fix(ai): support streams without finish reasons

Co-authored-by: Kit Langton <kit.langton@gmail.com>

packages/ai/src/protocols/openai-chat.ts

@@ -241,6 +241,8 @@ export interface ParserState {
   readonly reasoningEmitted: boolean
   readonly latestToolIndex?: number
   readonly nextToolIndex: number
+  readonly outputStarted: boolean
+  readonly requireFinishReason: boolean
 }
 
 // =============================================================================
@@ -707,9 +709,7 @@ const step = (state: ParserState, event: OpenAIChatEvent) =>
       Boolean(delta?.content) ||
       reasoning !== undefined ||
       (Array.isArray(delta?.reasoning_details) && delta.reasoning_details.length > 0) ||
-      toolDeltas.some(
-        (tool) => Boolean(tool.id) || Boolean(tool.function?.name) || Boolean(tool.function?.arguments),
-      )
+      toolDeltas.some((tool) => Boolean(tool.id) || Boolean(tool.function?.name) || Boolean(tool.function?.arguments))
     if (state.finishReason !== undefined) {
       if (hasLateContent)
         return yield* ProviderShared.eventError(ADAPTER, "OpenAI Chat received content after the finish reason")
@@ -749,8 +749,7 @@ const step = (state: ParserState, event: OpenAIChatEvent) =>
       const fallback = toolDeltas.length > 1 ? position : (latestToolIndex ?? position)
       const fallbackTool = tools[fallback] ?? pendingTools[fallback]
       const index =
-        tool.index ?? matched ??
-        (tool.id && fallbackTool?.id && fallbackTool.id !== tool.id ? nextToolIndex : fallback)
+        tool.index ?? matched ?? (tool.id && fallbackTool?.id && fallbackTool.id !== tool.id ? nextToolIndex : fallback)
       const current = tools[index]
       const pending = pendingTools[index]
       const id = current?.id ?? pending?.id ?? (tool.id || undefined)
@@ -806,6 +805,8 @@ const step = (state: ParserState, event: OpenAIChatEvent) =>
         reasoningEmitted,
         latestToolIndex,
         nextToolIndex,
+        outputStarted: state.outputStarted || hasLateContent,
+        requireFinishReason: state.requireFinishReason,
       },
       events,
     ] as const
@@ -836,6 +837,23 @@ const finishEvents = (state: ParserState): ReadonlyArray<LLMEvent> => {
   return events
 }
 
+const onHalt = (state: ParserState) =>
+  Effect.gen(function* () {
+    if (state.finishReason !== undefined || state.requireFinishReason) return finishEvents(state)
+    if (!state.outputStarted) return []
+    if (Object.keys(state.pendingTools).length > 0)
+      return yield* ProviderShared.eventError(ADAPTER, "OpenAI Chat tool call delta is missing id or name")
+    // Chat has no per-call stop event, so an accepted EOF must finalize every
+    // accumulated tool input before publishing the synthetic terminal reason.
+    const finished = yield* ToolStream.finishAll(ADAPTER, state.tools)
+    return finishEvents({
+      ...state,
+      tools: finished.tools,
+      toolCallEvents: finished.events,
+      finishReason: { normalized: "unknown" },
+    })
+  })
+
 // =============================================================================
 // Protocol And OpenAI Route
 // =============================================================================
@@ -863,9 +881,11 @@ export const protocol = Protocol.make({
       reasoningDetailsObserved: false,
       reasoningEmitted: false,
       nextToolIndex: 0,
+      outputStarted: false,
+      requireFinishReason: request.model.compatibility?.requireFinishReason ?? true,
     }),
     step,
-    onHalt: finishEvents,
+    onHalt,
   },
 })
 

packages/ai/src/route/client.ts

@@ -7,7 +7,7 @@ import { Framing } from "./framing"
 import { HttpTransport } from "./transport"
 import type { HttpMiddleware, Transport, TransportRuntime } from "./transport"
 import { WebSocketExecutor } from "./transport"
-import type { Protocol } from "./protocol"
+import type { Protocol, ProtocolStream } from "./protocol"
 import { applyCachePolicy } from "../cache-policy"
 import * as ProviderShared from "../protocols/shared"
 import type { ProtocolID, ProviderOptions } from "../schema"
@@ -243,28 +243,56 @@ const incompleteStreamError = (route: string) =>
     }),
   })
 
