diff --git a/src/agents/pi-embedded-runner/compact.hooks.harness.ts b/src/agents/pi-embedded-runner/compact.hooks.harness.ts
index 36057b7ddf6..603b16ad94d 100644
--- a/src/agents/pi-embedded-runner/compact.hooks.harness.ts
+++ b/src/agents/pi-embedded-runner/compact.hooks.harness.ts
@@ -1,5 +1,6 @@
 import { vi, type Mock } from "vitest";
 import { clearAgentHarnesses } from "../harness/registry.js";
+import type { CompactionTranscriptRotation } from "./compaction-successor-transcript.js";
 
 type MockResolvedModel = {
   model: { provider: string; api: string; id: string; input: unknown[] };
@@ -98,6 +99,11 @@ export const resolveAgentTransportOverrideMock: Mock<(params?: unknown) => strin
 export const resolveSandboxContextMock = vi.fn(async () => null);
 export const maybeCompactAgentHarnessSessionMock: Mock<(params?: unknown) => Promise<unknown>> =
   vi.fn(async () => undefined);
+export const rotateTranscriptAfterCompactionMock: Mock<
+  (_params?: unknown) => Promise<CompactionTranscriptRotation>
+> = vi.fn(async () => ({
+  rotated: false,
+}));
 
 export function resetCompactSessionStateMocks(): void {
   sanitizeSessionHistoryMock.mockReset();
@@ -138,6 +144,8 @@ export function resetCompactSessionStateMocks(): void {
   resolveSandboxContextMock.mockResolvedValue(null);
   maybeCompactAgentHarnessSessionMock.mockReset();
   maybeCompactAgentHarnessSessionMock.mockResolvedValue(undefined);
+  rotateTranscriptAfterCompactionMock.mockReset();
+  rotateTranscriptAfterCompactionMock.mockResolvedValue({ rotated: false });
 }
 
 export function resetCompactHooksHarnessMocks(): void {
@@ -209,6 +217,7 @@ export async function loadCompactHooksHarness(): Promise<{
 
   vi.doMock("../../plugins/provider-runtime.js", () => ({
     prepareProviderRuntimeAuth: vi.fn(async () => ({ resolvedApiKey: undefined })),
+    resolveProviderReasoningOutputModeWithPlugin: vi.fn(() => undefined),
     resolveProviderSystemPromptContribution: vi.fn(() => undefined),
     resolveProviderTextTransforms: vi.fn(() => undefined),
     transformProviderSystemPrompt: vi.fn(
@@ -264,12 +273,17 @@ export async function loadCompactHooksHarness(): Promise<{
           session.messages.splice(1);
           return await sessionCompactImpl();
         }),
+        setActiveToolsByName: vi.fn(),
         abortCompaction: sessionAbortCompactionMock,
         dispose: vi.fn(),
       };
       return { session };
     }),
-    DefaultResourceLoader: function DefaultResourceLoader() {},
+    DefaultResourceLoader: function DefaultResourceLoader() {
+      return {
+        reload: vi.fn(async () => undefined),
+      };
+    },
     SessionManager: {
       open: vi.fn(() => ({})),
     },
@@ -287,6 +301,7 @@ export async function loadCompactHooksHarness(): Promise<{
   }));
 
   vi.doMock("../pi-settings.js", () => ({
+    applyPiCompactionSettingsFromConfig: vi.fn(),
     ensurePiCompactionReserveTokens: vi.fn(),
     resolveCompactionReserveTokensFloor: vi.fn(() => 0),
   }));
@@ -442,6 +457,16 @@ export async function loadCompactHooksHarness(): Promise<{
     resolveCompactionTimeoutMs: vi.fn(() => 30_000),
   }));
 
