorkspaceContext,
-  sanitizationConfig: EnvironmentSanitizationConfig,
+  cliConfig: McpContext,
 ): Promise<Client> {
   const mcpClient = new Client(
     {
@@ -1603,7 +1662,7 @@ export async function connectToMcpServer(
       mcpServerName,
       mcpServerConfig,
       debugMode,
-      sanitizationConfig,
+      cliConfig,
     );
     try {
       await mcpClient.connect(transport, {
@@ -1682,7 +1741,7 @@ export async function connectToMcpServer(
       const shouldTriggerOAuth = mcpServerConfig.oauth?.enabled;
 
       if (!shouldTriggerOAuth) {
-        await showAuthRequiredMessage(mcpServerName);
+        await showAuthRequiredMessage(mcpServerName, cliConfig);
       }
 
       // Try to extract www-authenticate header from the error
@@ -1748,6 +1807,7 @@ export async function connectToMcpServer(
           mcpServerName,
           mcpServerConfig,
           wwwAuthenticate,
+          cliConfig,
         );
         if (oauthSuccess) {
           // Retry connection with OAuth token
@@ -1764,7 +1824,7 @@ export async function connectToMcpServer(
             mcpServerConfig,
             accessToken,
             httpReturned404,
-            sanitizationConfig,
+            cliConfig,
           );
           return mcpClient;
         } else {
@@ -1778,7 +1838,7 @@ export async function connectToMcpServer(
         const shouldTryDiscovery = mcpServerConfig.oauth?.enabled;
 
         if (!shouldTryDiscovery) {
-          await showAuthRequiredMessage(mcpServerName);
+          await showAuthRequiredMessage(mcpServerName, cliConfig);
         }
 
         // For SSE/HTTP servers, try to discover OAuth configuration from the base URL
@@ -1837,7 +1897,7 @@ export async function connectToMcpServer(
               mcpServerName,
               mcpServerConfig,
               accessToken,
-              sanitizationConfig,
+              cliConfig,
             );
             if (!oauthTransport) {
               throw new Error(
@@ -1925,7 +1985,7 @@ export async function createTransport(
   mcpServerName: string,
   mcpServerConfig: MCPServerConfig,
   debugMode: boolean,
-  sanitizationConfig: EnvironmentSanitizationConfig,
+  cliConfig: McpContext,
 ): Promise<Transport> {
   const noUrl = !mcpServerConfig.url && !mcpServerConfig.httpUrl;
   if (noUrl) {
@@ -1963,9 +2023,11 @@ export async function createTransport(
 
         if (!accessToken) {
           // Emit info message (not error) since this is expected behavior
-          coreEvents.emitFeedback(
+          cliConfig.emitMcpDiagnostic(
             'info',
             `MCP server '${mcpServerName}' requires authentication using: /mcp auth ${mcpServerName}`,
+            undefined,
+            mcpServerName,
           );
         }
       } else {
@@ -1988,7 +2050,7 @@ export async function createTransport(
       requestInit: createTransportRequestInit(
         mcpServerConfig,
         headers,
-        sanitizationConfig,
+        cliConfig.sanitizationConfig,
       ),
       authProvider,
     };
@@ -1997,12 +2059,17 @@ export async function createTransport(
   }
 
   if (mcpServerConfig.command) {
+    if (!cliConfig.isTrustedFolder()) {
+      throw new Error(
+        `MCP server '${mcpServerName}' uses stdio transport but current folder is not trusted. Use 'gemini trust' to enable it.`,
+      );
+    }
     const extensionEnv = getExtensionEnvironment(mcpServerConfig.extension);
     const expansionEnv = { ...process.env, ...extensionEnv };
 
