diff --git a/src/browser/App.tsx b/src/browser/App.tsx
index 935d2b74ec..eda286922d 100644
--- a/src/browser/App.tsx
+++ b/src/browser/App.tsx
@@ -141,7 +141,7 @@ function AppInner() {
     selectedWorkspace,
     setSelectedWorkspace,
     pendingNewWorkspaceProject,
-    pendingNewWorkspaceSectionId,
+    pendingNewWorkspaceSubProjectPath,
     pendingNewWorkspaceDraftId,
     beginWorkspaceCreation,
   } = useWorkspaceContext();
@@ -169,6 +169,7 @@ function AppInner() {
     refreshProjects,
     removeProject,
     openProjectCreateModal,
+    projectCreateInitialPath,
     isProjectCreateModalOpen,
     closeProjectCreateModal,
     addProject,
@@ -1154,7 +1155,7 @@ function AppInner() {
                     projectName={projectName}
                     leftSidebarCollapsed={sidebarCollapsed}
                     onToggleLeftSidebarCollapsed={handleToggleSidebar}
-                    pendingSectionId={pendingNewWorkspaceSectionId}
+                    pendingSubProjectPath={pendingNewWorkspaceSubProjectPath}
                     pendingDraftId={pendingNewWorkspaceDraftId}
                     onWorkspaceCreated={(metadata, options) => {
                       // IMPORTANT: Add workspace to store FIRST (synchronous) to ensure
@@ -1217,6 +1218,7 @@ function AppInner() {
         </div>
         <CommandPalette getSlashContext={() => ({ workspaceId: selectedWorkspace?.workspaceId })} />
         <ProjectCreateModal
+          initialPath={projectCreateInitialPath}
           isOpen={isProjectCreateModalOpen}
           onClose={closeProjectCreateModal}
           onSuccess={(normalizedPath, projectConfig) => {
diff --git a/src/browser/components/ProjectCreateModal/ProjectCreateModal.tsx b/src/browser/components/ProjectCreateModal/ProjectCreateModal.tsx
index 123b1a0d8a..4aaa36fc72 100644
--- a/src/browser/components/ProjectCreateModal/ProjectCreateModal.tsx
+++ b/src/browser/components/ProjectCreateModal/ProjectCreateModal.tsx
@@ -40,7 +40,9 @@ function useDirectoryPicker(params: {
   const browse = useCallback(async () => {
     if (isDesktop) {
       try {
-        const selectedPath = await api?.projects.pickDirectory();
+        // Seed the native directory picker with the user's current input so
+        // Browse opens at that path when it's already an existing directory.
+        const selectedPath = await api?.projects.pickDirectory({ initialPath });
         if (selectedPath) {
           onSelectPath(selectedPath);
         }
@@ -53,7 +55,7 @@ function useDirectoryPicker(params: {
     if (hasWebFsPicker) {
       setIsDirPickerOpen(true);
     }
-  }, [api, errorLabel, hasWebFsPicker, isDesktop, onSelectPath]);
+  }, [api, errorLabel, hasWebFsPicker, initialPath, isDesktop, onSelectPath]);
 
   const directoryPickerModal = hasWebFsPicker ? (
     <DirectoryPickerModal
@@ -68,6 +70,7 @@ function useDirectoryPicker(params: {
 }
 
 interface ProjectCreateModalProps {
+  initialPath?: string;
   isOpen: boolean;
   onClose: () => void;
   onSuccess: (normalizedPath: string, projectConfig: ProjectConfig) => void;
@@ -75,6 +78,8 @@ interface ProjectCreateModalProps {
 
 interface ProjectCreateFormProps {
   onSuccess: (normalizedPath: string, projectConfig: ProjectConfig) => void;
+  /** Optional initial path for parent-scoped sub-project creation. */
+  initialPath?: string;
   /**
    * Optional close handler for modal-style usage.
    * When provided, the form will call it on cancel and after a successful add.
@@ -102,6 +107,7 @@ export interface ProjectCreateFormHandle {
 export const ProjectCreateForm = React.forwardRef<ProjectCreateFormHandle, ProjectCreateFormProps>(
   function ProjectCreateForm(
     {
+      initialPath,
       onSuccess,
       onClose,
       showCancelButton = false,
@@ -116,10 +122,14 @@ export const ProjectCreateForm = React.forwardRef<ProjectCreateFormHandle, Proje
     ref
   ) {
     const { api } = useAPI();
-    const [path, setPath] = useState("");
+    const [path, setPath] = useState(initialPath ?? "");
     const [error, setError] = useState("");
     const [isCreating, setIsCreating] = useState(false);
 
+    useEffect(() => {
+      setPath(initialPath ?? "");
+    }, [initialPath]);
+
     const setCreating = useCallback(
       (next: boolean) => {
         setIsCreating(next);
@@ -776,6 +786,7 @@ export interface ProjectAddFormHandle {
 }
 
 interface ProjectAddFormProps {
+  initialPath?: string;
   onSuccess: (normalizedPath: string, projectConfig: ProjectConfig) => void;
   onClose?: () => void;
   isOpen: boolean;
@@ -912,6 +923,7 @@ export const ProjectAddForm = React.forwardRef<ProjectAddFormHandle, ProjectAddF
 
           {mode === "pick-folder" ? (
             <ProjectCreateForm
+              initialPath={props.initialPath}
               ref={projectCreateFormRef}
               onSuccess={props.onSuccess}
               onClose={props.onClose}
@@ -960,6 +972,7 @@ ProjectAddForm.displayName = "ProjectAddForm";
  * validation errors inline. Modal stays open until project is successfully created or user cancels.
  */
 export const ProjectCreateModal: React.FC<ProjectCreateModalProps> = ({
+  initialPath,
   isOpen,
   onClose,
   onSuccess,
@@ -984,6 +997,7 @@ export const ProjectCreateModal: React.FC<ProjectCreateModalProps> = ({
         </DialogHeader>
 
         <ProjectAddForm
+          initialPath={initialPath}
           isOpen={isOpen}
           onSuccess={onSuccess}
           onClose={onClose}
diff --git a/src/browser/components/ProjectPage/ProjectPage.stories.tsx b/src/browser/components/ProjectPage/ProjectPage.stories.tsx
index b2fdcb689e..d131c80944 100644
--- a/src/browser/components/ProjectPage/ProjectPage.stories.tsx
+++ b/src/browser/components/ProjectPage/ProjectPage.stories.tsx
@@ -133,9 +133,8 @@ export const CreateWorkspaceMultipleProjects: AppStory = {
 };
 
 /**
- * Creation view with project sections configured.
- * On desktop the section selector is inline / right-aligned in the header row.
- * On mobile it drops to its own row below the header.
+ * Creation view with sub-projects configured.
+ * Sub-projects are shown in the sidebar rather than in a creation-time section selector.
  *
  * Includes mobile chromatic modes: the sidebar starts expanded via
  * localStorage so the play function can click the project row, then
@@ -161,15 +160,32 @@ export const CreateWorkspaceWithSections: AppStory = {
         localStorage.setItem(LEFT_SIDEBAR_COLLAPSED_KEY, JSON.stringify(false));
         return createMockORPCClient({
           projects: new Map([
+            ["/Users/dev/my-project", { workspaces: [] }],
             [
-              "/Users/dev/my-project",
+              "/Users/dev/my-project/frontend",
               {
+                displayName: "Frontend",
+                color: "#4f8cf7",
+                parentProjectPath: "/Users/dev/my-project",
+                workspaces: [],
+              },
+            ],
+            [
+              "/Users/dev/my-project/backend",
+              {
+                displayName: "Backend",
+                color: "#f76b4f",
+                parentProjectPath: "/Users/dev/my-project",
+                workspaces: [],
+              },
+            ],
+            [
+              "/Users/dev/my-project/infra",
+              {
+                displayName: "Infra",
+                color: "#8b5cf6",
+                parentProjectPath: "/Users/dev/my-project",
                 workspaces: [],
-                sections: [
-                  { id: "sec_0001", name: "Frontend", color: "#4f8cf7", nextId: "sec_0002" },
-                  { id: "sec_0002", name: "Backend", color: "#f76b4f", nextId: "sec_0003" },
-                  { id: "sec_0003", name: "Infra", color: "#8b5cf6", nextId: null },
-                ],
               },
             ],
           ]),
@@ -198,35 +214,15 @@ export const CreateWorkspaceWithSections: AppStory = {
         }
       }
 
-      // Wait for the section selector to be visible. Two instances exist in
-      // the DOM (one for desktop inline, one for mobile own-row via
-      // hidden/md:hidden). Find the one that's actually rendered.
+      // The creation form should stay focused on workspace setup; sub-project selection
+      // now happens by navigating to the nested project in the sidebar.
       await waitFor(
         () => {
-          const allSelectors = storyRoot.querySelectorAll<HTMLElement>(
-            "[data-testid='section-selector']"
+          const workspaceNameGroup = storyRoot.querySelector(
+            "[data-component='WorkspaceNameGroup']"
           );
-          const sectionSelector = Array.from(allSelectors).find(
-            (el) => el.offsetWidth > 0 && el.offsetHeight > 0
-          );
-          if (!sectionSelector) {
-            throw new Error("Section selector not visible");
-          }
-
-          // On narrow viewports, verify the section selector sits below
-          // the header row (mobile-only own-row layout).
-          if (window.innerWidth < 768) {
-            const headerRow = storyRoot.querySelector("[data-component='WorkspaceNameGroup']");
-            if (!headerRow) {
-              throw new Error("Workspace name header row not found");
-            }
-            const headerBottom = headerRow.getBoundingClientRect().bottom;
-            const sectionTop = sectionSelector.getBoundingClientRect().top;
-            if (sectionTop < headerBottom) {
-              throw new Error(
-                `Section selector overlaps header row (section top=${sectionTop}, header bottom=${headerBottom})`
-              );
-            }
+          if (!workspaceNameGroup) {
+            throw new Error("Workspace name header row not found");
           }
         },
         { timeout: 10000 }
diff --git a/src/browser/components/ProjectPage/ProjectPage.tsx b/src/browser/components/ProjectPage/ProjectPage.tsx
index bf02d41a9e..5b70a79ea0 100644
--- a/src/browser/components/ProjectPage/ProjectPage.tsx
+++ b/src/browser/components/ProjectPage/ProjectPage.tsx
@@ -39,10 +39,10 @@ interface ProjectPageProps {
   projectName: string;
   leftSidebarCollapsed: boolean;
   onToggleLeftSidebarCollapsed: () => void;
+  /** Sub-project path for parent-owned draft creation. */
+  pendingSubProjectPath?: string | null;
   /** Draft ID for UI-only workspace creation drafts (from URL) */
   pendingDraftId?: string | null;
-  /** Section ID to pre-select when creating (from sidebar section "+" button) */
-  pendingSectionId?: string | null;
   onWorkspaceCreated: (
     metadata: FrontendWorkspaceMetadata,
     options?: WorkspaceCreatedOptions
@@ -74,8 +74,8 @@ export const ProjectPage: React.FC<ProjectPageProps> = ({
   projectName,
   leftSidebarCollapsed,
   onToggleLeftSidebarCollapsed,
+  pendingSubProjectPath,
   pendingDraftId,
-  pendingSectionId,
   onWorkspaceCreated,
 }) => {
   const { api } = useAPI();
@@ -319,7 +319,7 @@ export const ProjectPage: React.FC<ProjectPageProps> = ({
                         <ConfiguredProvidersBar providersConfig={providersConfig} />
                       )
                     )}
-                    {/* ChatInput for workspace creation - includes section selector */}
+                    {/* ChatInput for workspace creation. */}
                     <ChatInput
                       // Key by project + draft so project navigation and draft switches both remount
                       // creation-local state (including any in-flight creation overlays).
@@ -327,7 +327,7 @@ export const ProjectPage: React.FC<ProjectPageProps> = ({
                       variant="creation"
                       projectPath={projectPath}
                       projectName={projectName}
-                      pendingSectionId={pendingSectionId}
+                      pendingSubProjectPath={pendingSubProjectPath}
                       pendingDraftId={pendingDraftId}
                       onReady={handleChatReady}
                       onWorkspaceCreated={onWorkspaceCreated}
diff --git a/src/browser/components/ProjectSidebar/ProjectSidebar.test.tsx b/src/browser/components/ProjectSidebar/ProjectSidebar.test.tsx
index 5b3e9687db..bb728db4c6 100644
--- a/src/browser/components/ProjectSidebar/ProjectSidebar.test.tsx
+++ b/src/browser/components/ProjectSidebar/ProjectSidebar.test.tsx
@@ -187,12 +187,7 @@ function createProjectContextValue(
     updateSecrets: () => Promise.resolve(),
     updateDisplayName: () => resolveVoidResult(),
     updateColor: () => resolveVoidResult(),
-    createSection: () =>
-      Promise.resolve({ success: true, data: { id: "section-1", name: "Section" } }),
-    updateSection: () => resolveVoidResult(),
-    removeSection: () => resolveVoidResult(),
-    reorderSections: () => resolveVoidResult(),
-    assignWorkspaceToSection: () => resolveVoidResult(),
+    assignWorkspaceToSubProject: () => resolveVoidResult(),
     hasAnyProject: false,
     resolveNewChatProjectPath: () => null,
     ...overrides,
@@ -747,12 +742,7 @@ describe("ProjectSidebar multi-project completed-subagent toggles", () => {
       updateSecrets: () => Promise.resolve(),
       updateDisplayName: () => resolveVoidResult(),
       updateColor: () => resolveVoidResult(),
-      createSection: () =>
-        Promise.resolve({ success: true, data: { id: "section-1", name: "Section" } }),
-      updateSection: () => resolveVoidResult(),
-      removeSection: () => resolveVoidResult(),
-      reorderSections: () => resolveVoidResult(),
-      assignWorkspaceToSection: () => resolveVoidResult(),
+      assignWorkspaceToSubProject: () => resolveVoidResult(),
       hasAnyProject: true,
       resolveNewChatProjectPath: () => "/projects/demo-project",
     }));
@@ -858,12 +848,7 @@ describe("ProjectSidebar multi-project completed-subagent toggles", () => {
       updateSecrets: () => Promise.resolve(),
       updateDisplayName: () => resolveVoidResult(),
       updateColor: () => resolveVoidResult(),
-      createSection: () =>
-        Promise.resolve({ success: true, data: { id: "section-1", name: "Section" } }),
-      updateSection: () => resolveVoidResult(),
-      removeSection: () => resolveVoidResult(),
-      reorderSections: () => resolveVoidResult(),
-      assignWorkspaceToSection: () => resolveVoidResult(),
+      assignWorkspaceToSubProject: () => resolveVoidResult(),
       hasAnyProject: true,
       resolveNewChatProjectPath: () => "/projects/demo-project",
     }));
@@ -974,12 +959,7 @@ describe("ProjectSidebar multi-project completed-subagent toggles", () => {
       updateSecrets: () => Promise.resolve(),
       updateDisplayName: () => resolveVoidResult(),
       updateColor: () => resolveVoidResult(),
-      createSection: () =>
-        Promise.resolve({ success: true, data: { id: "section-1", name: "Section" } }),
-      updateSection: () => resolveVoidResult(),
-      removeSection: () => resolveVoidResult(),
-      reorderSections: () => resolveVoidResult(),
-      assignWorkspaceToSection: () => resolveVoidResult(),
+      assignWorkspaceToSubProject: () => resolveVoidResult(),
       hasAnyProject: true,
       resolveNewChatProjectPath: () => "/projects/demo-project",
     }));
@@ -1491,7 +1471,7 @@ describe("ProjectSidebar project actions menu", () => {
     const menuButtons = within(menu).getAllByRole("button");
     expect(menuButtons.map((button) => button.textContent)).toEqual([
       "Edit name",
-      "Add sub-folder",
+      "Add sub-project",
       "Manage secrets",
       "Change color",
       "Delete...",
@@ -1633,118 +1613,10 @@ describe("ProjectSidebar project actions menu", () => {
     expect(inputAfterRefresh?.value).toBe("#123456");
   });
 