-const requireTerminalEvent = (route: string) => (events: Stream.Stream<LLMEvent, AIError>) =>
+const ensureTerminalEvent = (route: string, required: boolean) => (events: Stream.Stream<LLMEvent, AIError>) =>
   Stream.suspend(() => {
     let terminal = false
+    let output = false
+    const fallback = Stream.suspend(() => {
+      if (terminal) return Stream.empty
+      if (required || !output) return Stream.fail(incompleteStreamError(route))
+      // The compatibility override trusts a clean stream end, but it cannot
+      // recover the provider's omitted reason.
+      const reason = { normalized: "unknown" as const }
+      return Stream.make(LLMEvent.stepFinish({ index: 0, reason }), LLMEvent.finish({ reason }))
+    })
     return events.pipe(
       Stream.mapEffect((event) => {
         if (terminal)
           return Effect.fail(
             ProviderShared.eventError(route, `Provider emitted ${event.type} after the terminal event`),
           )
+        output = true
         if (LLMEvent.is.finish(event) || LLMEvent.is.providerError(event)) terminal = true
         return Effect.succeed(event)
       }),
-      Stream.onEnd(
-        Effect.suspend(() =>
-          terminal
-            ? Effect.void
-            : Effect.fail(incompleteStreamError(route)),
-        ),
-      ),
+      Stream.concat(fallback),
     )
   })
 
+type ProtocolEvent<Event> = { readonly type: "event"; readonly event: Event } | { readonly type: "halt" }
+
+const parseProtocolEvents = <Event, State>(
+  events: Stream.Stream<Event, AIError>,
+  request: LLMRequest,
+  protocol: { readonly stream: ProtocolStream<unknown, Event, State> },
+) =>
+  events.pipe(
+    Stream.map((event): ProtocolEvent<Event> => ({ type: "event", event })),
+    // A normal halt becomes an in-band parser input so finalization may fail.
+    Stream.concat(Stream.succeed({ type: "halt" } as const)),
+    Stream.mapAccumEffect(
+      () => protocol.stream.initial(request),
+      (state, event) => {
+        if (event.type === "event") return protocol.stream.step(state, event.event)
+        if (!protocol.stream.onHalt) return Effect.succeed([state, []] as const)
+        const events = protocol.stream.onHalt(state)
+        return Effect.isEffect(events)
+          ? events.pipe(Effect.map((events) => [state, events] as const))
+          : Effect.succeed([state, events] as const)
+      },
+    ),
+  )
+
 function makeFromTransport<Body, Prepared, Frame, Event, State>(
   input: MakeTransportInput<Body, Prepared, Frame, Event, State>,
 ): Route<Body, Prepared> {
@@ -329,14 +357,9 @@ function makeFromTransport<Body, Prepared, Frame, Event, State>(
             Stream.mapEffect(decodeEvent(route)),
             protocol.stream.terminal ? Stream.takeUntil(protocol.stream.terminal) : (stream) => stream,
           )
-        return events.pipe(
-          Stream.mapAccumEffect(
-            () => protocol.stream.initial(request),
-            protocol.stream.step,
-            protocol.stream.onHalt ? { onHalt: protocol.stream.onHalt } : undefined,
-          ),
+        return parseProtocolEvents(events, request, protocol).pipe(
           Stream.catchCause((cause) => Stream.fail(streamError(route, `Failed to read ${route} stream`, cause))),
-          requireTerminalEvent(route),
+          ensureTerminalEvent(route, request.model.compatibility?.requireFinishReason ?? true),
         )
       },
     } satisfies Route<Body, Prepared>

packages/ai/src/route/protocol.ts

@@ -59,8 +59,8 @@ export interface ProtocolStream<Frame, Event, State> {
   readonly step: (state: State, event: Event) => Effect.Effect<readonly [State, ReadonlyArray<LLMEvent>], AIError>
   /** Optional request-completion signal for transports that do not end naturally. */
   readonly terminal?: (event: Event) => boolean
-  /** Optional flush emitted when the framed stream ends. */
-  readonly onHalt?: (state: State) => ReadonlyArray<LLMEvent>
+  /** Optional flush emitted when the framed stream ends successfully. */
+  readonly onHalt?: (state: State) => ReadonlyArray<LLMEvent> | Effect.Effect<ReadonlyArray<LLMEvent>, AIError>
 }
 
 /**

packages/ai/test/adapter.test.ts

@@ -138,6 +138,29 @@ describe("llm route", () => {
     }),
   )
 
+  unterminated.effect("synthesizes an unknown finish when a terminal event is not required", () =>
+    Effect.gen(function* () {
+      const response = yield* (yield* LLMClient.Service).generate(
+        LLMRequest.update(request, {
+          model: updateModel(request.model, { compatibility: { requireFinishReason: false } }),
+        }),
+      )
+
+      expect(response.text).toBe("partial")
+      expect(response.finishReason).toEqual({ normalized: "unknown" })
+      expect(response.events.slice(-2)).toEqual([
+        {
+          type: "step-finish",
+          index: 0,
+          reason: { normalized: "unknown" },
+          usage: undefined,
+          providerMetadata: undefined,
+        },
+        { type: "finish", reason: { normalized: "unknown" }, usage: undefined },
+      ])
+    }),
+  )
+
   it.effect("selects routes by model route value", () =>
     Effect.gen(function* () {
       const prepared = yield* compileRequest(

packages/ai/test/provider/openai-chat.test.ts

@@ -40,6 +40,10 @@ const request = LLM.request({
   generation: { maxTokens: 20, temperature: 0 },
 })
 