     // 1. Sanitize the base process environment to prevent unintended leaks of system-wide secrets.
     const sanitizedEnv = sanitizeEnvironment(expansionEnv, {
-      ...sanitizationConfig,
+      ...cliConfig.sanitizationConfig,
       enableEnvironmentVariableRedaction: true,
     });
 
diff --git a/packages/core/src/tools/mcp-tool.ts b/packages/core/src/tools/mcp-tool.ts
index 18c1638c95..3d492457f2 100644
--- a/packages/core/src/tools/mcp-tool.ts
+++ b/packages/core/src/tools/mcp-tool.ts
@@ -20,8 +20,8 @@ import {
 } from './tools.js';
 import type { CallableTool, FunctionCall, Part } from '@google/genai';
 import { ToolErrorType } from './tool-error.js';
-import type { Config } from '../config/config.js';
 import type { MessageBus } from '../confirmation-bus/message-bus.js';
+import type { McpContext } from './mcp-client.js';
 
 /**
  * The separator used to qualify MCP tool names with their server prefix.
@@ -89,7 +89,7 @@ export class DiscoveredMCPToolInvocation extends BaseToolInvocation<
     messageBus: MessageBus,
     readonly trust?: boolean,
     params: ToolParams = {},
-    private readonly cliConfig?: Config,
+    private readonly cliConfig?: McpContext,
     private readonly toolDescription?: string,
     private readonly toolParameterSchema?: unknown,
     toolAnnotationsData?: Record<string, unknown>,
@@ -184,6 +184,7 @@ export class DiscoveredMCPToolInvocation extends BaseToolInvocation<
   }
 
   async execute(signal: AbortSignal): Promise<ToolResult> {
+    this.cliConfig?.setUserInteractedWithMcp?.();
     const functionCalls: FunctionCall[] = [
       {
         name: this.serverToolName,
@@ -266,7 +267,7 @@ export class DiscoveredMCPTool extends BaseDeclarativeTool<
     readonly trust?: boolean,
     isReadOnly?: boolean,
     nameOverride?: string,
-    private readonly cliConfig?: Config,
+    private readonly cliConfig?: McpContext,
     override readonly extensionName?: string,
     override readonly extensionId?: string,
     private readonly _toolAnnotations?: Record<string, unknown>,
diff --git a/packages/core/src/utils/envExpansion.ts b/packages/core/src/utils/envExpansion.ts
index 938d439ac5..c17d91e1f7 100644
--- a/packages/core/src/utils/envExpansion.ts
+++ b/packages/core/src/utils/envExpansion.ts
@@ -4,7 +4,7 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
-import { expand } from 'dotenv-expand';
+import { expand, type DotenvExpandOutput } from 'dotenv-expand';
 
 /**
  * Expands environment variables in a string using the provided environment record.
@@ -45,7 +45,7 @@ export function expandEnvVars(
     }
   }
 
-  const result = expand({
+  const result: DotenvExpandOutput = expand({
     parsed: { [dummyKey]: processedStr },
     processEnv,
   });
diff --git a/packages/core/src/utils/errors.test.ts b/packages/core/src/utils/errors.test.ts
index b3df89ef93..7ea319e274 100644
--- a/packages/core/src/utils/errors.test.ts
+++ b/packages/core/src/utils/errors.test.ts
@@ -11,6 +11,7 @@ import {
   toFriendlyError,
   BadRequestError,
   ForbiddenError,
+  AccountSuspendedError,
   getErrorMessage,
   getErrorType,
   FatalAuthenticationError,
@@ -127,9 +128,86 @@ describe('toFriendlyError', () => {
     };
     const result = toFriendlyError(error);
     expect(result).toBeInstanceOf(ForbiddenError);
+    expect(result).not.toBeInstanceOf(AccountSuspendedError);
     expect((result as ForbiddenError).message).toBe('Forbidden');
   });
 