+  vi.doMock("./compaction-successor-transcript.js", async () => {
+    const actual = await vi.importActual<typeof import("./compaction-successor-transcript.js")>(
+      "./compaction-successor-transcript.js",
+    );
+    return {
+      ...actual,
+      rotateTranscriptAfterCompaction: rotateTranscriptAfterCompactionMock,
+    };
+  });
+
   vi.doMock("./wait-for-idle-before-flush.js", () => ({
     flushPendingToolResultsAfterIdle: vi.fn(async () => {}),
   }));
@@ -476,6 +501,8 @@ export async function loadCompactHooksHarness(): Promise<{
 
   vi.doMock("../agent-scope.js", () => ({
     listAgentEntries: vi.fn(() => []),
+    resolveAgentConfig: vi.fn(() => undefined),
+    resolveDefaultAgentId: vi.fn(() => "main"),
     resolveSessionAgentId: resolveSessionAgentIdMock,
     resolveSessionAgentIds: vi.fn(() => ({ defaultAgentId: "main", sessionAgentId: "main" })),
   }));
diff --git a/src/agents/pi-embedded-runner/compact.hooks.test.ts b/src/agents/pi-embedded-runner/compact.hooks.test.ts
index 4795b8c5ab8..5be6bc0d9a3 100644
--- a/src/agents/pi-embedded-runner/compact.hooks.test.ts
+++ b/src/agents/pi-embedded-runner/compact.hooks.test.ts
@@ -17,6 +17,7 @@ import {
   resolveModelMock,
   resolveSandboxContextMock,
   resolveSessionAgentIdMock,
+  rotateTranscriptAfterCompactionMock,
   resetCompactHooksHarnessMocks,
   resetCompactSessionStateMocks,
   sessionAbortCompactionMock,
@@ -411,6 +412,49 @@ describe("compactEmbeddedPiSessionDirect hooks", () => {
     }
   });
 
+  it("emits post-compaction side effects once for a rotated successor transcript", async () => {
+    const listener = vi.fn();
+    const cleanup = onSessionTranscriptUpdate(listener);
+    const sync = vi.fn(async () => {});
+    getMemorySearchManagerMock.mockResolvedValue({ manager: { sync } });
+    rotateTranscriptAfterCompactionMock.mockResolvedValueOnce({
+      rotated: true,
+      sessionId: "rotated-session",
+      sessionFile: "/tmp/rotated-session.jsonl",
+      leafId: "rotated-leaf",
+    });
+
+    try {
+      const result = await compactEmbeddedPiSessionDirect({
+        sessionId: "session-1",
+        sessionKey: TEST_SESSION_KEY,
+        sessionFile: "/tmp/session.jsonl",
+        workspaceDir: "/tmp/workspace",
+        config: {
+          agents: {
+            defaults: {
+              compaction: {
+                truncateAfterCompaction: true,
+                postIndexSync: "await",
+              },
+            },
+          },
+        } as never,
+      });
+
+      expect(result.ok).toBe(true);
+      expect(listener).toHaveBeenCalledTimes(1);
+      expect(listener).toHaveBeenCalledWith({ sessionFile: "/tmp/rotated-session.jsonl" });
+      expect(sync).toHaveBeenCalledTimes(1);
+      expect(sync).toHaveBeenCalledWith({
+        reason: "post-compaction",
+        sessionFiles: ["/tmp/rotated-session.jsonl"],
+      });
+    } finally {
+      cleanup();
+    }
+  });
+
   it("preserves tokensAfter when full-session context exceeds result.tokensBefore", async () => {
     estimateTokensMock.mockImplementation((message: unknown) => {
       const role = (message as { role?: string }).role;
@@ -1008,6 +1052,63 @@ describe("compactEmbeddedPiSession hooks (ownsCompaction engine)", () => {
     );
   });
 