-  test("Add sub-folder expands collapsed project before auto-editing", async () => {
-    window.localStorage.setItem(EXPANDED_PROJECTS_KEY, JSON.stringify([]));
-    const createSection = mock(() =>
-      Promise.resolve({
-        success: true as const,
-        data: { id: "new-section", name: "New sub-folder", color: "#6B7280", nextId: null },
-      })
-    );
-    projectContextValue = createProjectContextValue({
-      userProjects: new Map([
-        [
-          demoProjectPath,
-          {
-            workspaces: [],
-            sections: [
-              { id: "new-section", name: "New sub-folder", color: "#6B7280", nextId: null },
-            ],
-          },
-        ],
-      ]),
-      createSection,
-    });
-
-    const view = renderSidebar();
-    expect(view.getByRole("button", { name: "Expand project demo-project" })).toBeTruthy();
-
-    fireEvent.click(view.getByRole("button", { name: "Project options for demo-project" }));
-    fireEvent.click(view.getByRole("button", { name: "Add sub-folder" }));
-
-    await waitFor(() => {
-      expect(createSection).toHaveBeenCalledWith(demoProjectPath, "New sub-folder");
-      expect(view.getByRole("button", { name: "Collapse project demo-project" })).toBeTruthy();
-    });
-  });
-
-  test("Add sub-folder abandon reuses section-delete confirmation before removing", async () => {
-    const createSection = mock(() =>
-      Promise.resolve({
-        success: true as const,
-        data: { id: "new-section", name: "New sub-folder", color: "#6B7280", nextId: null },
-      })
-    );
-    const removeSection = mock(() => resolveVoidResult());
-    projectContextValue = createProjectContextValue({
-      userProjects: new Map([
-        [
-          demoProjectPath,
-          {
-            workspaces: [
-              {
-                path: `${demoProjectPath}/ws-in-section`,
-                sectionId: "new-section",
-              },
-            ],
-            sections: [
-              { id: "new-section", name: "New sub-folder", color: "#6B7280", nextId: null },
-            ],
-          },
-        ],
-      ]),
-      createSection,
-      removeSection,
-    });
-
-    const view = renderSidebar();
-
-    fireEvent.click(view.getByRole("button", { name: "Project options for demo-project" }));
-    fireEvent.click(view.getByRole("button", { name: "Add sub-folder" }));
-
-    await waitFor(() => {
-      expect(createSection).toHaveBeenCalledWith(demoProjectPath, "New sub-folder");
-    });
-
-    let autoEditProps:
-      | (Parameters<typeof SectionHeaderModule.SectionHeader>[0] & {
-          onAutoCreateAbandon?: () => void;
-          autoStartEditing?: boolean;
-        })
-      | null = null;
-    const sectionHeaderCalls = (
-      SectionHeaderModule.SectionHeader as unknown as {
-        mock: {
-          calls: Array<[Parameters<typeof SectionHeaderModule.SectionHeader>[0]]>;
-        };
-      }
-    ).mock.calls;
-    for (const [props] of sectionHeaderCalls) {
-      if (props.autoStartEditing) {
-        autoEditProps = props;
-      }
-    }
-
-    expect(autoEditProps?.autoStartEditing).toBe(true);
-    expect(typeof autoEditProps?.onAutoCreateAbandon).toBe("function");
-
-    autoEditProps?.onAutoCreateAbandon?.();
-
-    await waitFor(() => {
-      expect(confirmDialogMock).toHaveBeenCalledWith({
-        title: "Delete section?",
-        description: "1 workspace(s) in this section will be moved to unsectioned.",
-        confirmLabel: "Delete",
-        confirmVariant: "destructive",
-      });
-      expect(removeSection).toHaveBeenCalledWith(demoProjectPath, "new-section");
-    });
-  });
-
   test("marks section attention when a promoted draft workspace needs attention", () => {
     const promotedWorkspace = {
       ...createWorkspace("promoted-workspace", { title: "Promoted workspace" }),
-      sectionId: "section-1",
+      subProjectPath: "section-1",
       isInitializing: true,
     };
 
@@ -1756,10 +1628,18 @@ describe("ProjectSidebar project actions menu", () => {
             workspaces: [
               {
                 path: `${demoProjectPath}/promoted-workspace`,
-                sectionId: "section-1",
+                subProjectPath: "section-1",
               },
             ],
-            sections: [{ id: "section-1", name: "Section 1", color: "#6B7280", nextId: null }],
+          },
+        ],
+        [
+          "section-1",
+          {
+            displayName: "Section 1",
+            color: "#6B7280",
+            parentProjectPath: demoProjectPath,
+            workspaces: [],
           },
         ],
       ]),
@@ -1781,7 +1661,7 @@ describe("ProjectSidebar project actions menu", () => {
             [demoProjectPath]: [
               {
                 draftId: "draft-promoted",
-                sectionId: "section-1",
+                subProjectPath: "section-1",
                 createdAt: Date.now(),
               },
             ],
@@ -1895,7 +1775,7 @@ describe("ProjectSidebar project actions menu", () => {
             [demoProjectPath]: [
               {
                 draftId: "draft-hidden-empty",
-                sectionId: null,
+                subProjectPath: null,
                 createdAt: Date.now(),
               },
             ],
@@ -1931,7 +1811,7 @@ describe("ProjectSidebar project actions menu", () => {
             [demoProjectPath]: [
               {
                 draftId,
-                sectionId: null,
+                subProjectPath: null,
                 createdAt: Date.now(),
               },
             ],
diff --git a/src/browser/components/ProjectSidebar/ProjectSidebar.tsx b/src/browser/components/ProjectSidebar/ProjectSidebar.tsx
index 90a5ea1aa2..466707bc5a 100644
--- a/src/browser/components/ProjectSidebar/ProjectSidebar.tsx
+++ b/src/browser/components/ProjectSidebar/ProjectSidebar.tsx
@@ -56,7 +56,6 @@ import {
   getTierKey,
   getSectionExpandedKey,
   getSectionTierKey,
-  sortSectionsByLinkedList,
   type AgentRowRenderMeta,
 } from "@/browser/utils/ui/workspaceFiltering";
 import { Tooltip, TooltipTrigger, TooltipContent } from "../Tooltip/Tooltip";
@@ -104,7 +103,7 @@ import { SectionDragLayer } from "../SectionDragLayer/SectionDragLayer";
 import { DraggableSection } from "../DraggableSection/DraggableSection";
 import { Separator } from "../Separator/Separator";
 import { ScrollArea } from "../ScrollArea/ScrollArea";
-import type { SectionConfig } from "@/common/types/project";
+import { getProjectDisplayName, getSubProjectsForParent } from "@/common/utils/subProjects";
 import { getErrorMessage } from "@/common/utils/errors";
 import { isMultiProject } from "@/common/utils/multiProject";
 import { MULTI_PROJECT_SIDEBAR_SECTION_ID } from "@/common/constants/multiProject";
@@ -116,6 +115,12 @@ import { EXPERIMENT_IDS } from "@/common/constants/experiments";
 import { HexColorPicker } from "react-colorful";
 import { resolveSectionColor, SECTION_COLOR_PALETTE } from "@/common/constants/ui";
 
+interface SectionConfig {
+  id: string;
+  name: string;
+  color?: string;
+}
+
 // Re-export WorkspaceSelection for backwards compatibility
 export type { WorkspaceSelection } from "../AgentListItem/AgentListItem";
 
@@ -656,11 +661,7 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
     removeProject: onRemoveProject,
     updateDisplayName,
     updateColor: updateProjectColor,
-    createSection,
-    updateSection,
-    removeSection,
-    reorderSections,
-    assignWorkspaceToSection,
+    assignWorkspaceToSubProject,
   } = useProjectContext();
 
   // Theme for logo variant
@@ -670,7 +671,6 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
 
   // Mobile breakpoint for auto-closing sidebar
   const MOBILE_BREAKPOINT = 768;
-  const NEW_SUB_FOLDER_PLACEHOLDER_NAME = "New sub-folder";
   const projectListScrollRef = useRef<HTMLDivElement | null>(null);
   const mobileScrollTopRef = useRef(0);
   const wasCollapsedRef = useRef(collapsed);
@@ -739,8 +739,8 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
 
   // Wrapper to close sidebar on mobile after adding workspace
   const handleAddWorkspace = useCallback(
-    (projectPath: string, sectionId?: string) => {
-      createWorkspaceDraft(projectPath, sectionId);
+    (projectPath: string, subProjectPath?: string) => {
+      createWorkspaceDraft(projectPath, subProjectPath);
       if (window.innerWidth <= MOBILE_BREAKPOINT && !collapsed) {
         persistMobileSidebarScrollTop(mobileScrollTopRef.current);
         onToggleCollapsed();
@@ -1270,10 +1270,10 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
 
   const handleRemoveSection = async (
     projectPath: string,
-    sectionId: string,
+    subProjectPath: string,
     buttonElement?: HTMLElement
   ) => {
-    // Capture the anchor location up front because the section action menu unmounts its
+    // Capture the anchor location up front because the sub-project action menu unmounts its
     // button immediately after click; failures still need stable error placement.
     const anchor =
       buttonElement != null
@@ -1286,17 +1286,16 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
           })()
         : undefined;
 
-    // removeSection unsections every workspace in the project (including archived),
-    // so confirmation needs to count from the full project config.
+    // Removing a sub-project unregisters it and clears the cwd pointer from its workspaces.
     const workspacesInSection = (userProjects.get(projectPath)?.workspaces ?? []).filter(
-      (workspace) => workspace.sectionId === sectionId
+      (workspace) => workspace.subProjectPath === subProjectPath
     );
 
     if (workspacesInSection.length > 0) {
       const ok = await confirmDialog({
-        title: "Delete section?",
-        description: `${workspacesInSection.length} workspace(s) in this section will be moved to unsectioned.`,
-        confirmLabel: "Delete",
+        title: "Remove sub-project?",
+        description: `${workspacesInSection.length} workspace(s) in this sub-project will move back to the parent project.`,
+        confirmLabel: "Remove",
         confirmVariant: "destructive",
       });
       if (!ok) {
@@ -1304,10 +1303,10 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
       }
     }
 
-    const result = await removeSection(projectPath, sectionId);
+    const result = await onRemoveProject(subProjectPath);
     if (!result.success) {
-      const error = result.error ?? "Failed to remove section";
-      sectionRemoveError.showError(sectionId, error, anchor);
+      const error = getErrorMessage(result.error) || "Failed to remove sub-project";
+      sectionRemoveError.showError(subProjectPath, error, anchor);
     }
   };
 