+  it('should return AccountSuspendedError for 403 with TOS_VIOLATION reason in details', () => {
+    const error = {
+      response: {
+        data: {
+          error: {
+            code: 403,
+            message:
+              'This service has been disabled in this account for violation of Terms of Service.',
+            details: [
+              {
+                '@type': 'type.googleapis.com/google.rpc.ErrorInfo',
+                reason: 'TOS_VIOLATION',
+                domain: 'example.googleapis.com',
+                metadata: {
+                  uiMessage: 'true',
+                  appeal_url_link_text: 'Appeal Here',
+                  appeal_url: 'https://example.com/appeal',
+                },
+              },
+            ],
+          },
+        },
+      },
+    };
+    const result = toFriendlyError(error);
+    expect(result).toBeInstanceOf(AccountSuspendedError);
+    expect(result).toBeInstanceOf(ForbiddenError);
+    const suspended = result as AccountSuspendedError;
+    expect(suspended.message).toBe(
+      'This service has been disabled in this account for violation of Terms of Service.',
+    );
+    expect(suspended.appealUrl).toBe('https://example.com/appeal');
+    expect(suspended.appealLinkText).toBe('Appeal Here');
+  });
+
+  it('should return ForbiddenError for 403 with violation message but no TOS_VIOLATION detail', () => {
+    const error = {
+      response: {
+        data: {
+          error: {
+            code: 403,
+            message:
+              'This service has been disabled in this account for violation of Terms of Service.',
+          },
+        },
+      },
+    };
+    const result = toFriendlyError(error);
+    expect(result).toBeInstanceOf(ForbiddenError);
+    expect(result).not.toBeInstanceOf(AccountSuspendedError);
+  });
+
+  it('should return ForbiddenError for 403 with non-TOS_VIOLATION detail', () => {
+    const error = {
+      response: {
+        data: {
+          error: {
+            code: 403,
+            message: 'Forbidden',
+            details: [
+              {
+                '@type': 'type.googleapis.com/google.rpc.ErrorInfo',
+                reason: 'ACCESS_DENIED',
+                domain: 'googleapis.com',
+                metadata: {},
+              },
+            ],
+          },
+        },
+      },
+    };
+    const result = toFriendlyError(error);
+    expect(result).toBeInstanceOf(ForbiddenError);
+    expect(result).not.toBeInstanceOf(AccountSuspendedError);
+  });
+
   it('should parse stringified JSON data', () => {
     const error = {
       response: {
@@ -236,6 +314,9 @@ describe('getErrorType', () => {
       'FatalCancellationError',
     );
     expect(getErrorType(new ForbiddenError('test'))).toBe('ForbiddenError');
+    expect(getErrorType(new AccountSuspendedError('test'))).toBe(
+      'AccountSuspendedError',
+    );
     expect(getErrorType(new UnauthorizedError('test'))).toBe(
       'UnauthorizedError',
     );
diff --git a/packages/core/src/utils/errors.ts b/packages/core/src/utils/errors.ts
index 62db5dcbf4..0fd9c1b7c1 100644
--- a/packages/core/src/utils/errors.ts
+++ b/packages/core/src/utils/errors.ts
@@ -4,6 +4,8 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
+import { parseGoogleApiError, type ErrorInfo } from './googleErrors.js';
+
 interface GaxiosError {
   response?: {
     data?: unknown;
@@ -107,6 +109,17 @@ export class CanceledError extends Error {
 }
 
 export class ForbiddenError extends Error {}
+export class AccountSuspendedError extends ForbiddenError {
+  readonly appealUrl?: string;
+  readonly appealLinkText?: string;
+
+  constructor(message: string, metadata?: Record<string, string>) {
+    super(message);
+    this.name = 'AccountSuspendedError';
+    this.appealUrl = metadata?.['appeal_url'];
+    this.appealLinkText = metadata?.['appeal_url_link_text'];
+  }
+}
 export class UnauthorizedError extends Error {}
 export class BadRequestError extends Error {}
 