+const optionalFinishRequest = LLMRequest.update(request, {
+  model: LanguageModel.update(model, { compatibility: { requireFinishReason: false } }),
+})
+
 describe("OpenAI Chat route", () => {
   it.effect("prepares OpenAI Chat payload", () =>
     Effect.gen(function* () {
@@ -596,6 +600,20 @@ describe("OpenAI Chat route", () => {
     }),
   )
 
+  it.effect("accepts text and usage without a finish reason when configured", () =>
+    Effect.gen(function* () {
+      const body = sseEvents(
+        deltaChunk({ role: "assistant", content: "Hello" }),
+        usageChunk({ prompt_tokens: 5, completion_tokens: 1, total_tokens: 6 }),
+      )
+      const response = yield* LLMClient.generate(optionalFinishRequest).pipe(Effect.provide(fixedResponse(body)))
+
+      expect(response.text).toBe("Hello")
+      expect(response.finishReason).toEqual({ normalized: "unknown" })
+      expect(response.usage).toMatchObject({ inputTokens: 5, outputTokens: 1, totalTokens: 6 })
+    }),
+  )
+
   it.effect("parses and replays OpenAI-compatible reasoning fields", () =>
     Effect.gen(function* () {
       const fields = ["reasoning_content", "reasoning", "reasoning_text"] as const
@@ -1145,21 +1163,89 @@ describe("OpenAI Chat route", () => {
     }),
   )
 
-  it.effect("fails on malformed stream events", () =>
+  it.effect("finalizes a streamed tool call without a finish reason when configured", () =>
+    Effect.gen(function* () {
+      const body = sseEvents(
+        deltaChunk({
+          role: "assistant",
+          tool_calls: [{ index: 0, id: "call_1", function: { name: "lookup", arguments: '{"query"' } }],
+        }),
+        deltaChunk({ tool_calls: [{ index: 0, function: { arguments: ':"weather"}' } }] }),
+      )
+      const response = yield* LLMClient.generate(
+        LLMRequest.update(optionalFinishRequest, {
+          tools: [ToolDefinition.make({ name: "lookup", description: "Lookup data", inputSchema: { type: "object" } })],
+        }),
+      ).pipe(Effect.provide(fixedResponse(body)))
+
+      expect(response.toolCalls).toMatchObject([{ id: "call_1", name: "lookup", input: { query: "weather" } }])
+      expect(response.finishReason).toEqual({ normalized: "unknown" })
+    }),
+  )
+
+  it.effect("settles malformed tool input without a finish reason when configured", () =>
+    Effect.gen(function* () {
+      const body = sseEvents(
+        deltaChunk({
+          role: "assistant",
+          tool_calls: [{ index: 0, id: "call_1", function: { name: "lookup", arguments: '{"query"' } }],
+        }),
+      )
+      const response = yield* LLMClient.generate(
+        LLMRequest.update(optionalFinishRequest, {
+          tools: [ToolDefinition.make({ name: "lookup", description: "Lookup data", inputSchema: { type: "object" } })],
+        }),
+      ).pipe(Effect.provide(fixedResponse(body)))
+
+      expect(response.events.filter(LLMEvent.is.toolInputError)).toMatchObject([
+        { id: "call_1", name: "lookup", raw: '{"query"' },
+      ])
+      expect(response.toolCalls).toEqual([])
+      expect(response.finishReason).toEqual({ normalized: "unknown" })
+    }),
+  )
+
+  it.effect("rejects incomplete tool identity without a finish reason when configured", () =>
+    Effect.gen(function* () {
+      const body = sseEvents(deltaChunk({ tool_calls: [{ index: 0, id: "call_1", function: { arguments: "{}" } }] }))
+      const error = yield* LLMClient.generate(optionalFinishRequest).pipe(
+        Effect.provide(fixedResponse(body)),
+        Effect.flip,
+      )
+
+      expect(error.message).toContain("OpenAI Chat tool call delta is missing id or name")
+    }),
+  )
+
+  it.effect("rejects an empty stream when a finish reason is not required", () =>
+    Effect.gen(function* () {
+      const error = yield* LLMClient.generate(optionalFinishRequest).pipe(
+        Effect.provide(fixedResponse(sseEvents())),
+        Effect.flip,
+      )
+
+      expect(error.reason).toMatchObject({ _tag: "InvalidProviderOutput", classification: "incomplete-stream" })
+    }),
+  )
+
+  it.effect("fails on malformed stream events when a finish reason is not required", () =>
     Effect.gen(function* () {
       const body = sseEvents(deltaChunk({ content: 123 }))
-      const error = yield* LLMClient.generate(request).pipe(Effect.provide(fixedResponse(body)), Effect.flip)
+      const error = yield* LLMClient.generate(optionalFinishRequest).pipe(
+        Effect.provide(fixedResponse(body)),
+        Effect.flip,
+      )
 
       expect(error.message).toContain("Invalid openai/openai-chat stream event")
     }),
   )
 