@@ -1456,36 +1455,9 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
   );
 
   const handleProjectMenuAddSubFolder = useCallback(() => {
-    if (!projectMenuTargetPath) {
-      return;
-    }
-
-    const targetProjectPath = projectMenuTargetPath;
     closeProjectContextMenu();
-    void (async () => {
-      const result = await createSection(targetProjectPath, NEW_SUB_FOLDER_PLACEHOLDER_NAME);
-      if (!result.success) {
-        return;
-      }
-      setExpandedProjectsArray((prev) => {
-        const expanded = Array.isArray(prev) ? prev : [];
-        if (expanded.includes(targetProjectPath)) {
-          return expanded;
-        }
-        return [...expanded, targetProjectPath];
-      });
-      // New sub-folders should immediately open inline rename and stay visible.
-      const key = getSectionExpandedKey(targetProjectPath, result.data.id);
-      setExpandedSections((prev) => ({ ...prev, [key]: true }));
-      setAutoEditingSection({ projectPath: targetProjectPath, sectionId: result.data.id });
-    })();
-  }, [
-    closeProjectContextMenu,
-    createSection,
-    projectMenuTargetPath,
-    setExpandedProjectsArray,
-    setExpandedSections,
-  ]);
+    onAddProject(projectMenuTargetPath ? { initialPath: projectMenuTargetPath } : undefined);
+  }, [closeProjectContextMenu, onAddProject, projectMenuTargetPath]);
 
   const projectMenuTargetConfig = projectMenuTargetPath
     ? (userProjects.get(projectMenuTargetPath) ?? null)
@@ -1576,7 +1548,10 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
   // Memoize sorted project PATHS (not entries) to avoid capturing stale config objects.
   // Sorting depends only on keys + order; we read configs from the live Map during render.
   const sortedProjectPaths = React.useMemo(
-    () => sortProjectsByOrder(userProjects, projectOrder).map(([p]) => p),
+    () =>
+      sortProjectsByOrder(userProjects, projectOrder)
+        .filter(([, config]) => !config.parentProjectPath)
+        .map(([p]) => p),
     // projectPathsSignature captures projects Map keys
     // eslint-disable-next-line react-hooks/exhaustive-deps
     [projectPathsSignature, projectOrder]
@@ -1681,7 +1656,7 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
                   </button>
                 </div>
                 <button
-                  onClick={onAddProject}
+                  onClick={() => onAddProject()}
                   aria-label="Add project"
                   className="text-secondary hover:bg-hover hover:border-border-light flex h-6 shrink-0 cursor-pointer items-center gap-1 rounded border border-transparent bg-transparent px-1.5 text-xs transition-all duration-200"
                 >
@@ -1771,7 +1746,7 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
                   <div className="px-4 py-8 text-center">
                     <p className="text-muted mb-4 text-[13px]">No projects</p>
                     <button
-                      onClick={onAddProject}
+                      onClick={() => onAddProject()}
                       className="bg-accent hover:bg-accent-dark cursor-pointer rounded border-none px-4 py-2 text-[13px] text-white transition-colors duration-200"
                     >
                       Add Project
@@ -2012,7 +1987,14 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
                               const workspacesForNormalRendering = allWorkspaces.filter(
                                 (workspace) => !promotedWorkspaceIds.has(workspace.id)
                               );
-                              const sections = sortSectionsByLinkedList(config.sections ?? []);
+                              const sections: SectionConfig[] = getSubProjectsForParent(
+                                projectPath,
+                                userProjects
+                              ).map(([subProjectPath, subProjectConfig]) => ({
+                                id: subProjectPath,
+                                name: getProjectDisplayName(subProjectPath, subProjectConfig),
+                                color: subProjectConfig.color,
+                              }));
                               const depthByWorkspaceId = computeWorkspaceDepthMap(allWorkspaces);
                               const visibleWorkspacesForNormalRendering = filterVisibleAgentRows(
                                 workspacesForNormalRendering,
@@ -2045,9 +2027,9 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
                               const normalizeDraftSectionId = (
                                 draft: (typeof sortedDrafts)[number]
                               ): string | null => {
-                                return typeof draft.sectionId === "string" &&
-                                  sectionIds.has(draft.sectionId)
-                                  ? draft.sectionId
+                                return typeof draft.subProjectPath === "string" &&
+                                  sectionIds.has(draft.subProjectPath)
+                                  ? draft.subProjectPath
                                   : null;
                               };
 
@@ -2397,7 +2379,7 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
                                             normalizeDraftSectionId(fallback)
                                           );
                                         } else {
-                                          navigateToProject(projectPath, sectionId ?? undefined);
+                                          navigateToProject(sectionId ?? projectPath);
                                         }
                                       }
 
@@ -2672,7 +2654,7 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
                                 targetSectionId: string | null
                               ) => {
                                 void (async () => {
-                                  const result = await assignWorkspaceToSection(
+                                  const result = await assignWorkspaceToSubProject(
                                     projectPath,
                                     workspaceId,
                                     targetSectionId
@@ -2684,27 +2666,9 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
                                 })();
                               };
 
-                              // Handle section reorder (drag section onto another section)
-                              const handleSectionReorder = (
-                                draggedSectionId: string,
-                                targetSectionId: string
-                              ) => {
-                                void (async () => {
-                                  // Compute new order: move dragged section to position of target
-                                  const currentOrder = sections.map((s) => s.id);
-                                  const draggedIndex = currentOrder.indexOf(draggedSectionId);
-                                  const targetIndex = currentOrder.indexOf(targetSectionId);
-
-                                  if (draggedIndex === -1 || targetIndex === -1) return;
-
-                                  // Remove dragged from current position
-                                  const newOrder = [...currentOrder];
-                                  newOrder.splice(draggedIndex, 1);
-                                  // Insert at target position
-                                  newOrder.splice(targetIndex, 0, draggedSectionId);
-
-                                  await reorderSections(projectPath, newOrder);
-                                })();
+                              // Sub-project ordering is path/display-name derived in v1; no manual reorder.
+                              const handleSectionReorder = () => {
+                                // Sub-project ordering is alphabetical by display name in v1.
                               };
 
                               // Render section with its workspaces
@@ -2765,10 +2729,10 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
                                           if (shouldAutoEditSection) {
                                             setAutoEditingSection(null);
                                           }
-                                          void updateSection(projectPath, section.id, { name });
+                                          void updateDisplayName(section.id, name);
                                         }}
                                         onChangeColor={(color) => {
-                                          void updateSection(projectPath, section.id, { color });
+                                          void updateProjectColor(section.id, color);
                                         }}
                                         autoStartEditing={shouldAutoEditSection}
                                         onAutoCreateAbandon={
@@ -2814,7 +2778,7 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
                                             )
                                           ) : sectionDrafts.length === 0 ? (
                                             <div className="text-muted px-3 py-2 text-center text-xs italic">
-                                              No chats in this sub-folder
+                                              No chats in this sub-project
                                             </div>
                                           ) : null}
                                         </div>
@@ -2901,7 +2865,7 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
             />
             <PositionedMenuItem
               icon={<Plus className="h-4 w-4 shrink-0" strokeWidth={1.8} />}
-              label="Add sub-folder"
+              label="Add sub-project"
               disabled={!hasProjectMenuTarget}
               onClick={() => {
                 handleProjectMenuAddSubFolder();
@@ -3044,7 +3008,7 @@ const ProjectSidebarInner: React.FC<ProjectSidebarProps> = ({
           />
           <PopoverError
             error={sectionRemoveError.error}
-            prefix="Failed to remove section"
+            prefix="Failed to remove sub-project"
             onDismiss={sectionRemoveError.clearError}
           />
           {!(isDesktopMode() && collapsed) && (
diff --git a/src/browser/components/SectionHeader/SectionHeader.test.tsx b/src/browser/components/SectionHeader/SectionHeader.test.tsx
deleted file mode 100644
index 6d007be3a5..0000000000
--- a/src/browser/components/SectionHeader/SectionHeader.test.tsx
+++ /dev/null
@@ -1,230 +0,0 @@
-import "../../../../tests/ui/dom";
-
-import React, { type ComponentProps } from "react";
-import { afterEach, beforeEach, describe, expect, mock, test } from "bun:test";
-import { cleanup, fireEvent, render, waitFor } from "@testing-library/react";
-import { installDom } from "../../../../tests/ui/dom";
-import type * as WorkspaceStoreModule from "@/browser/stores/WorkspaceStore";
-import type { SectionConfig } from "@/common/types/project";
-import { TooltipProvider } from "../Tooltip/Tooltip";
-import type { SectionHeader as SectionHeaderComponent } from "./SectionHeader";
-
-let cleanupDom: (() => void) | null = null;
-
-let SectionHeader!: typeof SectionHeaderComponent;
-
-const baseSection: SectionConfig = {
-  id: "section-1",
-  name: "New sub-folder",
-  color: "#6B7280",
-  nextId: null,
-};
-
-function installTestDoubles() {
-  // Re-register the full WorkspaceStore mock before each test to avoid Bun's global mock leakage.
-  /* eslint-disable @typescript-eslint/no-require-imports */
-  const actualWorkspaceStore =
-    require("@/browser/stores/WorkspaceStore?real=1") as typeof WorkspaceStoreModule;
-  /* eslint-enable @typescript-eslint/no-require-imports */
-
-  void mock.module("@/browser/stores/WorkspaceStore", () => ({
-    ...actualWorkspaceStore,
-  }));
-}
-
-function renderSectionHeader(overrides: Partial<ComponentProps<typeof SectionHeader>> = {}) {
-  const onToggleExpand = mock(() => undefined);
-  const onAddWorkspace = mock(() => undefined);
-  const onRename = mock((_name: string) => undefined);
-  const onChangeColor = mock((_color: string) => undefined);
-  const onDelete = mock((_anchorEl: HTMLElement) => undefined);
-  const onAutoCreateAbandon = mock(() => undefined);
-  const onAutoCreateRenameCancel = mock(() => undefined);
-
-  const view = render(
-    <TooltipProvider>
-      <SectionHeader
-        section={baseSection}
-        isExpanded
-        workspaceCount={0}
-        hasAttention={false}
-        onToggleExpand={onToggleExpand}
-        onAddWorkspace={onAddWorkspace}
-        onRename={onRename}
-        onChangeColor={onChangeColor}
-        onDelete={onDelete}
-        autoStartEditing
-        onAutoCreateAbandon={onAutoCreateAbandon}
-        onAutoCreateRenameCancel={onAutoCreateRenameCancel}
-        {...overrides}
-      />
-    </TooltipProvider>
-  );
-
-  return {
-    ...view,
-    onRename,
-    onDelete,
-    onAutoCreateAbandon,
-    onAutoCreateRenameCancel,
-  };
-}
-
-beforeEach(() => {
-  cleanupDom = installDom();
-  installTestDoubles();
-  void mock.module("../../hooks/useContextMenuPosition", () => ({
-    useContextMenuPosition: () => {
-      const [isOpen, setIsOpen] = React.useState(false);
-      const [position, setPosition] = React.useState<{ x: number; y: number } | null>(null);
-
-      return {
-        position,
-        isOpen,
-        onContextMenu: (event: {
-          preventDefault?: () => void;
-          stopPropagation?: () => void;
-          clientX?: number;
-          clientY?: number;
-        }) => {
-          event.preventDefault?.();
-          event.stopPropagation?.();
-          setPosition({ x: event.clientX ?? 0, y: event.clientY ?? 0 });
-          setIsOpen(true);
-        },
-        onOpenChange: (open: boolean) => {
-          setIsOpen(open);
-        },
-        touchHandlers: {
-          onTouchStart: () => undefined,
-          onTouchEnd: () => undefined,
-          onTouchMove: () => undefined,
-        },
-        suppressClickIfLongPress: () => false,
-        close: () => {
-          setIsOpen(false);
-        },
-      };
-    },
-  }));
-  void mock.module("../PositionedMenu/PositionedMenu", () => ({
-    PositionedMenu: (props: { open: boolean; children: React.ReactNode }) =>
-      props.open ? <div data-testid="section-actions-menu">{props.children}</div> : null,
-    PositionedMenuItem: (props: {
-      label: string;
-      disabled?: boolean;
-      onClick: (event: React.MouseEvent<HTMLButtonElement>) => void;
-    }) => (
-      <button type="button" disabled={props.disabled} onClick={props.onClick}>
-        {props.label}
-      </button>
-    ),
-  }));
-
-  /* eslint-disable @typescript-eslint/no-require-imports */
-  ({ SectionHeader } = require("./SectionHeader?section-header-test=1") as {
-    SectionHeader: typeof SectionHeaderComponent;
-  });
-  /* eslint-enable @typescript-eslint/no-require-imports */
-});
-
-afterEach(() => {
-  cleanup();
-  mock.restore();
-  cleanupDom?.();
-  cleanupDom = null;
-});
-
-describe("SectionHeader auto-created section editing", () => {
-  test("starts in edit mode when autoStartEditing is true", async () => {
-    const view = renderSectionHeader();
-
-    await waitFor(() => {
-      const input = view.getByTestId("section-rename-input") as HTMLInputElement;
-      expect(input.value).toBe("New sub-folder");
-    });
-  });
-
-  test("removes section on Escape when user has not typed", async () => {
-    const view = renderSectionHeader();
-
-    const input = (await waitFor(() =>
-      view.getByTestId("section-rename-input")
-    )) as HTMLInputElement;
-    fireEvent.keyDown(input, { key: "Escape" });
-
-    expect(view.onAutoCreateAbandon).toHaveBeenCalledTimes(1);
-    expect(view.onRename).not.toHaveBeenCalled();
-  });
-
-  test("blur without edits exits auto-create mode without deleting", async () => {
-    const view = renderSectionHeader();
-
-    const input = (await waitFor(() =>
-      view.getByTestId("section-rename-input")
-    )) as HTMLInputElement;
-    fireEvent.blur(input);
-
-    expect(view.onAutoCreateRenameCancel).toHaveBeenCalledTimes(1);
-    expect(view.onAutoCreateAbandon).not.toHaveBeenCalled();
-    expect(view.onRename).not.toHaveBeenCalled();
-  });
-
-  test("clears auto-create editing on Escape after typing", async () => {
-    const view = renderSectionHeader();
-
-    const input = (await waitFor(() =>
-      view.getByTestId("section-rename-input")
-    )) as HTMLInputElement;
-    fireEvent.change(input, { target: { value: "Changed name" } });
-    fireEvent.keyDown(input, { key: "Escape" });
-
-    expect(view.onAutoCreateRenameCancel).toHaveBeenCalledTimes(1);
-    expect(view.onAutoCreateAbandon).not.toHaveBeenCalled();
-    expect(view.onRename).not.toHaveBeenCalled();
-  });
-});
-
-describe("SectionHeader actions menu", () => {
-  test("opens the menu when clicking section actions", () => {
-    const view = renderSectionHeader({ autoStartEditing: false });
-
-    expect(view.queryByTestId("section-actions-menu")).toBeNull();
-
-    fireEvent.click(view.getByLabelText("Section actions"));
-
-    expect(view.getByTestId("section-actions-menu")).toBeTruthy();
-  });
-
-  test("shows the color picker when selecting Change color", () => {
-    const view = renderSectionHeader({ autoStartEditing: false });
-
-    fireEvent.click(view.getByLabelText("Section actions"));
-    fireEvent.click(view.getByRole("button", { name: "Change color" }));
-
-    expect(view.container.querySelector(".section-color-picker")).not.toBeNull();
-  });
-
-  test("enters edit mode when selecting Rename", async () => {
-    const view = renderSectionHeader({ autoStartEditing: false });
-
-    fireEvent.click(view.getByLabelText("Section actions"));
-    fireEvent.click(view.getByRole("button", { name: "Rename" }));
-
-    await waitFor(() => {
-      expect(view.getByTestId("section-rename-input")).toBeTruthy();
-    });
-  });
-
-  test("calls onDelete when selecting Delete section", () => {
-    const view = renderSectionHeader({ autoStartEditing: false });
-
-    fireEvent.click(view.getByLabelText("Section actions"));
-
-    const deleteButton = view.getByRole("button", { name: "Delete section" });
-    fireEvent.click(deleteButton);
-
-    expect(view.onDelete).toHaveBeenCalledTimes(1);
-    expect(view.onDelete.mock.calls[0]?.[0]).toBe(deleteButton);
-  });
-});
diff --git a/src/browser/components/SectionHeader/SectionHeader.tsx b/src/browser/components/SectionHeader/SectionHeader.tsx
index 44cda17e8b..7147786dcd 100644
--- a/src/browser/components/SectionHeader/SectionHeader.tsx
+++ b/src/browser/components/SectionHeader/SectionHeader.tsx
@@ -10,7 +10,11 @@ import {
   Trash2,
   Plus,
 } from "lucide-react";
-import type { SectionConfig } from "@/common/types/project";
+interface SectionConfig {
+  id: string;
+  name: string;
+  color?: string;
+}
 import { Tooltip, TooltipTrigger, TooltipContent, TooltipIfPresent } from "../Tooltip/Tooltip";
 import { resolveSectionColor, SECTION_COLOR_PALETTE } from "@/common/constants/ui";
 import { HexColorPicker } from "react-colorful";
@@ -114,7 +118,7 @@ export const SectionHeader: React.FC<SectionHeaderProps> = ({
       <button
         onClick={onToggleExpand}
         className="text-secondary hover:text-foreground flex h-5 w-5 shrink-0 cursor-pointer items-center justify-center rounded border-none bg-transparent p-0 transition-colors"
-        aria-label={isExpanded ? "Collapse section" : "Expand section"}
+        aria-label={isExpanded ? "Collapse sub-project" : "Expand sub-project"}
         aria-expanded={isExpanded}
       >
         <span className="relative flex h-3.5 w-3.5 items-center justify-center">
@@ -168,8 +172,13 @@ export const SectionHeader: React.FC<SectionHeaderProps> = ({
         />
       ) : (
         <button
-          onClick={onToggleExpand}
-          onDoubleClick={startEditing}
+          // Clicking the sub-project name acts like clicking a top-level project row:
+          // it starts a new chat scoped to this sub-project. Expand/collapse stays on
+          // the chevron/folder icon to the left so the row remains a single primary
+          // action. Rename lives in the kebab menu — keeping double-click to rename
+          // here would race with this click handler (browsers fire click before
+          // dblclick), so a rename attempt would also create a stray draft.
+          onClick={onAddWorkspace}
           className={cn(
             "min-w-0 flex-1 cursor-pointer truncate border-none bg-transparent p-0 text-left text-xs font-medium",
             hasAttention ? "text-content-primary" : "text-content-secondary"
@@ -189,7 +198,7 @@ export const SectionHeader: React.FC<SectionHeaderProps> = ({
             <button
               onClick={onAddWorkspace}
               className="text-secondary hover:text-foreground hover:bg-hover flex h-5 w-5 cursor-pointer items-center justify-center rounded border-none bg-transparent p-0 text-sm transition-colors"
-              aria-label="New chat in section"
+              aria-label="New chat in sub-project"
             >
               <Plus className="h-4 w-4" />
             </button>
@@ -197,7 +206,7 @@ export const SectionHeader: React.FC<SectionHeaderProps> = ({
           <TooltipContent>New chat</TooltipContent>
         </Tooltip>
 