@@ -157,6 +170,24 @@ function isResponseData(data: unknown): data is ResponseData {
 }
 
 export function toFriendlyError(error: unknown): unknown {
+  // First, try structured parsing for TOS_VIOLATION detection.
+  const googleApiError = parseGoogleApiError(error);
+  if (googleApiError && googleApiError.code === 403) {
+    const tosDetail = googleApiError.details.find(
+      (d): d is ErrorInfo =>
+        d['@type'] === 'type.googleapis.com/google.rpc.ErrorInfo' &&
+        'reason' in d &&
+        d.reason === 'TOS_VIOLATION',
+    );
+    if (tosDetail) {
+      return new AccountSuspendedError(
+        googleApiError.message,
+        tosDetail.metadata,
+      );
+    }
+  }
+
+  // Fall back to basic Gaxios error parsing for other HTTP errors.
   if (isGaxiosError(error)) {
     const data = parseResponseData(error);
     if (data && data.error && data.error.message && data.error.code) {
@@ -166,9 +197,6 @@ export function toFriendlyError(error: unknown): unknown {
         case 401:
           return new UnauthorizedError(data.error.message);
         case 403:
-          // It's import to pass the message here since it might
-          // explain the cause like "the cloud project you're
-          // using doesn't have code assist enabled".
           return new ForbiddenError(data.error.message);
         default:
       }
@@ -177,6 +205,13 @@ export function toFriendlyError(error: unknown): unknown {
   return error;
 }
 
+export function isAccountSuspendedError(
+  error: unknown,
+): AccountSuspendedError | null {
+  const friendly = toFriendlyError(error);
+  return friendly instanceof AccountSuspendedError ? friendly : null;
+}
+
 function parseResponseData(error: GaxiosError): ResponseData | undefined {
   let data = error.response?.data;
   // Inexplicably, Gaxios sometimes doesn't JSONify the response data.
diff --git a/packages/core/src/utils/googleErrors.ts b/packages/core/src/utils/googleErrors.ts
index 88f78e35d6..f7f972f568 100644
--- a/packages/core/src/utils/googleErrors.ts
+++ b/packages/core/src/utils/googleErrors.ts
@@ -16,8 +16,8 @@
 export interface ErrorInfo {
   '@type': 'type.googleapis.com/google.rpc.ErrorInfo';
   reason: string;
-  domain: string;
-  metadata: { [key: string]: string };
+  domain?: string;
+  metadata?: { [key: string]: string };
 }
 
 export interface RetryInfo {
diff --git a/packages/core/src/utils/googleQuotaErrors.test.ts b/packages/core/src/utils/googleQuotaErrors.test.ts
index 185f48e92a..67c9ae5d3a 100644
--- a/packages/core/src/utils/googleQuotaErrors.test.ts
+++ b/packages/core/src/utils/googleQuotaErrors.test.ts
@@ -313,6 +313,26 @@ describe('classifyGoogleError', () => {
     expect(result).toBeInstanceOf(TerminalQuotaError);
   });
 
+  it('should return TerminalQuotaError for INSUFFICIENT_G1_CREDITS_BALANCE without domain', () => {
+    const apiError: GoogleApiError = {
+      code: 429,
+      message: 'Resource has been exhausted (e.g. check quota).',
+      details: [
+        {
+          '@type': 'type.googleapis.com/google.rpc.ErrorInfo',
+          reason: 'INSUFFICIENT_G1_CREDITS_BALANCE',
+        },
+      ],
+    };
+    vi.spyOn(errorParser, 'parseGoogleApiError').mockReturnValue(apiError);
+    const result = classifyGoogleError(new Error());
+    expect(result).toBeInstanceOf(TerminalQuotaError);
+    expect((result as TerminalQuotaError).isInsufficientCredits).toBe(true);
+    expect((result as TerminalQuotaError).reason).toBe(
+      'INSUFFICIENT_G1_CREDITS_BALANCE',
+    );
+  });
+
   it('should prioritize daily limit over retry info', () => {
     const apiError: GoogleApiError = {
       code: 429,
diff --git a/packages/core/src/utils/googleQuotaErrors.ts b/packages/core/src/utils/googleQuotaErrors.ts
index a075b79b89..e9955493bd 100644
--- a/packages/core/src/utils/googleQuotaErrors.ts
+++ b/packages/core/src/utils/googleQuotaErrors.ts
@@ -19,17 +19,24 @@ import { getErrorStatus, ModelNotFoundError } from './httpErrors.js';
  */
 export class TerminalQuotaError extends Error {
   retryDelayMs?: number;
+  reason?: string;
 
   constructor(
     message: string,
     override readonly cause: GoogleApiError,
     retryDelaySeconds?: number,
+    reason?: string,
   ) {
     super(message);
     this.name = 'TerminalQuotaError';
     this.retryDelayMs = retryDelaySeconds
       ? retryDelaySeconds * 1000
       : undefined;
+    this.reason = reason;
+  }
+
+  get isInsufficientCredits(): boolean {
+    return this.reason === 'INSUFFICIENT_G1_CREDITS_BALANCE';
   }
 }
 