+  it("rotates in the wrapper when a delegated result echoes the current transcript", async () => {
+    const maintain = vi.fn(async (_params?: unknown) => ({
+      changed: false,
+      bytesFreed: 0,
+      rewrittenEntries: 0,
+    }));
+    resolveContextEngineMock.mockResolvedValue({
+      info: { ownsCompaction: false },
+      compact: contextEngineCompactMock,
+      maintain,
+    } as never);
+    contextEngineCompactMock.mockResolvedValue({
+      ok: true,
+      compacted: true,
+      reason: undefined,
+      result: {
+        summary: "engine-summary",
+        firstKeptEntryId: "entry-1",
+        tokensBefore: 120,
+        tokensAfter: 50,
+        sessionId: TEST_SESSION_ID,
+        sessionFile: TEST_SESSION_FILE,
+      },
+    } as never);
+    rotateTranscriptAfterCompactionMock.mockResolvedValueOnce({
+      rotated: true,
+      sessionId: "wrapper-rotated-session",
+      sessionFile: "/tmp/wrapper-rotated-session.jsonl",
+      leafId: "wrapper-rotated-leaf",
+    });
+
+    const result = await compactEmbeddedPiSession(
+      wrappedCompactionArgs({
+        config: {
+          agents: {
+            defaults: {
+              compaction: {
+                truncateAfterCompaction: true,
+              },
+            },
+          },
+        },
+      }),
+    );
+
+    expect(result.ok).toBe(true);
+    expect(rotateTranscriptAfterCompactionMock).toHaveBeenCalledTimes(1);
+    expect(result.result?.sessionId).toBe("wrapper-rotated-session");
+    expect(result.result?.sessionFile).toBe("/tmp/wrapper-rotated-session.jsonl");
+    expect(maintain).toHaveBeenCalledWith(
+      expect.objectContaining({
+        sessionId: "wrapper-rotated-session",
+        sessionFile: "/tmp/wrapper-rotated-session.jsonl",
+      }),
+    );
+  });
+
   it("catches and logs hook exceptions without aborting compaction", async () => {
     hookRunner.hasHooks.mockReturnValue(true);
     hookRunner.runBeforeCompaction.mockRejectedValue(new Error("hook boom"));
diff --git a/src/agents/pi-embedded-runner/compact.queued.ts b/src/agents/pi-embedded-runner/compact.queued.ts
index 1efc1984d7c..422d619222e 100644
--- a/src/agents/pi-embedded-runner/compact.queued.ts
+++ b/src/agents/pi-embedded-runner/compact.queued.ts
@@ -164,7 +164,9 @@ export async function compactEmbeddedPiSession(
         });
         const delegatedSessionId = result.result?.sessionId;
         const delegatedSessionFile = result.result?.sessionFile;
-        const delegatedRotatedTranscript = Boolean(delegatedSessionId || delegatedSessionFile);
+        const delegatedRotatedTranscript =
+          (typeof delegatedSessionId === "string" && delegatedSessionId !== params.sessionId) ||
+          (typeof delegatedSessionFile === "string" && delegatedSessionFile !== params.sessionFile);
         let postCompactionSessionId = delegatedSessionId ?? params.sessionId;
         let postCompactionSessionFile = delegatedSessionFile ?? params.sessionFile;
         let postCompactionLeafId: string | undefined;
diff --git a/src/agents/pi-embedded-runner/compact.ts b/src/agents/pi-embedded-runner/compact.ts
index 085b3fe9b81..8306f37b3c9 100644
--- a/src/agents/pi-embedded-runner/compact.ts
+++ b/src/agents/pi-embedded-runner/compact.ts
@@ -1073,11 +1073,6 @@ export async function compactEmbeddedPiSessionDirect(
               },
             },
           );
-          await runPostCompactionSideEffects({
-            config: params.config,
-            sessionKey: params.sessionKey,
-            sessionFile: params.sessionFile,