-        {/* Section actions kebab sits immediately to the right of New chat */}
+        {/* Sub-project actions kebab sits immediately to the right of New chat */}
         <Tooltip>
           <TooltipTrigger asChild>
             <button
@@ -217,12 +226,12 @@ export const SectionHeader: React.FC<SectionHeaderProps> = ({
                 sectionMenu.onContextMenu(e);
               }}
               className="text-muted hover:text-foreground hover:bg-hover flex h-5 w-5 cursor-pointer items-center justify-center rounded border-none bg-transparent p-0 transition-colors"
-              aria-label="Section actions"
+              aria-label="Sub-project actions"
             >
               <EllipsisVertical className="h-3.5 w-3.5" />
             </button>
           </TooltipTrigger>
-          <TooltipContent>Section actions</TooltipContent>
+          <TooltipContent>Sub-project actions</TooltipContent>
         </Tooltip>
 
         <PositionedMenu
@@ -258,7 +267,7 @@ export const SectionHeader: React.FC<SectionHeaderProps> = ({
                         sectionColor === color ? "border-white" : "border-transparent"
                       )}
                       style={{ backgroundColor: color }}
-                      aria-label={`Set section color to ${name}`}
+                      aria-label={`Set sub-project color to ${name}`}
                     />
                   </TooltipIfPresent>
                 ))}
@@ -299,7 +308,7 @@ export const SectionHeader: React.FC<SectionHeaderProps> = ({
           />
           <PositionedMenuItem
             icon={<Trash2 />}
-            label="Delete section"
+            label="Remove sub-project"
             variant="destructive"
             onClick={(event) => {
               onDelete(event.currentTarget);
diff --git a/src/browser/components/WorkspaceMenuBar/WorkspaceMenuBar.test.tsx b/src/browser/components/WorkspaceMenuBar/WorkspaceMenuBar.test.tsx
index 2c8ec8d65b..0c2ff38d37 100644
--- a/src/browser/components/WorkspaceMenuBar/WorkspaceMenuBar.test.tsx
+++ b/src/browser/components/WorkspaceMenuBar/WorkspaceMenuBar.test.tsx
@@ -7,6 +7,7 @@ import { installDom } from "../../../../tests/ui/dom";
 import * as APIModule from "@/browser/contexts/API";
 import * as AgentContextModule from "@/browser/contexts/AgentContext";
 import * as WorkspaceContextModule from "@/browser/contexts/WorkspaceContext";
+import * as ProjectContextModule from "@/browser/contexts/ProjectContext";
 import * as WorkspaceStoreModule from "@/browser/stores/WorkspaceStore";
 import * as GitStatusStoreModule from "@/browser/stores/GitStatusStore";
 import * as RuntimeStatusStoreModule from "@/browser/stores/RuntimeStatusStore";
@@ -123,6 +124,12 @@ function installWorkspaceMenuBarTestDoubles() {
         typeof WorkspaceContextModule.useWorkspaceContext
       >
   );
+  spyOn(ProjectContextModule, "useProjectContext").mockImplementation(
+    () =>
+      ({ userProjects: new Map() }) as unknown as ReturnType<
+        typeof ProjectContextModule.useProjectContext
+      >
+  );
   spyOn(WorkspaceStoreModule, "useWorkspaceSidebarState").mockImplementation(
     () =>
       ({
diff --git a/src/browser/components/WorkspaceMenuBar/WorkspaceMenuBar.tsx b/src/browser/components/WorkspaceMenuBar/WorkspaceMenuBar.tsx
index cc21e444ca..8525f09060 100644
--- a/src/browser/components/WorkspaceMenuBar/WorkspaceMenuBar.tsx
+++ b/src/browser/components/WorkspaceMenuBar/WorkspaceMenuBar.tsx
@@ -49,6 +49,8 @@ import { useAPI } from "@/browser/contexts/API";
 import { useAgent } from "@/browser/contexts/AgentContext";
 
 import { useWorkspaceActions, useWorkspaceContext } from "@/browser/contexts/WorkspaceContext";
+import { useProjectContext } from "@/browser/contexts/ProjectContext";
+import { formatProjectHierarchyLabel } from "@/common/utils/subProjects";
 import { isMultiProject } from "@/common/utils/multiProject";
 import { forkWorkspace } from "@/browser/utils/chatCommands";
 import { WORKSPACE_MENU_BAR_LEFT_SIDEBAR_COLLAPSED_PADDING_PX } from "@/constants/layout";
@@ -101,6 +103,16 @@ export const WorkspaceMenuBar: React.FC<WorkspaceMenuBarProps> = ({
   const runtimeStatus = useRuntimeStatus(workspaceId);
   const workspaceEntry = workspaceMetadata.get(workspaceId);
   const showMultiProjectStatus = workspaceEntry != null && isMultiProject(workspaceEntry);
+  // The workspace's metadata.projectName is the parent project (since worktrees
+  // are owned by the top-most parent). When the workspace is scoped to a
+  // sub-project we surface the hierarchy as "parent / child" so the menu bar
+  // alone reveals the sub-project context.
+  const { userProjects } = useProjectContext();
+  const subProjectPath = workspaceEntry?.subProjectPath;
+  const projectLabel =
+    subProjectPath && userProjects.has(subProjectPath)
+      ? formatProjectHierarchyLabel(subProjectPath, userProjects)
+      : projectName;
   const runtimeStatusStore = useRuntimeStatusStoreRaw();
   const { canInterrupt, isStarting, awaitingUserQuestion, loadedSkills, skillLoadErrors } =
     useWorkspaceSidebarState(workspaceId);
@@ -526,7 +538,7 @@ export const WorkspaceMenuBar: React.FC<WorkspaceMenuBarProps> = ({
           workspaceName={workspaceName}
           tooltipSide="bottom"
         />
-        <span className="min-w-0 truncate font-mono text-xs">{projectName}</span>
+        <span className="min-w-0 truncate font-mono text-xs">{projectLabel}</span>
         <div className="flex items-center gap-1">
           {/* BranchSelector keeps workspace-scoped local UI state (current branch fallback,
               open popover contents, remote expansion). Key it by workspace identity so
diff --git a/src/browser/contexts/ProjectContext.test.tsx b/src/browser/contexts/ProjectContext.test.tsx
index 17a8cb9ddf..f9e9ef7e11 100644
--- a/src/browser/contexts/ProjectContext.test.tsx
+++ b/src/browser/contexts/ProjectContext.test.tsx
@@ -84,14 +84,17 @@ describe("ProjectContext", () => {
   });
 
   test("loads projects on mount and supports add/remove mutations", async () => {
-    const initialProjects: Array<[string, ProjectConfig]> = [
+    let projects: Array<[string, ProjectConfig]> = [
       ["/alpha", { workspaces: [] }],
       ["/beta", { workspaces: [] }],
     ];
 
     const projectsApi = createMockAPI({
-      list: () => Promise.resolve(initialProjects),
-      remove: () => Promise.resolve({ success: true as const, data: undefined }),
+      list: () => Promise.resolve(projects),
+      remove: ({ projectPath }: { projectPath: string }) => {
+        projects = projects.filter(([path]) => path !== projectPath);
+        return Promise.resolve({ success: true as const, data: undefined });
+      },
       listBranches: () => Promise.resolve({ branches: ["main"], recommendedTrunk: "main" }),
       secrets: {
         get: () => Promise.resolve([{ key: "A", value: "1" }]),
diff --git a/src/browser/contexts/ProjectContext.tsx b/src/browser/contexts/ProjectContext.tsx
index b90e5e80ac..842d11ac37 100644
--- a/src/browser/contexts/ProjectContext.tsx
+++ b/src/browser/contexts/ProjectContext.tsx
@@ -9,7 +9,7 @@ import {
   type ReactNode,
 } from "react";
 import { useAPI } from "@/browser/contexts/API";
-import type { ProjectConfig, SectionConfig } from "@/common/types/project";
+import type { ProjectConfig } from "@/common/types/project";
 import type { BranchListResult } from "@/common/orpc/types";
 import type { z } from "zod";
 import type { ProjectRemoveErrorSchema } from "@/common/orpc/schemas/errors";
@@ -75,8 +75,9 @@ export interface ProjectContext {
   removeProject: (path: string, options?: { force?: boolean }) => Promise<ProjectRemoveResult>;
 
   // Project creation modal
+  projectCreateInitialPath?: string;
   isProjectCreateModalOpen: boolean;
-  openProjectCreateModal: () => void;
+  openProjectCreateModal: (options?: { initialPath?: string }) => void;
   closeProjectCreateModal: () => void;
 
   // Workspace modal state
@@ -91,23 +92,10 @@ export interface ProjectContext {
   updateDisplayName: (projectPath: string, displayName: string | null) => Promise<Result<void>>;
   updateColor: (projectPath: string, color: string | null) => Promise<Result<void>>;
 
-  // Section operations
-  createSection: (
-    projectPath: string,
-    name: string,
-    color?: string
-  ) => Promise<Result<SectionConfig>>;
-  updateSection: (
-    projectPath: string,
-    sectionId: string,
-    updates: { name?: string; color?: string }
-  ) => Promise<Result<void>>;
-  removeSection: (projectPath: string, sectionId: string) => Promise<Result<void>>;
-  reorderSections: (projectPath: string, sectionIds: string[]) => Promise<Result<void>>;
-  assignWorkspaceToSection: (
+  assignWorkspaceToSubProject: (
     projectPath: string,
     workspaceId: string,
-    sectionId: string | null
+    subProjectPath: string | null
   ) => Promise<Result<void>>;
   /** Whether any project (user or system) is loaded. */
   hasAnyProject: boolean;
@@ -147,6 +135,7 @@ export function ProjectProvider(props: { children: ReactNode }) {
     [allProjectsInternal]
   );
   const [loading, setLoading] = useState(true);
+  const [projectCreateInitialPath, setProjectCreateInitialPath] = useState<string | undefined>();
   const [isProjectCreateModalOpen, setProjectCreateModalOpen] = useState(false);
   const [workspaceModalState, setWorkspaceModalState] = useState<WorkspaceModalState>({
     isOpen: false,
@@ -258,6 +247,7 @@ export function ProjectProvider(props: { children: ReactNode }) {
             }
           }
 