-  it.effect("surfaces transport errors that occur mid-stream", () =>
+  it.effect("surfaces transport errors when a finish reason is not required", () =>
     Effect.gen(function* () {
       const layer = truncatedStream([
         `data: ${JSON.stringify(deltaChunk({ role: "assistant", content: "Hello" }))}\n\n`,
       ])
-      const error = yield* LLMClient.generate(request).pipe(Effect.provide(layer), Effect.flip)
+      const error = yield* LLMClient.generate(optionalFinishRequest).pipe(Effect.provide(layer), Effect.flip)
 
       expect(error.message).toContain("Failed to read openai/openai-chat stream")
     }),

packages/core/src/config/plugin/agent.ts

@@ -161,11 +161,14 @@ function isPathAction(action: string): action is PathAction {
 }
 
 function expandHome(resource: string, home: string) {
-  if (resource.startsWith("~/")) return home + resource.slice(1)
   if (resource === "~") return home
   if (resource === "$HOME") return home
-  if (resource.startsWith("$HOME/")) return home + resource.slice(5)
-  if (resource.startsWith("$HOME\\")) return home + resource.slice(5)
+  const relative = resource.startsWith("~/")
+    ? resource.slice(2)
+    : resource.startsWith("$HOME/") || resource.startsWith("$HOME\\")
+      ? resource.slice(6)
+      : undefined
+  if (relative !== undefined) return (path.posix.isAbsolute(home) ? path.posix : path.win32).join(home, relative)
   return resource
 }
 

packages/core/src/skill.ts

@@ -2,7 +2,7 @@ export * as Skill from "./skill"
 
 import { makeLocationNode } from "@opencode-ai/util/effect/app-node"
 import path from "path"
-import { Context, Effect, Layer, Schema, Scope, Stream, Types } from "effect"
+import { Context, Effect, Layer, Schema, Stream, Types } from "effect"
 import { FileSystem } from "@opencode-ai/schema/filesystem"
 import { Skill } from "@opencode-ai/schema/skill"
 import { Agent } from "./agent"
@@ -13,7 +13,6 @@ import { Permission } from "./permission"
 import { AbsolutePath } from "./schema"
 import { SkillDiscovery } from "./skill/discovery"
 import { State } from "./state"
-import { Watcher } from "./filesystem/watcher"
 
 export const DirectorySource = Skill.DirectorySource
 export type DirectorySource = Skill.DirectorySource
@@ -82,51 +81,6 @@ const layer = Layer.effect(
     const discovery = yield* SkillDiscovery.Service
     const fs = yield* FSUtil.Service
     const bus = yield* Bus.Service
-    const watcher = yield* Watcher.Service
-    const scope = yield* Scope.Scope
-    const cache = new Map<string, { skills: Info[]; paths: readonly string[] }>()
-    const watched = new Set<string>()
-
-    const invalidate = Effect.fn("Skill.invalidateFromWatcher")(function* (file: string) {
-      const invalidated = Array.from(cache.entries()).filter(([, loaded]) =>
-        loaded.paths.some((item) => FSUtil.overlaps(item, file)),
-      )
-      if (invalidated.length === 0) return
-      for (const [key] of invalidated) cache.delete(key)
-      yield* Effect.logInfo("skill cache invalidated", {
-        file,
-        sources: invalidated.map(([key]) => key),
-        skills: invalidated.flatMap(([, loaded]) => loaded.skills.map((skill) => skill.id)),
-      })
-      yield* bus.publish(Skill.Event.Updated, {}).pipe(Effect.asVoid)
-    })
-
-    const watch = Effect.fn("Skill.watch")(function* (directory: string) {
-      const target = path.resolve(directory)
-      if (watched.has(target)) return
-      watched.add(target)
-      const updates = yield* watcher.subscribe({ path: target, type: "directory" })
-      yield* updates.pipe(
-        Stream.runForEach((update) => invalidate(update.path)),
-        Effect.forkIn(scope, { startImmediately: true }),
-      )
-    })
-
-    const watchDirectory = Effect.fn("Skill.watchDirectory")(function* (directory: string) {
-      const target = path.resolve(directory)
-      const resolved = yield* fs.realPath(directory).pipe(Effect.catch(() => Effect.succeed(undefined)))
-      if (resolved) {
-        yield* watch(resolved)
-        if (resolved !== target) {
-          yield* watch(path.dirname(target))
-        }
-        return resolved === target ? [target] : [target, resolved]
-      }
-      if (yield* fs.isDir(path.dirname(target))) {
-        yield* watch(path.dirname(target))
-      }
-      return [target]
-    })
 
     const state = State.create<Data, Draft>({
       name: "skill",
@@ -138,8 +92,7 @@ const layer = Layer.effect(
         },
         list: () => draft.sources as Source[],
       }),
-      finalize: () =>
-        Effect.sync(() => cache.clear()).pipe(Effect.andThen(bus.publish(Skill.Event.Updated, {})), Effect.asVoid),
+      finalize: () => bus.publish(Skill.Event.Updated, {}).pipe(Effect.asVoid),
     })
 