@@ -121,6 +128,7 @@ function classifyValidationRequiredError(
   }
 
   if (
+    !errorInfo.domain ||
     !CLOUDCODE_DOMAINS.includes(errorInfo.domain) ||
     errorInfo.reason !== 'VALIDATION_REQUIRED'
   ) {
@@ -293,6 +301,16 @@ export function classifyGoogleError(error: unknown): unknown {
   }
 
   if (errorInfo) {
+    // INSUFFICIENT_G1_CREDITS_BALANCE is always terminal, regardless of domain
+    if (errorInfo.reason === 'INSUFFICIENT_G1_CREDITS_BALANCE') {
+      return new TerminalQuotaError(
+        `${googleApiError.message}`,
+        googleApiError,
+        delaySeconds,
+        errorInfo.reason,
+      );
+    }
+
     // New Cloud Code API quota handling
     if (errorInfo.domain) {
       const validDomains = [
@@ -313,6 +331,7 @@ export function classifyGoogleError(error: unknown): unknown {
             `${googleApiError.message}`,
             googleApiError,
             delaySeconds,
+            errorInfo.reason,
           );
         }
       }
diff --git a/packages/sdk/src/agent.integration.test.ts b/packages/sdk/src/agent.integration.test.ts
index bd98890c52..6ae5e687f5 100644
--- a/packages/sdk/src/agent.integration.test.ts
+++ b/packages/sdk/src/agent.integration.test.ts
@@ -8,10 +8,9 @@ import { describe, it, expect, vi, beforeEach, afterEach } from 'vitest';
 import { GeminiCliAgent } from './agent.js';
 import * as path from 'node:path';
 import { fileURLToPath } from 'node:url';
-import { dirname } from 'node:path';
 
 const __filename = fileURLToPath(import.meta.url);
-const __dirname = dirname(__filename);
+const __dirname = path.dirname(__filename);
 
 // Set this to true locally when you need to update snapshots
 const RECORD_MODE = process.env['RECORD_NEW_RESPONSES'] === 'true';
diff --git a/packages/sdk/src/shell.ts b/packages/sdk/src/shell.ts
index 30b9979594..ade12c74dc 100644
--- a/packages/sdk/src/shell.ts
+++ b/packages/sdk/src/shell.ts
@@ -4,8 +4,11 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
-import type { Config as CoreConfig } from '@google/gemini-cli-core';
-import { ShellExecutionService, ShellTool } from '@google/gemini-cli-core';
+import {
+  ShellExecutionService,
+  ShellTool,
+  type Config as CoreConfig,
+} from '@google/gemini-cli-core';
 import type {
   AgentShell,
   AgentShellResult,
diff --git a/packages/sdk/src/skills.integration.test.ts b/packages/sdk/src/skills.integration.test.ts
index 48f0e0fb06..aaad9f3676 100644
--- a/packages/sdk/src/skills.integration.test.ts
+++ b/packages/sdk/src/skills.integration.test.ts
@@ -9,10 +9,9 @@ import { GeminiCliAgent } from './agent.js';
 import { skillDir } from './skills.js';
 import * as path from 'node:path';
 import { fileURLToPath } from 'node:url';
-import { dirname } from 'node:path';
 
 const __filename = fileURLToPath(import.meta.url);
-const __dirname = dirname(__filename);
+const __dirname = path.dirname(__filename);
 