+          await refreshProjects();
           return { success: true };
         }
 
@@ -279,7 +269,7 @@ export function ProjectProvider(props: { children: ReactNode }) {
         };
       }
     },
-    [api]
+    [api, refreshProjects]
   );
 
   const resolveProjectPath = useCallback(
@@ -486,70 +476,17 @@ export function ProjectProvider(props: { children: ReactNode }) {
     [api, refreshProjects]
   );
 
-  // Section operations
-  const createSection = useCallback(
-    async (projectPath: string, name: string, color?: string): Promise<Result<SectionConfig>> => {
-      if (!api) return { success: false, error: "API not connected" };
-      const result = await api.projects.sections.create({ projectPath, name, color });
-      if (result.success) {
-        await refreshProjects();
-      }
-      return result;
-    },
-    [api, refreshProjects]
-  );
-
-  const updateSection = useCallback(
-    async (
-      projectPath: string,
-      sectionId: string,
-      updates: { name?: string; color?: string }
-    ): Promise<Result<void>> => {
-      if (!api) return { success: false, error: "API not connected" };
-      const result = await api.projects.sections.update({ projectPath, sectionId, ...updates });
-      if (result.success) {
-        await refreshProjects();
-      }
-      return result;
-    },
-    [api, refreshProjects]
-  );
-
-  const removeSection = useCallback(
-    async (projectPath: string, sectionId: string): Promise<Result<void>> => {
-      if (!api) return { success: false, error: "API not connected" };
-      const result = await api.projects.sections.remove({ projectPath, sectionId });
-      if (result.success) {
-        await refreshProjects();
-      }
-      return result;
-    },
-    [api, refreshProjects]
-  );
-
-  const reorderSections = useCallback(
-    async (projectPath: string, sectionIds: string[]): Promise<Result<void>> => {
-      if (!api) return { success: false, error: "API not connected" };
-      const result = await api.projects.sections.reorder({ projectPath, sectionIds });
-      if (result.success) {
-        await refreshProjects();
-      }
-      return result;
-    },
-    [api, refreshProjects]
-  );
-
-  const assignWorkspaceToSection = useCallback(
+  const assignWorkspaceToSubProject = useCallback(
     async (
       projectPath: string,
       workspaceId: string,
-      sectionId: string | null
+      subProjectPath: string | null
     ): Promise<Result<void>> => {
       if (!api) return { success: false, error: "API not connected" };
-      const result = await api.projects.sections.assignWorkspace({
+      const result = await api.projects.subProjects.assignWorkspace({
         projectPath,
         workspaceId,
-        sectionId,
+        subProjectPath,
       });
       if (result.success) {
         await refreshProjects();
@@ -571,9 +508,16 @@ export function ProjectProvider(props: { children: ReactNode }) {
       refreshProjects,
       addProject,
       removeProject,
+      projectCreateInitialPath,
       isProjectCreateModalOpen,
-      openProjectCreateModal: () => setProjectCreateModalOpen(true),
-      closeProjectCreateModal: () => setProjectCreateModalOpen(false),
+      openProjectCreateModal: (options?: { initialPath?: string }) => {
+        setProjectCreateInitialPath(options?.initialPath);
+        setProjectCreateModalOpen(true);
+      },
+      closeProjectCreateModal: () => {
+        setProjectCreateModalOpen(false);
+        setProjectCreateInitialPath(undefined);
+      },
       workspaceModalState,
       openWorkspaceModal,
       closeWorkspaceModal,
@@ -582,11 +526,7 @@ export function ProjectProvider(props: { children: ReactNode }) {
       updateSecrets,
       updateDisplayName,
       updateColor,
-      createSection,
-      updateSection,
-      removeSection,
-      reorderSections,
-      assignWorkspaceToSection,
+      assignWorkspaceToSubProject,
     }),
     [
       userProjects,
@@ -599,6 +539,7 @@ export function ProjectProvider(props: { children: ReactNode }) {
       refreshProjects,
       addProject,
       removeProject,
+      projectCreateInitialPath,
       isProjectCreateModalOpen,
       workspaceModalState,
       openWorkspaceModal,
@@ -608,11 +549,7 @@ export function ProjectProvider(props: { children: ReactNode }) {
       updateSecrets,
       updateDisplayName,
       updateColor,
-      createSection,
-      updateSection,
-      removeSection,
-      reorderSections,
-      assignWorkspaceToSection,
+      assignWorkspaceToSubProject,
     ]
   );
 
diff --git a/src/browser/contexts/RouterContext.tsx b/src/browser/contexts/RouterContext.tsx
index 3fc72c7fc4..6af3df9390 100644
--- a/src/browser/contexts/RouterContext.tsx
+++ b/src/browser/contexts/RouterContext.tsx
@@ -26,7 +26,6 @@ export interface RouterContext {
   navigateToWorkspace: (workspaceId: string) => void;
   navigateToProject: (
     projectPath: string,
-    sectionId?: string,
     draftId?: string,
     options?: { replace?: boolean }
   ) => void;
@@ -46,9 +45,6 @@ export interface RouterContext {
   /** Optional project path carried via in-memory navigation state (not persisted on refresh). */
   currentProjectPathFromState: string | null;
 
-  /** Section ID for pending workspace creation (from URL) */
-  pendingSectionId: string | null;
-
   /** Draft ID for UI-only workspace creation drafts (from URL) */
   pendingDraftId: string | null;
 
@@ -343,14 +339,10 @@ function RouterContextInner(props: { children: ReactNode }) {
     const legacyPath = params.get("path");
     const projectParam = params.get("project");
     if (!projectParam && legacyPath) {
-      const section = params.get("section");
       const draft = params.get("draft");
       const projectId = getProjectRouteId(legacyPath);
       const nextParams = new URLSearchParams();
       nextParams.set("project", projectId);
-      if (section) {
-        nextParams.set("section", section);
-      }
       if (draft) {
         nextParams.set("draft", draft);
       }
@@ -358,7 +350,6 @@ function RouterContextInner(props: { children: ReactNode }) {
       void navigateRef.current(url, { replace: true, state: { projectPath: legacyPath } });
     }
   }, [location.pathname, location.search]);
-  const pendingSectionId = location.pathname === "/project" ? searchParams.get("section") : null;
   const pendingDraftId = location.pathname === "/project" ? searchParams.get("draft") : null;
 
   // Navigation defaults to push so back/forward keeps working as expected.
@@ -369,13 +360,10 @@ function RouterContextInner(props: { children: ReactNode }) {
   }, []);
 
   const navigateToProject = useCallback(
-    (path: string, sectionId?: string, draftId?: string, options?: { replace?: boolean }) => {
+    (path: string, draftId?: string, options?: { replace?: boolean }) => {
       const projectId = getProjectRouteId(path);
       const params = new URLSearchParams();
       params.set("project", projectId);
-      if (sectionId) {
-        params.set("section", sectionId);
-      }
       if (draftId) {
         params.set("draft", draftId);
       }
@@ -436,7 +424,6 @@ function RouterContextInner(props: { children: ReactNode }) {
       currentSettingsSection,
       currentProjectId,
       currentProjectPathFromState,
-      pendingSectionId,
       pendingDraftId,
       isAnalyticsOpen,
     }),
@@ -452,7 +439,6 @@ function RouterContextInner(props: { children: ReactNode }) {
       currentSettingsSection,
       currentProjectId,
       currentProjectPathFromState,
-      pendingSectionId,
       pendingDraftId,
       isAnalyticsOpen,
     ]
diff --git a/src/browser/contexts/ThinkingContext.test.tsx b/src/browser/contexts/ThinkingContext.test.tsx
index 69f0117c79..2dd4f247d6 100644
--- a/src/browser/contexts/ThinkingContext.test.tsx
+++ b/src/browser/contexts/ThinkingContext.test.tsx
@@ -170,12 +170,12 @@ function createWorkspaceContextValue(): WorkspaceContextValue {
     selectedWorkspace: null,
     setSelectedWorkspace: () => undefined,
     pendingNewWorkspaceProject: null,
-    pendingNewWorkspaceSectionId: null,
+    pendingNewWorkspaceSubProjectPath: null,
     pendingNewWorkspaceDraftId: null,
     beginWorkspaceCreation: () => undefined,
     workspaceDraftsByProject: {},
     createWorkspaceDraft: () => undefined,
-    updateWorkspaceDraftSection: () => undefined,
+    updateWorkspaceDraftSubProject: () => undefined,
     openWorkspaceDraft: () => undefined,
     deleteWorkspaceDraft: () => undefined,
     getWorkspaceInfo: (workspaceId) => Promise.resolve(metadataMap.get(workspaceId) ?? null),
diff --git a/src/browser/contexts/WorkspaceContext.tsx b/src/browser/contexts/WorkspaceContext.tsx
index 63b1aeb9d0..b1f6919999 100644
--- a/src/browser/contexts/WorkspaceContext.tsx
+++ b/src/browser/contexts/WorkspaceContext.tsx
@@ -280,7 +280,7 @@ function ensureCreatedAt(metadata: FrontendWorkspaceMetadata): void {
 
 export interface WorkspaceDraft {
   draftId: string;
-  sectionId: string | null;
+  subProjectPath: string | null;
   createdAt: number;
 }
 
@@ -291,15 +291,15 @@ type WorkspaceDraftPromotionsByProject = Record<string, Record<string, FrontendW
 function isWorkspaceDraft(value: unknown): value is WorkspaceDraft {
   if (!value || typeof value !== "object") return false;
 
-  const record = value as { draftId?: unknown; sectionId?: unknown; createdAt?: unknown };
+  const record = value as { draftId?: unknown; subProjectPath?: unknown; createdAt?: unknown };
   return (
     typeof record.draftId === "string" &&
     record.draftId.trim().length > 0 &&
     typeof record.createdAt === "number" &&
     Number.isFinite(record.createdAt) &&
-    (record.sectionId === null ||
-      record.sectionId === undefined ||
-      typeof record.sectionId === "string")
+    (record.subProjectPath === null ||
+      record.subProjectPath === undefined ||
+      typeof record.subProjectPath === "string")
   );
 }
 
@@ -317,14 +317,14 @@ function normalizeWorkspaceDraftsByProject(value: unknown): WorkspaceDraftsByPro
     for (const draft of drafts) {
       if (!isWorkspaceDraft(draft)) continue;
 
-      const normalizedSectionId =
-        typeof draft.sectionId === "string" && draft.sectionId.trim().length > 0
-          ? draft.sectionId
+      const normalizedSubProjectPath =
+        typeof draft.subProjectPath === "string" && draft.subProjectPath.trim().length > 0
+          ? draft.subProjectPath
           : null;
 
       nextDrafts.push({
         draftId: draft.draftId,
-        sectionId: normalizedSectionId,
+        subProjectPath: normalizedSubProjectPath,
         createdAt: draft.createdAt,
       });
     }
@@ -378,21 +378,21 @@ function isDraftEmpty(projectPath: string, draftId: string): boolean {
 }
 
 /**
- * Find an existing empty draft for a project (optionally within a specific section).
+ * Find an existing empty draft for a project (optionally within a specific sub-project).
  * Returns the draft ID if found, or null if no empty draft exists.
  */
 function findExistingEmptyDraft(
   workspaceDrafts: WorkspaceDraft[],
   projectPath: string,
-  sectionId?: string
+  subProjectPath?: string
 ): string | null {
-  const normalizedSectionId = sectionId ?? null;
+  const normalizedSubProjectPath = subProjectPath ?? null;
 
   for (const draft of workspaceDrafts) {
-    // Keep draft reuse scoped to the current section. When sectionId is undefined
-    // (project-level "New Workspace"), only reuse drafts with a null section so
-    // we don't silently move section-specific drafts into the root flow.
-    if ((draft.sectionId ?? null) !== normalizedSectionId) {
+    // Keep draft reuse scoped to the current sub-project. When subProjectPath is undefined
+    // (project-level "New Workspace"), only reuse drafts with a null sub-project so
+    // we don't silently move sub-project-specific drafts into the root flow.
+    if ((draft.subProjectPath ?? null) !== normalizedSubProjectPath) {
       continue;
     }
     if (isDraftEmpty(projectPath, draft.draftId)) {
@@ -467,26 +467,30 @@ export interface WorkspaceContext extends WorkspaceMetadataContextValue {
 
   // Workspace creation flow
   pendingNewWorkspaceProject: string | null;
-  /** Section ID to pre-select when creating a new workspace (from URL) */
-  pendingNewWorkspaceSectionId: string | null;
+  /** SubProject ID to pre-select when creating a new workspace (from URL) */
+  pendingNewWorkspaceSubProjectPath: string | null;
   /** Draft ID to open when creating a UI-only workspace draft (from URL) */
   pendingNewWorkspaceDraftId: string | null;
   /** Legacy entry point: open the creation screen (no new draft is created) */
-  beginWorkspaceCreation: (projectPath: string, sectionId?: string) => void;
+  beginWorkspaceCreation: (projectPath: string, subProjectPath?: string) => void;
 
   // UI-only workspace creation drafts (placeholders)
   workspaceDraftsByProject: WorkspaceDraftsByProject;
   createWorkspaceDraft: (
     projectPath: string,
-    sectionId?: string,
+    subProjectPath?: string,
     options?: { replace?: boolean }
   ) => void;
-  updateWorkspaceDraftSection: (
+  updateWorkspaceDraftSubProject: (
     projectPath: string,
     draftId: string,
-    sectionId: string | null
+    subProjectPath: string | null
+  ) => void;
+  openWorkspaceDraft: (
+    projectPath: string,
+    draftId: string,
+    subProjectPath?: string | null
   ) => void;
-  openWorkspaceDraft: (projectPath: string, draftId: string, sectionId?: string | null) => void;
   deleteWorkspaceDraft: (projectPath: string, draftId: string) => void;
 