     const load = Effect.fn("Skill.load")(function* (source: Source) {
@@ -151,22 +104,14 @@ const layer = Layer.effect(
           directories: [],
           skills: [source.skill.id],
         })
-        return { skills: [source.skill], paths: [] }
+        return { skills: [source.skill], directories: [] }
       }
       const directories = source.type === "directory" ? [source.path] : yield* discovery.pull(source.url)
-      const roots = (yield* Effect.forEach(directories, watchDirectory)).flat()
-      const paths = [...roots]
       for (const directory of directories) {
         const files = yield* fs
           .scan("{*.md,**/SKILL.md}", { cwd: directory, absolute: true, include: "file", symlink: true, dot: true })
           .pipe(Effect.catch(() => Effect.succeed([] as string[])))
         for (const filepath of files.toSorted()) {
-          const resolved = yield* fs.realPath(filepath).pipe(Effect.catch(() => Effect.succeed(filepath)))
-          if (!roots.some((root) => FSUtil.contains(root, resolved))) {
-            const external = path.dirname(resolved)
-            paths.push(external)
-            yield* watch(external)
-          }
           const content = yield* fs.readFileStringSafe(filepath).pipe(Effect.catch(() => Effect.succeed(undefined)))
           if (!content) continue
           const markdown = ConfigMarkdown.parseOption(content)
@@ -194,7 +139,22 @@ const layer = Layer.effect(
         directories,
         skills: skills.map((skill) => skill.id),
       })
-      return { skills, paths }
+      return { skills, directories }
+    })
+
+    const cache = new Map<string, { skills: Info[]; directories: readonly string[] }>()
+    const invalidate = Effect.fn("Skill.invalidateFromWatcher")(function* (file: string) {
+      const invalidated = Array.from(cache.entries()).filter(([, loaded]) =>
+        loaded.directories.some((directory) => FSUtil.contains(directory, file)),
+      )
+      if (invalidated.length === 0) return
+      for (const [key] of invalidated) cache.delete(key)
+      yield* Effect.logInfo("skill cache invalidated", {
+        file,
+        sources: invalidated.map(([key]) => key),
+        skills: invalidated.flatMap(([, loaded]) => loaded.skills.map((skill) => skill.id)),
+      })
+      yield* bus.publish(Skill.Event.Updated, {}).pipe(Effect.asVoid)
     })
 
     yield* bus.subscribe(FileSystem.Event.Changed).pipe(
@@ -227,5 +187,5 @@ const layer = Layer.effect(
 export const node = makeLocationNode({
   service: Service,
   layer,
-  deps: [SkillDiscovery.node, FSUtil.node, Bus.node, Watcher.node],
+  deps: [SkillDiscovery.node, FSUtil.node, Bus.node],
 })

packages/core/test/config/agent.test.ts

@@ -51,6 +51,11 @@ describe("ConfigAgentPlugin.Plugin", () => {
   it.effect("matches Windows paths against home-relative permissions", () =>
     Effect.gen(function* () {
       const permissions = yield* loadHomePermissions("C:\\Users\\test")
+      expect(permissions).toContainEqual({
+        action: "external_directory",
+        resource: "C:\\Users\\test\\p\\**",
+        effect: "allow",
+      })
       expect(
         Permission.evaluate("external_directory", "C:\\Users\\test\\p\\opencode\\src\\*", permissions).effect,
       ).toBe("allow")

packages/core/test/session-runner.test.ts

@@ -2440,6 +2440,30 @@ describe("SessionRunnerLLM", () => {
     }),
   )
 
+  it.effect("continues after an unknown finish containing a local tool call", () =>
+    Effect.gen(function* () {
+      const session = yield* setup
+      yield* admit(session, "Echo this")
+      yield* TestLLM.push(
+        TestLLM.complete(
+          { reason: { normalized: "unknown" } },
+          LLMEvent.toolCall({ id: "call-echo", name: "echo", input: { text: "hello" } }),
+        ),
+        TestLLM.text("Done", "text-final"),
+      )
+
+      yield* session.resume(sessionID)
+
+      expect(requests).toHaveLength(2)
+      expect(executions).toEqual(["hello"])
+      expect(yield* session.context(sessionID)).toMatchObject([
+        { type: "user", text: "Echo this" },
+        { type: "assistant", finish: "unknown", content: [{ type: "tool", state: { status: "completed" } }] },
+        { type: "assistant", finish: "stop", content: [{ type: "text", text: "Done" }] },
+      ])
+    }),
+  )
+
   it.effect("reloads a model switch before a tool-driven continuation step", () =>
     Effect.gen(function* () {
       const session = yield* setup

packages/core/test/skill.test.ts

@@ -6,11 +6,11 @@ import { Agent } from "@opencode-ai/core/agent"
 import { AppNodeBuilder } from "@opencode-ai/core/effect/app-node-builder"
 import { LayerNode } from "@opencode-ai/util/effect/layer-node"
 import { Bus } from "@opencode-ai/core/bus"
+import { FSUtil } from "@opencode-ai/util/fs-util"
 import { AbsolutePath } from "@opencode-ai/core/schema"
 import { Skill } from "@opencode-ai/core/skill"
 import { SkillDiscovery } from "@opencode-ai/core/skill/discovery"
 import { FileSystem } from "@opencode-ai/schema/filesystem"
-import { Watcher } from "@opencode-ai/core/filesystem/watcher"
 import { tmpdir } from "./fixture/tmpdir"
 import { testEffect } from "./lib/effect"
 