-          });
           let effectiveFirstKeptEntryId = result.firstKeptEntryId;
           let postCompactionLeafId =
             typeof sessionManager.getLeafId === "function"
@@ -1135,12 +1130,12 @@ export async function compactEmbeddedPiSessionDirect(
               `[compaction] rotated active transcript after compaction ` +
                 `(sessionKey=${params.sessionKey ?? params.sessionId})`,
             );
-            await runPostCompactionSideEffects({
-              config: params.config,
-              sessionKey: params.sessionKey,
-              sessionFile: activeSessionFile,
-            });
           }
+          await runPostCompactionSideEffects({
+            config: params.config,
+            sessionKey: params.sessionKey,
+            sessionFile: activeSessionFile,
+          });
           if (params.config && params.sessionKey && checkpointSnapshot) {
             try {
               const storedCheckpoint = await persistSessionCompactionCheckpoint({
diff --git a/src/agents/pi-embedded-runner/compaction-successor-transcript.test.ts b/src/agents/pi-embedded-runner/compaction-successor-transcript.test.ts
index c0f5f7e1f9a..d7fb656a642 100644
--- a/src/agents/pi-embedded-runner/compaction-successor-transcript.test.ts
+++ b/src/agents/pi-embedded-runner/compaction-successor-transcript.test.ts
@@ -163,6 +163,55 @@ describe("rotateTranscriptAfterCompaction", () => {
       firstKeptEntryId: compactionId,
     });
   });
+
+  it("preserves unsummarized sibling branches and branch summaries", async () => {
+    const dir = await createTmpDir();
+    const manager = SessionManager.create(dir, dir);
+
+    manager.appendMessage({ role: "user", content: "hello", timestamp: 1 });
+    const branchFromId = manager.appendMessage(makeAssistant("hi there", 2));
+
+    const branchSummaryId = manager.branchWithSummary(
+      branchFromId,
+      "Summary of the abandoned branch.",
+    );
+    const siblingMsgId = manager.appendMessage({
+      role: "user",
+      content: "do task B instead",
+      timestamp: 3,
+    });
+    manager.appendMessage(makeAssistant("done B", 4));
+
+    manager.branch(branchFromId);
+    manager.appendMessage({ role: "user", content: "do task A", timestamp: 5 });
+    const firstKeptId = manager.appendMessage(makeAssistant("done A", 6));
+    manager.appendCompaction("Summary of main branch.", firstKeptId, 5000);
+    manager.appendMessage({ role: "user", content: "next", timestamp: 7 });
+
+    const sessionFile = manager.getSessionFile()!;
+    const result = await rotateTranscriptAfterCompaction({
+      sessionManager: manager,
+      sessionFile,
+      now: () => new Date("2026-04-27T12:45:00.000Z"),
+    });
+
+    expect(result.rotated).toBe(true);
+    const successor = SessionManager.open(result.sessionFile!);
+    const allEntries = successor.getEntries();
+    expect(allEntries.find((entry) => entry.id === branchSummaryId)).toMatchObject({
+      type: "branch_summary",
+      summary: "Summary of the abandoned branch.",
+    });
+    expect(allEntries.find((entry) => entry.id === siblingMsgId)).toMatchObject({
+      type: "message",
+      message: expect.objectContaining({ content: "do task B instead" }),
+    });
+
+    const activeContextText = JSON.stringify(successor.buildSessionContext().messages);
+    expect(activeContextText).toContain("Summary of main branch.");
+    expect(activeContextText).toContain("next");
+    expect(activeContextText).not.toContain("do task B instead");
+  });
 });
 