   // Helpers
@@ -633,7 +637,6 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
     currentProjectPathFromState,
     currentSettingsSection,
     isAnalyticsOpen,
-    pendingSectionId,
     pendingDraftId,
   } = useRouter();
   const location = useLocation();
@@ -719,10 +722,11 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
         return;
       }
 
-      const normalizedSectionId =
-        typeof payload.sectionId === "string" && payload.sectionId.trim().length > 0
-          ? payload.sectionId
-          : null;
+      const resolvedProjectConfig = getProjectConfig(resolvedProjectPath);
+      const owningProjectPath = resolvedProjectConfig?.parentProjectPath ?? resolvedProjectPath;
+      const normalizedSubProjectPath: string | null = resolvedProjectConfig?.parentProjectPath
+        ? resolvedProjectPath
+        : null;
 
       // IMPORTANT: Deep links should always create a fresh draft, even if an existing draft
       // is empty. This keeps deep-link navigations predictable and avoids surprising reuse.
@@ -731,15 +735,15 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
 
       setWorkspaceDraftsByProjectState((prev) => {
         const current = normalizeWorkspaceDraftsByProject(prev);
-        const existing = current[resolvedProjectPath] ?? [];
+        const existing = current[owningProjectPath] ?? [];
 
         return {
           ...current,
-          [resolvedProjectPath]: [
+          [owningProjectPath]: [
             ...existing,
             {
               draftId,
-              sectionId: normalizedSectionId,
+              subProjectPath: normalizedSubProjectPath,
               createdAt,
             },
           ],
@@ -752,16 +756,17 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
           : null;
 
       if (prompt) {
-        updatePersistedState(getInputKey(getDraftScopeId(resolvedProjectPath, draftId)), prompt);
+        updatePersistedState(getInputKey(getDraftScopeId(owningProjectPath, draftId)), prompt);
       }
 
-      navigateToProject(resolvedProjectPath, normalizedSectionId ?? undefined, draftId);
+      navigateToProject(owningProjectPath, draftId);
     },
     [
       api,
       navigateToProject,
       projectsLoading,
       resolveNewChatProjectPath,
+      getProjectConfig,
       hasAnyProject,
       setWorkspaceDraftsByProjectState,
     ]
@@ -862,9 +867,22 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
 
   // pendingNewWorkspaceProject is derived from current project in URL/state
   const pendingNewWorkspaceProject = currentProjectPath;
-  // pendingNewWorkspaceSectionId is derived from section URL param
-  const pendingNewWorkspaceSectionId = pendingSectionId;
   const pendingNewWorkspaceDraftId = pendingNewWorkspaceProject ? pendingDraftId : null;
+  const pendingNewWorkspaceSubProjectPathRaw =
+    pendingNewWorkspaceProject && pendingNewWorkspaceDraftId
+      ? ((workspaceDraftsByProject[pendingNewWorkspaceProject] ?? []).find(
+          (draft) => draft.draftId === pendingNewWorkspaceDraftId
+        )?.subProjectPath ?? null)
+      : null;
+  // Drop the draft's stored sub-project path if the sub-project has since been
+  // removed/unregistered. WorkspaceService.create rejects unknown sub-project
+  // paths under the parent, so leaking a stale value would brick reopening a
+  // legacy draft. Coerce to null and let creation fall back to the parent cwd.
+  const pendingNewWorkspaceSubProjectPath =
+    pendingNewWorkspaceSubProjectPathRaw &&
+    getProjectConfig(pendingNewWorkspaceSubProjectPathRaw) != null
+      ? pendingNewWorkspaceSubProjectPathRaw
+      : null;
 
   // selectedWorkspace is derived from currentWorkspaceId in URL + workspaceMetadata
   const selectedWorkspace = useMemo(() => {
@@ -1531,19 +1549,21 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
     []
   );
   const beginWorkspaceCreation = useCallback(
-    (projectPath: string, sectionId?: string) => {
-      navigateToProject(projectPath, sectionId);
+    (projectPath: string, _subProjectPath?: string) => {
+      navigateToProject(projectPath);
     },
     [navigateToProject]
   );
-  // Persist section selection + URL updates so draft section switches stick across navigation.
-  const updateWorkspaceDraftSection = useCallback(
-    (projectPath: string, draftId: string, sectionId: string | null) => {
+  // Persist sub-project selection + URL updates so draft sub-project switches stick across navigation.
+  const updateWorkspaceDraftSubProject = useCallback(
+    (projectPath: string, draftId: string, subProjectPath: string | null) => {
       if (projectPath.trim().length === 0) return;
       if (draftId.trim().length === 0) return;
 
-      const normalizedSectionId =
-        typeof sectionId === "string" && sectionId.trim().length > 0 ? sectionId : null;
+      const normalizedSubProjectPath =
+        typeof subProjectPath === "string" && subProjectPath.trim().length > 0
+          ? subProjectPath
+          : null;
 
       setWorkspaceDraftsByProjectState((prev) => {
         const current = normalizeWorkspaceDraftsByProject(prev);
@@ -1557,13 +1577,13 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
           if (draft.draftId !== draftId) {
             return draft;
           }
-          if (draft.sectionId === normalizedSectionId) {
+          if (draft.subProjectPath === normalizedSubProjectPath) {
             return draft;
           }
           didUpdate = true;
           return {
             ...draft,
-            sectionId: normalizedSectionId,
+            subProjectPath: normalizedSubProjectPath,
           };
         });
 
@@ -1577,13 +1597,13 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
         };
       });
 
-      navigateToProject(projectPath, normalizedSectionId ?? undefined, draftId);
+      navigateToProject(projectPath, draftId);
     },
     [navigateToProject, setWorkspaceDraftsByProjectState]
   );
 
   const createWorkspaceDraft = useCallback(
-    (projectPath: string, sectionId?: string, options?: { replace?: boolean }) => {
+    (projectPath: string, subProjectPath?: string, options?: { replace?: boolean }) => {
       // Read directly from localStorage to get the freshest value, avoiding stale closure issues.
       // The React state (workspaceDraftsByProject) may be out of date if this is called rapidly.
       const freshDrafts = normalizeWorkspaceDraftsByProject(
@@ -1591,11 +1611,15 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
       );
       const existingDrafts = freshDrafts[projectPath] ?? [];
 
-      // If there's an existing empty draft (optionally in the same section), reuse it
+      // If there's an existing empty draft (optionally in the same sub-project), reuse it
       // instead of creating yet another empty draft.
-      const existingEmptyDraftId = findExistingEmptyDraft(existingDrafts, projectPath, sectionId);
+      const existingEmptyDraftId = findExistingEmptyDraft(
+        existingDrafts,
+        projectPath,
+        subProjectPath
+      );
       if (existingEmptyDraftId) {
-        navigateToProject(projectPath, sectionId, existingEmptyDraftId, {
+        navigateToProject(projectPath, existingEmptyDraftId, {
           replace: options?.replace,
         });
         return;
@@ -1605,7 +1629,7 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
       const createdAt = Date.now();
       const draft: WorkspaceDraft = {
         draftId,
-        sectionId: sectionId ?? null,
+        subProjectPath: subProjectPath ?? null,
         createdAt,
       };
 
@@ -1635,7 +1659,7 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
         };
       });
 
-      navigateToProject(projectPath, sectionId, draftId, { replace: options?.replace });
+      navigateToProject(projectPath, draftId, { replace: options?.replace });
     },
     [navigateToProject, setWorkspaceDraftsByProjectState]
   );
@@ -1679,7 +1703,7 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
         return;
       }
 
-      navigateToProject(fallbackProjectPath, undefined, undefined, { replace: true });
+      navigateToProject(fallbackProjectPath, undefined, { replace: true });
     };
 
     void resolveStartupRootRoute();
@@ -1708,14 +1732,12 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
     const fallbackProjectPath = resolveFallbackProjectPath();
     if (!fallbackProjectPath) return;
 
-    navigateToProject(fallbackProjectPath, undefined, undefined, { replace: true });
+    navigateToProject(fallbackProjectPath, undefined, { replace: true });
   }, [loading, projectsLoading, location.pathname, resolveFallbackProjectPath, navigateToProject]);
 
   const openWorkspaceDraft = useCallback(
-    (projectPath: string, draftId: string, sectionId?: string | null) => {
-      const normalizedSectionId =
-        typeof sectionId === "string" && sectionId.trim().length > 0 ? sectionId : undefined;
-      navigateToProject(projectPath, normalizedSectionId, draftId);
+    (projectPath: string, draftId: string, _subProjectPath?: string | null) => {
+      navigateToProject(projectPath, draftId);
     },
     [navigateToProject]
   );
@@ -1779,14 +1801,14 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
       selectedWorkspace,
       setSelectedWorkspace,
       pendingNewWorkspaceProject,
-      pendingNewWorkspaceSectionId,
+      pendingNewWorkspaceSubProjectPath,
       pendingNewWorkspaceDraftId,
       beginWorkspaceCreation,
       workspaceDraftsByProject,
       workspaceDraftPromotionsByProject,
       promoteWorkspaceDraft,
       createWorkspaceDraft,
-      updateWorkspaceDraftSection,
+      updateWorkspaceDraftSubProject,
       openWorkspaceDraft,
       deleteWorkspaceDraft,
       getWorkspaceInfo,
@@ -1803,14 +1825,14 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
       selectedWorkspace,
       setSelectedWorkspace,
       pendingNewWorkspaceProject,
-      pendingNewWorkspaceSectionId,
+      pendingNewWorkspaceSubProjectPath,
       pendingNewWorkspaceDraftId,
       beginWorkspaceCreation,
       workspaceDraftsByProject,
       workspaceDraftPromotionsByProject,
       promoteWorkspaceDraft,
       createWorkspaceDraft,
-      updateWorkspaceDraftSection,
+      updateWorkspaceDraftSubProject,
       openWorkspaceDraft,
       deleteWorkspaceDraft,
       getWorkspaceInfo,
diff --git a/src/browser/features/ChatInput/CreationControls.tsx b/src/browser/features/ChatInput/CreationControls.tsx
index db4751f3d8..28158756ab 100644
--- a/src/browser/features/ChatInput/CreationControls.tsx
+++ b/src/browser/features/ChatInput/CreationControls.tsx
@@ -20,9 +20,9 @@ import {
   SelectTrigger,
   SelectValue,
 } from "@/browser/components/SelectPrimitive/SelectPrimitive";
-import { Blocks, Cog, GitBranch, Loader2, Wand2, X } from "lucide-react";
-import { PlatformPaths } from "@/common/utils/paths";
+import { Blocks, Cog, GitBranch, Loader2, Wand2 } from "lucide-react";
 import { useProjectContext } from "@/browser/contexts/ProjectContext";
+import { formatProjectHierarchyLabel } from "@/common/utils/subProjects";
 import { useSettings } from "@/browser/contexts/SettingsContext";
 import { useWorkspaceContext } from "@/browser/contexts/WorkspaceContext";
 import { RuntimeConfigInput } from "@/browser/components/RuntimeConfigInput/RuntimeConfigInput";
@@ -40,8 +40,6 @@ import {
 
 import type { WorkspaceNameState, WorkspaceNameUIError } from "@/browser/hooks/useWorkspaceName";
 import type { CoderInfo } from "@/common/orpc/schemas/coder";
-import type { SectionConfig } from "@/common/types/project";
-import { resolveSectionColor } from "@/common/constants/ui";
 import {
   CoderAvailabilityMessage,
   CoderWorkspaceForm,
@@ -118,8 +116,16 @@ interface CreationControlsProps {
   onSelectedRuntimeChange: (runtime: ParsedRuntime) => void;
   onSetDefaultRuntime: (mode: RuntimeChoice) => void;
   disabled: boolean;
-  /** Project path to display (and used for project selector) */
+  /** Owning project path used for runtime/settings scoping (always the parent). */
   projectPath: string;
+  /**
+   * Path of the project actually selected by the user. May be a sub-project
+   * even when {@link projectPath} is its parent, since workspace creation is
+   * always owned by the top-level parent. Used for the dropdown's selected
+   * value/label so sub-projects render correctly. Falls back to
+   * {@link projectPath} when omitted.
+   */
+  selectedProjectPath?: string;
   /** Project name to display as header */
   projectName: string;
   /** Workspace name/title generation state and actions */
@@ -128,12 +134,6 @@ interface CreationControlsProps {
   runtimeAvailabilityState: RuntimeAvailabilityState;
   /** Runtime enablement toggles from Settings (hide disabled runtimes). */
   runtimeEnablement?: RuntimeEnablement;
-  /** Available sections for this project */
-  sections?: SectionConfig[];
-  /** Currently selected section ID */
-  selectedSectionId?: string | null;
-  /** Callback when section selection changes */
-  onSectionChange?: (sectionId: string | null) => void;
   /** Which runtime field (if any) is in error state for visual feedback */
   runtimeFieldError?: "docker" | "ssh" | null;
 
@@ -321,113 +321,6 @@ const resolveRuntimeButtonState = (
   };
 };
 