@@ -25,15 +25,8 @@ const discovery = Layer.succeed(
     },
   }),
 )
-const watcherLayer = Watcher.testLayer
 const it = testEffect(
-  Layer.mergeAll(
-    AppNodeBuilder.build(LayerNode.group([Skill.node, Agent.node, Bus.node]), [
-      [SkillDiscovery.node, discovery],
-      [Watcher.node, watcherLayer],
-    ]),
-    watcherLayer,
-  ),
+  AppNodeBuilder.build(LayerNode.group([Skill.node, Agent.node, Bus.node]), [[SkillDiscovery.node, discovery]]),
 )
 
 function write(directory: string, name: string, description: string) {
@@ -60,24 +53,6 @@ function waitForSkillUpdate() {
   })
 }
 
-function expectSubscription(check: (input: Watcher.WatchInput) => boolean) {
-  return Effect.gen(function* () {
-    const watcher = yield* Watcher.Test
-    expect((yield* watcher.subscriptions()).some(check)).toBe(true)
-  })
-}
-
-function emitAndWait(update: Watcher.Update) {
-  return Effect.gen(function* () {
-    const watcher = yield* Watcher.Test
-    yield* Effect.acquireUseRelease(
-      waitForSkillUpdate(),
-      ({ deferred }) => watcher.emit(update).pipe(Effect.andThen(Deferred.await(deferred)), Effect.timeout("1 second")),
-      ({ fiber }) => Fiber.interrupt(fiber),
-    )
-  })
-}
-
 describe("Skill", () => {
   it.live("publishes updates when skill sources change", () =>
     Effect.gen(function* () {
@@ -223,7 +198,7 @@ metadata:
     ),
   )
 
-  it.live("clears cached skills when sources reload", () =>
+  it.live("invalidates cached skills and publishes updates for watcher changes", () =>
     Effect.acquireRelease(
       Effect.promise(() => tmpdir()),
       (tmp) => Effect.promise(() => tmp[Symbol.asyncDispose]()),
@@ -235,155 +210,26 @@ metadata:
             await write(tmp.path, "deploy", "Initial deploy")
           })
 
+          const bus = yield* Bus.Service
           const skill = yield* Skill.Service
           yield* skill.transform((editor) => editor.source({ type: "directory", path: AbsolutePath.make(tmp.path) }))
-          expect((yield* skill.list()).find((item) => item.id === "deploy")?.description).toBe("Initial deploy")
 
+          expect((yield* skill.list()).find((item) => item.name === "deploy")?.description).toBe("Initial deploy")
+
+          const file = path.join(tmp.path, "deploy", "SKILL.md")
           yield* Effect.promise(() => write(tmp.path, "deploy", "Updated deploy"))
-          yield* skill.reload()
+          expect((yield* skill.list()).find((item) => item.name === "deploy")?.description).toBe("Initial deploy")
 
-          expect((yield* skill.list()).find((item) => item.id === "deploy")?.description).toBe("Updated deploy")
-        }),
-      ),
-    ),
-  )
-
-  it.live("reloads project sources created after their missing parent", () =>
-    Effect.acquireRelease(
-      Effect.promise(() => tmpdir()),
-      (tmp) => Effect.promise(() => tmp[Symbol.asyncDispose]()),
-    ).pipe(
-      Effect.flatMap((tmp) =>
-        Effect.gen(function* () {
-          const source = path.join(tmp.path, "generated", "skills")
-          const file = path.join(source, "deploy", "SKILL.md")
-          const skill = yield* Skill.Service
-          const bus = yield* Bus.Service
-          yield* skill.transform((editor) => editor.source({ type: "directory", path: AbsolutePath.make(source) }))
-          expect(yield* skill.list()).toEqual([])
-
-          yield* Effect.promise(async () => {
-            await fs.mkdir(path.dirname(file), { recursive: true })
-            await write(source, "deploy", "Deploy production")
-          })
           yield* Effect.acquireUseRelease(
             waitForSkillUpdate(),
             ({ deferred }) =>
               bus
-                .publish(FileSystem.Event.Changed, { file, event: "add" })
+                .publish(FileSystem.Event.Changed, { file, event: "change" })
                 .pipe(Effect.andThen(Deferred.await(deferred)), Effect.timeout("1 second")),
             ({ fiber }) => Fiber.interrupt(fiber),
           )
 