 describe("shouldRotateCompactionTranscript", () => {
diff --git a/src/agents/pi-embedded-runner/compaction-successor-transcript.ts b/src/agents/pi-embedded-runner/compaction-successor-transcript.ts
index ce701c0b16a..9deee8f14cc 100644
--- a/src/agents/pi-embedded-runner/compaction-successor-transcript.ts
+++ b/src/agents/pi-embedded-runner/compaction-successor-transcript.ts
@@ -12,7 +12,7 @@ import type { OpenClawConfig } from "../../config/types.openclaw.js";
 
 type ReadonlySessionManagerForRotation = Pick<
   SessionManager,
-  "buildSessionContext" | "getBranch" | "getCwd" | "getHeader"
+  "buildSessionContext" | "getBranch" | "getCwd" | "getEntries" | "getHeader"
 >;
 
 export type CompactionTranscriptRotation = {
@@ -54,6 +54,7 @@ export async function rotateTranscriptAfterCompaction(params: {
     timestamp,
   });
   const successorEntries = buildSuccessorEntries({
+    allEntries: params.sessionManager.getEntries(),
     branch,
     latestCompactionIndex,
   });
@@ -97,69 +98,66 @@ function findLatestCompactionIndex(entries: SessionEntry[]): number {
 }
 
 function buildSuccessorEntries(params: {
+  allEntries: SessionEntry[];
   branch: SessionEntry[];
   latestCompactionIndex: number;
 }): SessionEntry[] {
-  const { branch, latestCompactionIndex } = params;
+  const { allEntries, branch, latestCompactionIndex } = params;
   const compaction = branch[latestCompactionIndex] as CompactionEntry;
-  const firstKeptIndex = branch.findIndex((entry) => entry.id === compaction.firstKeptEntryId);
-  const keptBeforeCompaction =
-    firstKeptIndex >= 0 && firstKeptIndex < latestCompactionIndex
-      ? branch.slice(firstKeptIndex, latestCompactionIndex)
-      : [];
-  const afterCompaction = branch.slice(latestCompactionIndex + 1);
-  const statePrefix = collectLatestStatePrefix(branch.slice(0, latestCompactionIndex));
-  const successorEntries: SessionEntry[] = [];
-  const seenIds = new Set<string>();
-  let parentId: string | null = null;
 
-  const append = (entry: SessionEntry) => {
-    if (seenIds.has(entry.id)) {
-      return;
-    }
-    const nextEntry = { ...entry, parentId } as SessionEntry;
-    successorEntries.push(nextEntry);
-    seenIds.add(nextEntry.id);
-    parentId = nextEntry.id;
-  };
-
-  for (const entry of statePrefix) {
-    append(entry);
-  }
-  append(compaction);
-  for (const entry of [...keptBeforeCompaction, ...afterCompaction]) {
-    if (entry.type === "compaction" || entry.type === "label") {
+  const summarizedBranchIds = new Set<string>();
+  for (let index = 0; index < latestCompactionIndex; index += 1) {
+    const entry = branch[index];
+    if (!entry) {
       continue;
     }
-    append(entry);
+    if (compaction.firstKeptEntryId && entry.id === compaction.firstKeptEntryId) {
+      break;
+    }
+    summarizedBranchIds.add(entry.id);
   }
-  const retainedIds = new Set(successorEntries.map((entry) => entry.id));
-  for (const entry of branch) {
-    if (entry.type !== "label" || !retainedIds.has(entry.targetId)) {
+
+  const removedIds = new Set<string>();
+  for (const entry of allEntries) {
+    if (summarizedBranchIds.has(entry.id) && entry.type === "message") {
+      removedIds.add(entry.id);
+    }
+  }
+  for (const entry of allEntries) {
+    if (entry.type === "label" && removedIds.has(entry.targetId)) {
+      removedIds.add(entry.id);
+    }
+  }
+
+  const entryById = new Map(allEntries.map((entry) => [entry.id, entry]));
+  const activeBranchIds = new Set(branch.map((entry) => entry.id));
+  const keptEntries: SessionEntry[] = [];
+  for (const entry of allEntries) {
+    if (removedIds.has(entry.id)) {
       continue;
     }
-    append(entry);
-  }
-  return successorEntries;
-}
 
-function collectLatestStatePrefix(entries: SessionEntry[]): SessionEntry[] {
-  const customEntries: Array<{ index: number; entry: SessionEntry }> = [];
-  const latestByType = new Map<string, { index: number; entry: SessionEntry }>();
-  for (const [index, entry] of entries.entries()) {
-    if (entry.type === "custom") {
-      customEntries.push({ index, entry });
-    } else if (
-      entry.type === "thinking_level_change" ||
-      entry.type === "model_change" ||
-      entry.type === "session_info"
-    ) {
-      latestByType.set(entry.type, { index, entry });
+    let parentId = entry.parentId;
+    while (parentId !== null && removedIds.has(parentId)) {
+      parentId = entryById.get(parentId)?.parentId ?? null;
+    }
+
+    keptEntries.push(
+      parentId === entry.parentId ? entry : ({ ...entry, parentId } as SessionEntry),
+    );
+  }
+
+  const inactiveEntries: SessionEntry[] = [];
+  const activeEntries: SessionEntry[] = [];
+  for (const entry of keptEntries) {
+    if (activeBranchIds.has(entry.id)) {
+      activeEntries.push(entry);
+    } else {
+      inactiveEntries.push(entry);
     }
   }
-  return [...customEntries, ...latestByType.values()]
-    .toSorted((left, right) => left.index - right.index)
-    .map(({ entry }) => entry);
+
+  return [...inactiveEntries, ...activeEntries];
 }
 