-/** Aesthetic section picker with color accent */
-interface SectionPickerProps {
-  sections: SectionConfig[];
-  selectedSectionId: string | null;
-  onSectionChange: (sectionId: string | null) => void;
-  disabled?: boolean;
-}
-
-function SectionSelectItem(props: { section: SectionConfig }) {
-  const color = resolveSectionColor(props.section.color);
-
-  return (
-    <SelectPrimitive.Item
-      value={props.section.id}
-      className="hover:bg-hover focus:bg-hover flex cursor-default items-center gap-2.5 rounded-sm px-3 py-1.5 text-sm font-medium outline-none select-none data-[disabled]:pointer-events-none data-[disabled]:opacity-50"
-    >
-      <span className="size-2.5 shrink-0 rounded-full" style={{ backgroundColor: color }} />
-      <SelectPrimitive.ItemText>{props.section.name}</SelectPrimitive.ItemText>
-    </SelectPrimitive.Item>
-  );
-}
-
-function SectionPicker(props: SectionPickerProps) {
-  const { sections, selectedSectionId, onSectionChange, disabled } = props;
-
-  // Radix Select treats `""` as an "unselected" value; normalize any accidental
-  // empty-string IDs back to null so the UI stays consistent.
-  const normalizedSelectedSectionId =
-    selectedSectionId && selectedSectionId.trim().length > 0 ? selectedSectionId : null;
-
-  const selectedSection = normalizedSelectedSectionId
-    ? sections.find((s) => s.id === normalizedSelectedSectionId)
-    : null;
-  const sectionColor = resolveSectionColor(selectedSection?.color);
-
-  return (
-    <div
-      className="relative inline-flex items-center"
-      data-testid="section-selector"
-      data-selected-section={normalizedSelectedSectionId ?? ""}
-    >
-      <RadixSelect
-        value={normalizedSelectedSectionId ?? ""}
-        onValueChange={(value: string) => onSectionChange(value.trim() ? value : null)}
-        disabled={disabled}
-      >
-        {/* Trigger IS the full pill so Radix aligns the dropdown to it. */}
-        <SelectTrigger
-          className={cn(
-            "inline-flex h-auto w-auto items-center gap-2.5 rounded-md border bg-transparent py-1.5 pl-3 text-sm font-medium shadow-none transition-colors focus:ring-0",
-            normalizedSelectedSectionId ? "pr-8" : "pr-3",
-            selectedSection ? "text-foreground" : "text-muted"
-          )}
-          style={{
-            borderColor: selectedSection ? sectionColor : "var(--color-border-medium)",
-            borderLeftWidth: selectedSection ? "3px" : "1px",
-            backgroundColor: selectedSection ? `${sectionColor}08` : "transparent",
-          }}
-        >
-          {/* Color indicator dot */}
-          <div
-            className="size-2.5 shrink-0 rounded-full transition-colors"
-            style={{
-              backgroundColor: selectedSection ? sectionColor : "var(--color-muted)",
-              opacity: selectedSection ? 1 : 0.4,
-            }}
-          />
-          <span className="text-muted-foreground shrink-0 text-xs">Section</span>
-          <SelectValue placeholder="Select..." />
-        </SelectTrigger>
-        <SelectContent className="border-border-medium">
-          {sections.map((section) => (
-            <SectionSelectItem key={section.id} section={section} />
-          ))}
-        </SelectContent>
-      </RadixSelect>
-      {/* Clear button is a sibling (not nested in the trigger) to avoid
-          nesting interactive elements. Absolutely positioned over the
-          right padding reserved by the trigger's pr-8. */}
-      {normalizedSelectedSectionId && (
-        <Tooltip>
-          <TooltipTrigger asChild>
-            <button
-              type="button"
-              aria-label="Clear section selection"
-              disabled={disabled}
-              onClick={(e) => {
-                e.preventDefault();
-                e.stopPropagation();
-                onSectionChange(null);
-              }}
-              className={cn(
-                "text-muted hover:text-error absolute right-1.5 top-1/2 -translate-y-1/2 inline-flex size-5 items-center justify-center rounded-sm transition-colors",
-                "focus-visible:outline-none focus-visible:ring-1 focus-visible:ring-accent",
-                "disabled:pointer-events-none disabled:opacity-50"
-              )}
-            >
-              <X className="h-3 w-3" />
-            </button>
-          </TooltipTrigger>
-          <TooltipContent>Clear section</TooltipContent>
-        </Tooltip>
-      )}
-    </div>
-  );
-}
-
 export function RuntimeButtonGroup(props: RuntimeButtonGroupProps) {
   const state = props.runtimeAvailabilityState;
   const availabilityMap = state?.status === "loaded" ? state.data : null;
@@ -840,41 +733,54 @@ export function CreationControls(props: CreationControlsProps) {
         className={cn("flex gap-y-2", nameState.error ? "items-start" : "items-center")}
         data-component="WorkspaceNameGroup"
       >
-        {userProjects.size > 1 ? (
-          <RadixSelect
-            value={props.projectPath}
-            onValueChange={(path: string) => beginWorkspaceCreation(path)}
-          >
+        {(() => {
+          // Reflect the actual project the user picked (possibly a sub-project)
+          // even though workspace creation is owned by the parent — otherwise
+          // selecting "gbot/bbot" would show "gbot" because props.projectPath
+          // is normalized to the owning parent for runtime/config scoping.
+          const selected = props.selectedProjectPath ?? props.projectPath;
+          const selectedLabel = formatProjectHierarchyLabel(selected, userProjects);
+          return userProjects.size > 1 ? (
+            <RadixSelect
+              value={selected}
+              onValueChange={(path: string) => beginWorkspaceCreation(path)}
+            >
+              <Tooltip>
+                <TooltipTrigger asChild>
+                  <SelectTrigger
+                    aria-label="Select project"
+                    data-testid="project-selector"
+                    className="text-foreground hover:bg-toggle-bg/70 h-7 w-auto max-w-[280px] shrink-0 border-transparent bg-transparent px-0 text-lg font-semibold shadow-none"
+                  >
+                    {/*
+                     * Render the hierarchy label as the explicit child instead of
+                     * relying on Radix's <SelectValue/> mirror of the matched
+                     * <SelectItem/> text. This keeps the trigger label in sync
+                     * with the SelectItem labels (which also use the hierarchy
+                     * label) and avoids fallbacks to bare basenames.
+                     */}
+                    <SelectValue placeholder={selectedLabel}>{selectedLabel}</SelectValue>
+                  </SelectTrigger>
+                </TooltipTrigger>
+                <TooltipContent align="start">{selected}</TooltipContent>
+              </Tooltip>
+              <SelectContent>
+                {Array.from(userProjects.keys()).map((path) => (
+                  <SelectItem key={path} value={path}>
+                    {formatProjectHierarchyLabel(path, userProjects)}
+                  </SelectItem>
+                ))}
+              </SelectContent>
+            </RadixSelect>
+          ) : (
             <Tooltip>
               <TooltipTrigger asChild>
-                <SelectTrigger
-                  aria-label="Select project"
-                  data-testid="project-selector"
-                  className="text-foreground hover:bg-toggle-bg/70 h-7 w-auto max-w-[280px] shrink-0 border-transparent bg-transparent px-0 text-lg font-semibold shadow-none"
-                >
-                  <SelectValue placeholder={props.projectName} />
-                </SelectTrigger>
+                <h2 className="text-foreground shrink-0 text-lg font-semibold">{selectedLabel}</h2>
               </TooltipTrigger>
-              <TooltipContent align="start">{props.projectPath}</TooltipContent>
+              <TooltipContent align="start">{selected}</TooltipContent>
             </Tooltip>
-            <SelectContent>
-              {Array.from(userProjects.keys()).map((path) => (
-                <SelectItem key={path} value={path}>
-                  {PlatformPaths.basename(path)}
-                </SelectItem>
-              ))}
-            </SelectContent>
-          </RadixSelect>
-        ) : (
-          <Tooltip>
-            <TooltipTrigger asChild>
-              <h2 className="text-foreground shrink-0 text-lg font-semibold">
-                {props.projectName}
-              </h2>
-            </TooltipTrigger>
-            <TooltipContent align="start">{props.projectPath}</TooltipContent>
-          </Tooltip>
-        )}
+          );
+        })()}
         <span className="text-muted-foreground mx-2 text-lg">/</span>
 
         {/* Keep generation errors stacked with the name field so remediation appears directly below it. */}
@@ -939,35 +845,8 @@ export function CreationControls(props: CreationControlsProps) {
           </div>
           {nameState.error && <NameErrorDisplay error={nameState.error} />}
         </div>
-
-        {/* Section selector - inline on desktop, hidden on mobile (shown separately below) */}
-        {props.sections && props.sections.length > 0 && props.onSectionChange && (
-          <>
-            <div className="hidden flex-1 md:block" />
-            <div className="hidden md:block">
-              <SectionPicker
-                sections={props.sections}
-                selectedSectionId={props.selectedSectionId ?? null}
-                onSectionChange={props.onSectionChange}
-                disabled={props.disabled}
-              />
-            </div>
-          </>
-        )}
       </div>
 
-      {/* Section selector - own row on mobile only, hidden on desktop */}
-      {props.sections && props.sections.length > 0 && props.onSectionChange && (
-        <div className="md:hidden">
-          <SectionPicker
-            sections={props.sections}
-            selectedSectionId={props.selectedSectionId ?? null}
-            onSectionChange={props.onSectionChange}
-            disabled={props.disabled}
-          />
-        </div>
-      )}
-
       {/* Runtime and source branch controls */}
       <div className="flex flex-col gap-1.5" data-component="RuntimeTypeGroup">
         <div className="flex flex-wrap items-end gap-x-3 gap-y-2">
diff --git a/src/browser/features/ChatInput/index.tsx b/src/browser/features/ChatInput/index.tsx
index 07804aada5..f3864b8c50 100644
--- a/src/browser/features/ChatInput/index.tsx
+++ b/src/browser/features/ChatInput/index.tsx
@@ -191,8 +191,16 @@ const ChatInputInner: React.FC<ChatInputProps> = (props) => {
     [effectivePolicy]
   );
   const { variant } = props;
-  const creationProjectPath = variant === "creation" ? props.projectPath : "";
-  const creationDraftId = variant === "creation" ? props.pendingDraftId : null;
+  const { userProjects } = useProjectContext();
+  const creationProject = variant === "creation" ? userProjects.get(props.projectPath) : undefined;
+  const creationParentProjectPath =
+    variant === "creation" ? (creationProject?.parentProjectPath ?? props.projectPath) : "";
+  const creationSubProjectPath =
+    variant === "creation"
+      ? (props.pendingSubProjectPath ??
+        (creationProject?.parentProjectPath ? props.projectPath : undefined))
+      : undefined;
+  const creationProjectPath = creationParentProjectPath;
   const [thinkingLevel] = useThinkingLevel();
   const atMentionProjectPath = variant === "creation" ? props.projectPath : null;
   const workspaceId = variant === "workspace" ? props.workspaceId : null;
@@ -247,12 +255,12 @@ const ChatInputInner: React.FC<ChatInputProps> = (props) => {
     if (variant === "creation") {
       const pendingScopeId =
         typeof props.pendingDraftId === "string" && props.pendingDraftId.trim().length > 0
-          ? getDraftScopeId(props.projectPath, props.pendingDraftId)
-          : getPendingScopeId(props.projectPath);
+          ? getDraftScopeId(creationParentProjectPath, props.pendingDraftId)
+          : getPendingScopeId(creationParentProjectPath);
       return {
         inputKey: getInputKey(pendingScopeId),
         attachmentsKey: getInputAttachmentsKey(pendingScopeId),
-        modelKey: getModelKey(getProjectScopeId(props.projectPath)),
+        modelKey: getModelKey(getProjectScopeId(creationParentProjectPath)),
       };
     }
     return {
@@ -521,8 +529,7 @@ const ChatInputInner: React.FC<ChatInputProps> = (props) => {
   const preEditDraftRef = useRef<DraftState>({ text: "", attachments: [] });
   const preEditReviewsRef = useRef<ReviewNoteDataForDisplay[] | null>(null);
   const { open } = useSettings();
-  const { selectedWorkspace, beginWorkspaceCreation, updateWorkspaceDraftSection } =
-    useWorkspaceContext();
+  const { selectedWorkspace } = useWorkspaceContext();
   const { agentId, currentAgent } = useAgent();
 
   // Use current agent's uiColor, or neutral border until agents load
@@ -594,7 +601,7 @@ const ChatInputInner: React.FC<ChatInputProps> = (props) => {
   // Get current send message options from shared hook (must be at component top level)
   // For creation variant, use project-scoped key; for workspace, use workspace ID
   const sendMessageOptions = useSendMessageOptions(
-    variant === "workspace" ? props.workspaceId : getProjectScopeId(props.projectPath)
+    variant === "workspace" ? props.workspaceId : getProjectScopeId(creationProjectPath)
   );
   // Extract models for convenience (don't create separate state - use hook as single source of truth)
   // - preferredModel: selected model used for backend routing, preserving explicit gateway choices
@@ -734,10 +741,6 @@ const ChatInputInner: React.FC<ChatInputProps> = (props) => {
   const openModelSelector = useCallback(() => {
     modelSelectorRef.current?.open();
   }, []);
-  // Section selection state for creation variant (must be before useCreationWorkspace)
-  const { userProjects } = useProjectContext();
-  const pendingSectionId = variant === "creation" ? (props.pendingSectionId ?? null) : null;
-  const creationProject = variant === "creation" ? userProjects.get(props.projectPath) : undefined;
   const hasCreationRuntimeOverrides =
     creationProject?.runtimeOverridesEnabled === true ||
     Boolean(creationProject?.runtimeEnablement) ||
@@ -747,75 +750,17 @@ const ChatInputInner: React.FC<ChatInputProps> = (props) => {
     variant === "creation" && hasCreationRuntimeOverrides
       ? normalizeRuntimeEnablement(creationProject?.runtimeEnablement)
       : runtimeEnablement;
-  const creationSections = creationProject?.sections ?? [];
-
-  const [selectedSectionId, setSelectedSectionId] = useState<string | null>(() => pendingSectionId);
   const [hasAttemptedCreateSend, setHasAttemptedCreateSend] = useState(false);
 