-          expect((yield* skill.list()).map((item) => item.id)).toEqual([Skill.ID.make("deploy")])
-        }),
-      ),
-    ),
-  )
-
-  it.live("watches directory sources for added and changed skills", () =>
-    Effect.acquireRelease(
-      Effect.promise(() => tmpdir()),
-      (tmp) => Effect.promise(() => tmp[Symbol.asyncDispose]()),
-    ).pipe(
-      Effect.flatMap((tmp) =>
-        Effect.gen(function* () {
-          yield* Effect.promise(async () => {
-            await fs.mkdir(path.join(tmp.path, "deploy"), { recursive: true })
-            await write(tmp.path, "deploy", "Initial deploy")
-          })
-
-          const skill = yield* Skill.Service
-          yield* skill.transform((editor) => editor.source({ type: "directory", path: AbsolutePath.make(tmp.path) }))
-          expect((yield* skill.list()).map((item) => item.id)).toEqual([Skill.ID.make("deploy")])
-          yield* expectSubscription((input) => input.type === "directory" && input.path === tmp.path)
-
-          const deploy = path.join(tmp.path, "deploy", "SKILL.md")
-          yield* Effect.promise(() => write(tmp.path, "deploy", "Updated deploy"))
-          yield* emitAndWait({ type: "update", path: deploy })
-          expect((yield* skill.list()).find((item) => item.id === "deploy")?.description).toBe("Updated deploy")
-
-          yield* Effect.promise(async () => {
-            await fs.mkdir(path.join(tmp.path, "review"), { recursive: true })
-            await write(tmp.path, "review", "Review changes")
-          })
-          const review = path.join(tmp.path, "review", "SKILL.md")
-          yield* emitAndWait({ type: "create", path: review })
-          expect((yield* skill.list()).map((item) => item.id)).toEqual([
-            Skill.ID.make("deploy"),
-            Skill.ID.make("review"),
-          ])
-
-          yield* Effect.promise(() => fs.rm(path.join(tmp.path, "review"), { recursive: true }))
-          yield* emitAndWait({ type: "delete", path: review })
-          expect((yield* skill.list()).map((item) => item.id)).toEqual([Skill.ID.make("deploy")])
-        }),
-      ),
-    ),
-  )
-
-  it.live("watches canonical directories behind symlinked skills", () =>
-    Effect.acquireRelease(
-      Effect.promise(() => tmpdir()),
-      (tmp) => Effect.promise(() => tmp[Symbol.asyncDispose]()),
-    ).pipe(
-      Effect.flatMap((tmp) =>
-        Effect.gen(function* () {
-          const source = path.join(tmp.path, "source")
-          const target = path.join(tmp.path, "target", "bro")
-          const file = path.join(target, "SKILL.md")
-          yield* Effect.promise(async () => {
-            await fs.mkdir(source, { recursive: true })
-            await fs.mkdir(target, { recursive: true })
-            await fs.writeFile(file, "---\nname: bro\ndescription: Initial\n---\n# bro")
-            await fs.symlink(target, path.join(source, "bro"))
-          })
-
-          const skill = yield* Skill.Service
-          yield* skill.transform((editor) => editor.source({ type: "directory", path: AbsolutePath.make(source) }))
-          expect((yield* skill.list()).find((item) => item.id === "bro")?.description).toBe("Initial")
-          yield* expectSubscription((input) => input.type === "directory" && input.path === target)
-
-          yield* Effect.promise(() => fs.writeFile(file, "---\nname: bro\ndescription: Updated\n---\n# bro"))
-          yield* emitAndWait({ type: "update", path: file })
-          expect((yield* skill.list()).find((item) => item.id === "bro")?.description).toBe("Updated")
-        }),
-      ),
-    ),
-  )
-
-  it.live("invalidates symlinked sources when their target changes", () =>
-    Effect.acquireRelease(
-      Effect.promise(() => tmpdir()),
-      (tmp) => Effect.promise(() => tmp[Symbol.asyncDispose]()),
-    ).pipe(
-      Effect.flatMap((tmp) =>
-        Effect.gen(function* () {
-          const source = path.join(tmp.path, "source")
-          const first = path.join(tmp.path, "first")
-          const second = path.join(tmp.path, "second")
-          yield* Effect.promise(async () => {
-            await fs.mkdir(path.join(first, "bro"), { recursive: true })
-            await fs.mkdir(path.join(second, "bro"), { recursive: true })
-            await write(first, "bro", "First")
-            await write(second, "bro", "Second")
-            await fs.symlink(first, source)
-          })
-
-          const skill = yield* Skill.Service
-          yield* skill.transform((editor) => editor.source({ type: "directory", path: AbsolutePath.make(source) }))
-          expect((yield* skill.list()).find((item) => item.id === "bro")?.description).toBe("First")
-          yield* expectSubscription((input) => input.type === "directory" && input.path === first)
-          yield* expectSubscription((input) => input.type === "directory" && input.path === tmp.path)
-
-          yield* Effect.promise(async () => {
-            await fs.unlink(source)
-            await fs.symlink(second, source)
-          })
-          yield* emitAndWait({ type: "update", path: source })
-
-          expect((yield* skill.list()).find((item) => item.id === "bro")?.description).toBe("Second")
-          yield* expectSubscription((input) => input.type === "directory" && input.path === second)
+          expect((yield* skill.list()).find((item) => item.name === "deploy")?.description).toBe("Updated deploy")
         }),
       ),
     ),