 // Set this to true locally when you need to update snapshots
 const RECORD_MODE = process.env['RECORD_NEW_RESPONSES'] === 'true';
diff --git a/packages/sdk/src/tool.integration.test.ts b/packages/sdk/src/tool.integration.test.ts
index cc0a7c2454..28c01c3ca2 100644
--- a/packages/sdk/src/tool.integration.test.ts
+++ b/packages/sdk/src/tool.integration.test.ts
@@ -10,10 +10,9 @@ import * as path from 'node:path';
 import { z } from 'zod';
 import { tool, ModelVisibleError } from './tool.js';
 import { fileURLToPath } from 'node:url';
-import { dirname } from 'node:path';
 
 const __filename = fileURLToPath(import.meta.url);
-const __dirname = dirname(__filename);
+const __dirname = path.dirname(__filename);
 
 // Set this to true locally when you need to update snapshots
 const RECORD_MODE = process.env['RECORD_NEW_RESPONSES'] === 'true';
diff --git a/packages/test-utils/src/test-rig.ts b/packages/test-utils/src/test-rig.ts
index 1cd55b84f7..5026a47d7b 100644
--- a/packages/test-utils/src/test-rig.ts
+++ b/packages/test-utils/src/test-rig.ts
@@ -6,13 +6,12 @@
 
 import { expect } from 'vitest';
 import { execSync, spawn, type ChildProcess } from 'node:child_process';
-import { mkdirSync, writeFileSync, readFileSync } from 'node:fs';
+import fs, { mkdirSync, writeFileSync, readFileSync } from 'node:fs';
 import { join, dirname } from 'node:path';
 import { fileURLToPath } from 'node:url';
 import { env } from 'node:process';
 import { setTimeout as sleep } from 'node:timers/promises';
 import { DEFAULT_GEMINI_MODEL, GEMINI_DIR } from '@google/gemini-cli-core';
-import fs from 'node:fs';
 import * as pty from '@lydell/node-pty';
 import stripAnsi from 'strip-ansi';
 import * as os from 'node:os';
diff --git a/schemas/settings.schema.json b/schemas/settings.schema.json
index a25b0ad915..2186bca88e 100644
--- a/schemas/settings.schema.json
+++ b/schemas/settings.schema.json
@@ -436,6 +436,14 @@
           "type": "string",
           "enum": ["tips", "witty", "all", "off"]
         },
+        "errorVerbosity": {
+          "title": "Error Verbosity",
+          "description": "Controls whether recoverable errors are hidden (low) or fully shown (full).",
+          "markdownDescription": "Controls whether recoverable errors are hidden (low) or fully shown (full).\n\n- Category: `UI`\n- Requires restart: `no`\n- Default: `low`",
+          "default": "low",
+          "type": "string",
+          "enum": ["low", "full"]
+        },
         "customWittyPhrases": {
           "title": "Custom Witty Phrases",
           "description": "Custom witty phrases to display during loading. When provided, the CLI cycles through these instead of the defaults.",
@@ -520,6 +528,24 @@
       "markdownDescription": "Telemetry configuration.\n\n- Category: `Advanced`\n- Requires restart: `yes`",
       "$ref": "#/$defs/TelemetrySettings"
     },
+    "billing": {
+      "title": "Billing",
+      "description": "Billing and AI credits settings.",
+      "markdownDescription": "Billing and AI credits settings.\n\n- Category: `Advanced`\n- Requires restart: `no`\n- Default: `{}`",
+      "default": {},
+      "type": "object",
+      "properties": {
+        "overageStrategy": {
+          "title": "Overage Strategy",
+          "description": "How to handle quota exhaustion when AI credits are available. 'ask' prompts each time, 'always' automatically uses credits, 'never' disables credit usage.",
+          "markdownDescription": "How to handle quota exhaustion when AI credits are available. 'ask' prompts each time, 'always' automatically uses credits, 'never' disables credit usage.\n\n- Category: `Advanced`\n- Requires restart: `no`\n- Default: `ask`",
+          "default": "ask",
+          "type": "string",
+          "enum": ["ask", "always", "never"]
+        }
+      },
+      "additionalProperties": false
+    },
     "model": {
       "title": "Model",
       "description": "Settings related to the generative model.",