 function buildSuccessorHeader(params: {
diff --git a/src/auto-reply/reply/reply-state.test.ts b/src/auto-reply/reply/reply-state.test.ts
index 6485965b630..3101742b053 100644
--- a/src/auto-reply/reply/reply-state.test.ts
+++ b/src/auto-reply/reply/reply-state.test.ts
@@ -556,6 +556,31 @@ describe("incrementCompactionCount", () => {
     expect(stored[sessionKey].compactionCount).toBe(1);
   });
 
+  it("updates sessionFile when rotation keeps the same sessionId", async () => {
+    const entry = {
+      sessionId: "same-id",
+      sessionFile: "same-id.jsonl",
+      updatedAt: Date.now(),
+      compactionCount: 0,
+    } as SessionEntry;
+    const { storePath, sessionKey, sessionStore } = await createCompactionSessionFixture(entry);
+    const rotatedSessionFile = path.join(path.dirname(storePath), "rotated-same-id.jsonl");
+
+    await incrementCompactionCount({
+      sessionEntry: entry,
+      sessionStore,
+      sessionKey,
+      storePath,
+      newSessionId: "same-id",
+      newSessionFile: rotatedSessionFile,
+    });
+
+    const stored = JSON.parse(await fs.readFile(storePath, "utf-8"));
+    expect(stored[sessionKey].sessionId).toBe("same-id");
+    expect(stored[sessionKey].sessionFile).toBe(rotatedSessionFile);
+    expect(stored[sessionKey].compactionCount).toBe(1);
+  });
+
   it("does not update totalTokens when tokensAfter is not provided", async () => {
     const entry = {
       sessionId: "s1",
diff --git a/src/auto-reply/reply/session-updates.ts b/src/auto-reply/reply/session-updates.ts
index 47121243b79..df90d6bb02f 100644
--- a/src/auto-reply/reply/session-updates.ts
+++ b/src/auto-reply/reply/session-updates.ts
@@ -248,16 +248,23 @@ export async function incrementCompactionCount(params: {
     compactionCount: nextCount,
     updatedAt: now,
   };
-  if (newSessionId && newSessionId !== entry.sessionId) {
+  const explicitNewSessionFile = normalizeOptionalString(newSessionFile);
+  const sessionIdChanged = Boolean(newSessionId && newSessionId !== entry.sessionId);
+  const sessionFileChanged = Boolean(
+    explicitNewSessionFile && explicitNewSessionFile !== entry.sessionFile,
+  );
+  if (sessionIdChanged && newSessionId) {
     updates.sessionId = newSessionId;
     updates.sessionFile =
-      newSessionFile ??
+      explicitNewSessionFile ??
       resolveCompactionSessionFile({
         entry,
         sessionKey,
         storePath,
         newSessionId,
       });
+  } else if (sessionFileChanged && explicitNewSessionFile) {
+    updates.sessionFile = explicitNewSessionFile;
   }
   // If tokensAfter is provided, update the cached token counts to reflect post-compaction state
   if (tokensAfter != null && tokensAfter > 0) {
@@ -281,7 +288,7 @@ export async function incrementCompactionCount(params: {
       };
     });
   }
-  if (newSessionId && newSessionId !== entry.sessionId && cfg) {
+  if ((sessionIdChanged || sessionFileChanged) && cfg) {
     emitCompactionSessionLifecycleHooks({
       cfg,
       sessionKey,