packages/tui/src/app.tsx

@@ -512,7 +512,7 @@ function App(props: { pair?: DialogPairCredentials }) {
   const terminalTitleEnabled = () => config.data.terminal?.title ?? true
   const copyOnSelectEnabled = () => config.data.terminal?.copy_on_select ?? process.platform !== "win32"
   const pasteSummaryEnabled = () => config.data.prompt?.paste !== "full"
-  const tabsVertical = () => (config.data.tabs?.vertical ?? false) && sessionTabsFitVertically(dimensions().width)
+  const tabsVertical = () => config.data.tabs.layout === "vertical" && sessionTabsFitVertically(dimensions().width)
   const tabsVisible = () =>
     sessionTabs.enabled() && (sessionTabs.tabs().length > 0 || sessionTabs.newTab()) && route.data.type !== "plugin"
 

packages/tui/src/component/dialog-config.tsx

@@ -101,12 +101,11 @@ export const settings: Setting[] = [
     labels: ["current directory", "global"],
   },
   {
-    title: "Vertical",
+    title: "Layout",
     category: "Tabs",
-    path: ["tabs", "vertical"],
-    default: false,
-    values: [false, true],
-    labels: ["off", "on"],
+    path: ["tabs", "layout"],
+    default: "horizontal",
+    values: ["horizontal", "vertical"],
     keywords: ["sidebar", "orientation", "left"],
   },
   {

packages/tui/src/config/index.tsx

@@ -132,8 +132,8 @@ export const Info = Schema.Struct({
       scope: Schema.optional(Schema.Literals(["global", "cwd"])).annotate({
         description: "Share tabs globally or keep a separate set for each working directory",
       }),
-      vertical: Schema.optional(Schema.Boolean).annotate({
-        description: "Show tabs in a left sidebar instead of a horizontal strip",
+      layout: Schema.optional(Schema.Literals(["horizontal", "vertical"])).annotate({
+        description: "Show tabs in a horizontal strip or vertical sidebar",
       }),
     }),
   ).annotate({ description: "Tab strip settings" }),
@@ -194,7 +194,7 @@ export type Resolved = Omit<Info, "attention" | "keybinds" | "leader" | "mouse"
   tabs: {
     enabled: boolean
     scope: "global" | "cwd"
-    vertical?: boolean
+    layout: "horizontal" | "vertical"
   }
 }
 
@@ -230,6 +230,7 @@ export function resolve(input: Info, options: { terminalSuspend: boolean }): Res
       ...input.tabs,
       enabled: input.tabs?.enabled ?? true,
       scope: input.tabs?.scope ?? "cwd",
+      layout: input.tabs?.layout ?? "horizontal",
     },
   }
 }

packages/tui/src/routes/session/index.tsx

@@ -204,7 +204,7 @@ export function Session() {
   const availableWidth = createMemo(
     () =>
       dimensions().width -
-      (config.tabs?.enabled && config.tabs.vertical && sessionTabsFitVertically(dimensions().width)
+      (config.tabs?.enabled && config.tabs.layout === "vertical" && sessionTabsFitVertically(dimensions().width)
         ? SESSION_SIDEBAR_WIDTH
         : 0),
   )

packages/tui/test/config-v2.test.tsx

@@ -18,7 +18,10 @@ test("validates mini replay settings", () => {
 test("validates the session tabs setting", () => {
   const decode = Schema.decodeUnknownSync(Info)
 
-  expect(decode({ tabs: { enabled: true, vertical: true } })).toEqual({ tabs: { enabled: true, vertical: true } })
+  expect(decode({ tabs: { enabled: true, layout: "vertical" } })).toEqual({
+    tabs: { enabled: true, layout: "vertical" },
+  })
+  expect(() => decode({ tabs: { layout: true } })).toThrow()
   expect(() => decode({ tabs: { enabled: "on" } })).toThrow()
 })
 
@@ -39,12 +42,13 @@ test("resolves nested config and keybind defaults", () => {
   expect(config.scroll).toEqual({ speed: 2, acceleration: true })
   expect(config.diffs).toEqual({ view: "split" })
   expect(config.debug).toEqual({ devtools: true })
-  expect(config.tabs).toEqual({ enabled: true, scope: "cwd" })
+  expect(config.tabs).toEqual({ enabled: true, scope: "cwd", layout: "horizontal" })
 })
 
 test("shows resolved tab defaults in settings", () => {
   expect(settings.find((setting) => setting.path.join(".") === "tabs.enabled")?.default).toBe(true)
   expect(settings.find((setting) => setting.path.join(".") === "tabs.scope")?.default).toBe("cwd")
+  expect(settings.find((setting) => setting.path.join(".") === "tabs.layout")?.default).toBe("horizontal")
 })
 
 test("provides config and its host interface", async () => {