-  // Keep local selection in sync with the URL-driven pending section (sidebar "+" button).
-  useEffect(() => {
-    if (variant !== "creation") {
-      return;
-    }
-
-    setSelectedSectionId(pendingSectionId);
-  }, [pendingSectionId, variant]);
-
-  // If the section disappears (e.g. deleted in another window), avoid creating a workspace
-  // with a dangling sectionId.
-  useEffect(() => {
-    if (variant !== "creation") {
-      return;
-    }
-
-    if (!creationProject || !selectedSectionId) {
-      return;
-    }
-
-    const stillExists = (creationProject.sections ?? []).some(
-      (section) => section.id === selectedSectionId
-    );
-    if (!stillExists) {
-      setSelectedSectionId(null);
-    }
-  }, [creationProject, selectedSectionId, variant]);
-
-  const handleCreationSectionChange = useCallback(
-    (sectionId: string | null) => {
-      setSelectedSectionId(sectionId);
-
-      if (variant !== "creation") {
-        return;
-      }
-
-      if (typeof creationDraftId === "string" && creationDraftId.trim().length > 0) {
-        updateWorkspaceDraftSection(creationProjectPath, creationDraftId, sectionId);
-        return;
-      }
-
-      beginWorkspaceCreation(
-        creationProjectPath,
-        typeof sectionId === "string" && sectionId.trim().length > 0 ? sectionId : undefined
-      );
-    },
-    [
-      beginWorkspaceCreation,
-      creationDraftId,
-      creationProjectPath,
-      updateWorkspaceDraftSection,
-      variant,
-    ]
-  );
-
   // Creation-specific state (hook always called, but only used when variant === "creation")
   // This avoids conditional hook calls which violate React rules
   const creationState = useCreationWorkspace(
     variant === "creation"
       ? {
-          projectPath: props.projectPath,
+          projectPath: creationParentProjectPath,
+          subProjectPath: creationSubProjectPath,
           onWorkspaceCreated: props.onWorkspaceCreated,
           message: input,
-          sectionId: selectedSectionId,
           draftId: props.pendingDraftId,
           userModel: preferredModel,
         }
@@ -886,14 +831,19 @@ const ChatInputInner: React.FC<ChatInputProps> = (props) => {
           onSelectedRuntimeChange: creationState.setSelectedRuntime,
           onSetDefaultRuntime: creationState.setDefaultRuntimeChoice,
           disabled: isSendInFlight,
-          projectPath: props.projectPath,
+          projectPath: creationParentProjectPath || props.projectPath,
+          // Surface the actually-targeted project (possibly a sub-project) to
+          // the dropdown so the trigger label reflects what the user picked,
+          // while runtime/settings scoping stays on the parent above. When
+          // creating from the sidebar's "+ New chat" on a sub-project header,
+          // the URL/route is the parent project and the sub-project comes via
+          // the draft (pendingSubProjectPath / creationSubProjectPath); both
+          // routes (deep link to a sub-project, or sidebar "+") collapse here.
+          selectedProjectPath: creationSubProjectPath ?? props.projectPath,
           projectName: props.projectName,
           nameState: creationState.nameState,
           runtimeAvailabilityState: creationState.runtimeAvailabilityState,
           runtimeEnablement: creationRuntimeEnablement,
-          sections: creationSections,
-          selectedSectionId,
-          onSectionChange: handleCreationSectionChange,
           allowedRuntimeModes: runtimePolicy.allowedModes,
           allowSshHost: runtimePolicy.allowSshHost,
           allowSshCoder: runtimePolicy.allowSshCoder,
diff --git a/src/browser/features/ChatInput/types.ts b/src/browser/features/ChatInput/types.ts
index b91e0f20ec..dc81b5166f 100644
--- a/src/browser/features/ChatInput/types.ts
+++ b/src/browser/features/ChatInput/types.ts
@@ -64,8 +64,8 @@ export interface ChatInputCreationVariant {
   variant: "creation";
   projectPath: string;
   projectName: string;
-  /** Section ID to pre-select (from sidebar section "+" button) */
-  pendingSectionId?: string | null;
+  /** Sub-project path for parent-owned draft creation. */
+  pendingSubProjectPath?: string | null;
   /** Draft ID for UI-only workspace creation drafts (from URL) */
   pendingDraftId?: string | null;
   onWorkspaceCreated: (
diff --git a/src/browser/features/ChatInput/useCreationWorkspace.ts b/src/browser/features/ChatInput/useCreationWorkspace.ts
index c17d9da15c..ec6462e477 100644
--- a/src/browser/features/ChatInput/useCreationWorkspace.ts
+++ b/src/browser/features/ChatInput/useCreationWorkspace.ts
@@ -67,8 +67,8 @@ interface UseCreationWorkspaceOptions {
   ) => void;
   /** Current message input for name generation */
   message: string;
-  /** Section ID to assign the new workspace to */
-  sectionId?: string | null;
+  /** Sub-project path to use for cwd and AGENTS.md context. */
+  subProjectPath?: string | null;
   /** Draft ID for UI-only workspace creation drafts (from URL) */
   draftId?: string | null;
   /** User's currently selected model (for name generation fallback) */
@@ -207,7 +207,7 @@ export function useCreationWorkspace({
   projectPath,
   onWorkspaceCreated,
   message,
-  sectionId,
+  subProjectPath,
   draftId,
   userModel,
 }: UseCreationWorkspaceOptions): UseCreationWorkspaceReturn {
@@ -495,7 +495,7 @@ export function useCreationWorkspace({
           trunkBranch: settings.trunkBranch,
           title: createTitle,
           runtimeConfig,
-          sectionId: sectionId ?? undefined,
+          subProjectPath: subProjectPath ?? undefined,
         });
 
         if (!createResult.success) {
@@ -644,7 +644,7 @@ export function useCreationWorkspace({
       waitForGeneration,
       workspaceNameState.autoGenerate,
       workspaceNameState.name,
-      sectionId,
+      subProjectPath,
       draftId,
       promoteWorkspaceDraft,
       deleteWorkspaceDraft,
diff --git a/src/browser/stories/App.phoneViewports.stories.tsx b/src/browser/stories/App.phoneViewports.stories.tsx
index ed01580ad0..3ecf6670e0 100644
--- a/src/browser/stories/App.phoneViewports.stories.tsx
+++ b/src/browser/stories/App.phoneViewports.stories.tsx
@@ -248,7 +248,7 @@ export const IPhone16eSidebarWithSections: AppStory = {
     <AppWithMocks
       setup={() => {
         const projectPath = "/home/user/projects/my-app";
-        const sectionId = "sec00001";
+        const sectionId = `${projectPath}/features`;
 
         const workspaces = [
           createWorkspace({
@@ -264,7 +264,7 @@ export const IPhone16eSidebarWithSections: AppStory = {
               projectName: "my-app",
               projectPath,
             }),
-            sectionId,
+            subProjectPath: sectionId,
           },
           {
             ...createWorkspace({
@@ -273,16 +273,17 @@ export const IPhone16eSidebarWithSections: AppStory = {
               projectName: "my-app",
               projectPath,
             }),
-            sectionId,
+            subProjectPath: sectionId,
           },
         ];
 
-        // Build project config with a custom section
+        // Build project config with a nested sub-project.
         const projects = groupWorkspacesByProject(workspaces);
-        const projectConfig = projects.get(projectPath)!;
-        projects.set(projectPath, {
-          ...projectConfig,
-          sections: [{ id: sectionId, name: "Features", color: "#6366f1", nextId: null }],
+        projects.set(sectionId, {
+          displayName: "Features",
+          color: "#6366f1",
+          parentProjectPath: projectPath,
+          workspaces: [],
         });
 
         // Sidebar open with no workspace selected so the sidebar content is visible
@@ -308,17 +309,20 @@ export const IPhone16eSidebarWithSections: AppStory = {
     },
   },
   play: async ({ canvasElement }) => {
+    const projectPath = "/home/user/projects/my-app";
     // No workspace is selected so there's no ChatInput to wait for;
     // skip stabilizePhoneViewportStory and wait for the section directly.
     await waitFor(
       () => {
-        const sectionHeader = canvasElement.querySelector('[data-section-id="sec00001"]');
-        if (!sectionHeader) throw new Error("Section header not found");
+        const sectionHeader = canvasElement.querySelector(
+          `[data-section-id="${projectPath}/features"]`
+        );
+        if (!sectionHeader) throw new Error("Sub-project header not found");
         // Verify the section header action buttons are in the DOM.
         // The actual visibility assertion (opacity via CSS media query) is
         // validated by the Chromatic snapshot in touch mode — the Storybook
         // test runner doesn't emulate pointer:coarse media queries.
-        within(sectionHeader as HTMLElement).getByLabelText("New chat in section");
+        within(sectionHeader as HTMLElement).getByLabelText("New chat in sub-project");
       },
       { timeout: 10_000 }
     );
diff --git a/src/browser/stories/helpers/drafts.ts b/src/browser/stories/helpers/drafts.ts
index 6998ad83cf..0aad309d58 100644
--- a/src/browser/stories/helpers/drafts.ts
+++ b/src/browser/stories/helpers/drafts.ts
@@ -10,8 +10,8 @@ import {
 // ═══════════════════════════════════════════════════════════════════════════════
 export interface WorkspaceDraftFixture {
   draftId: string;
-  /** Optional: section ID the draft belongs to */
-  sectionId?: string | null;
+  /** Optional: sub-project path the draft belongs to */
+  subProjectPath?: string | null;
   /** Optional: draft prompt text */
   prompt?: string;
   /** Optional: workspace name (either manual or generated) */
@@ -28,11 +28,14 @@ export function setWorkspaceDrafts(projectPath: string, drafts: WorkspaceDraftFi
   // Set the drafts index
   const draftsByProject = JSON.parse(
     localStorage.getItem(WORKSPACE_DRAFTS_BY_PROJECT_KEY) ?? "{}"
-  ) as Record<string, Array<{ draftId: string; sectionId?: string | null; createdAt?: number }>>;
+  ) as Record<
+    string,
+    Array<{ draftId: string; subProjectPath?: string | null; createdAt?: number }>
+  >;
 
   draftsByProject[projectPath] = drafts.map((d) => ({
     draftId: d.draftId,
-    sectionId: d.sectionId,
+    subProjectPath: d.subProjectPath,
     createdAt: d.createdAt ?? Date.now(),
   }));
 
diff --git a/src/browser/utils/commands/sources.ts b/src/browser/utils/commands/sources.ts
index b678d5ac00..836fbfcdca 100644
--- a/src/browser/utils/commands/sources.ts
+++ b/src/browser/utils/commands/sources.ts
@@ -20,6 +20,7 @@ import {
   getLayoutsConfigOrDefault,
   getPresetForSlot,
 } from "@/browser/utils/uiLayouts";
+import { formatProjectHierarchyLabel } from "@/common/utils/subProjects";
 import type { LayoutPresetsConfig, LayoutSlotNumber } from "@/common/types/uiLayouts";
 import {
   addToolToFocusedTabset,
@@ -943,7 +944,7 @@ export function buildCoreSources(p: BuildSourcesParams): Array<() => CommandActi
               getOptions: (_values) =>
                 Array.from(p.userProjects.keys()).map((projectPath) => ({
                   id: projectPath,
-                  label: projectPath.split("/").pop() ?? projectPath,
+                  label: formatProjectHierarchyLabel(projectPath, p.userProjects),
                   keywords: [projectPath],
                 })),
             },
@@ -983,11 +984,13 @@ export function buildCoreSources(p: BuildSourcesParams): Array<() => CommandActi
               label: "Select project",
               placeholder: "Search projects…",
               getOptions: (_values) =>
-                Array.from(p.userProjects.keys()).map((projectPath) => ({
-                  id: projectPath,
-                  label: projectPath.split("/").pop() ?? projectPath,
-                  keywords: [projectPath],
-                })),
+                Array.from(p.userProjects.entries())
+                  .filter(([, projectConfig]) => !projectConfig.parentProjectPath)
+                  .map(([projectPath]) => ({
+                    id: projectPath,
+                    label: formatProjectHierarchyLabel(projectPath, p.userProjects),
+                    keywords: [projectPath],
+                  })),
             },
           ],
           onSubmit: async (vals) => {
diff --git a/src/browser/utils/ui/workspaceFiltering.test.ts b/src/browser/utils/ui/workspaceFiltering.test.ts
index 89c58ecc83..324c26a894 100644
--- a/src/browser/utils/ui/workspaceFiltering.test.ts
+++ b/src/browser/utils/ui/workspaceFiltering.test.ts
@@ -7,11 +7,9 @@ import {
   computeWorkspaceDepthMap,
   computeAgentRowRenderMeta,
   filterVisibleAgentRows,
-  partitionWorkspacesBySection,
-  sortSectionsByLinkedList,
 } from "./workspaceFiltering";
 import type { FrontendWorkspaceMetadata } from "@/common/types/workspace";
-import type { ProjectConfig, SectionConfig } from "@/common/types/project";
+import type { ProjectConfig } from "@/common/types/project";
 import { DEFAULT_RUNTIME_CONFIG } from "@/common/constants/workspace";
 
 describe("partitionWorkspacesByAge", () => {
@@ -983,143 +981,3 @@ describe("sub-agent row render metadata", () => {
     expect(expandedMeta.get("reported-2")?.connectorPosition).toBe("last");
   });
 });
-
-describe("sortSectionsByLinkedList", () => {
-  it("should sort sections by nextId linked list", () => {
-    const sections: SectionConfig[] = [
-      { id: "c", name: "C", nextId: null },
-      { id: "a", name: "A", nextId: "b" },
-      { id: "b", name: "B", nextId: "c" },
-    ];
-
-    const sorted = sortSectionsByLinkedList(sections);
-    expect(sorted.map((s) => s.id)).toEqual(["a", "b", "c"]);
-  });
-
-  it("should handle empty array", () => {
-    expect(sortSectionsByLinkedList([])).toEqual([]);
-  });
-
-  it("should handle single section", () => {
-    const sections: SectionConfig[] = [{ id: "only", name: "Only", nextId: null }];
-    const sorted = sortSectionsByLinkedList(sections);
-    expect(sorted.map((s) => s.id)).toEqual(["only"]);
-  });
-
-  it("should handle reordered sections (C, A, B order)", () => {
-    // After reorder to C->A->B, the pointers should be: C->A->B->null
-    const sections: SectionConfig[] = [
-      { id: "a", name: "A", nextId: "b" },
-      { id: "b", name: "B", nextId: null },
-      { id: "c", name: "C", nextId: "a" },
-    ];
-
-    const sorted = sortSectionsByLinkedList(sections);
-    expect(sorted.map((s) => s.id)).toEqual(["c", "a", "b"]);
-  });
-
-  it("should append orphaned sections", () => {
-    // Section "orphan" is not in the linked list
-    const sections: SectionConfig[] = [
-      { id: "a", name: "A", nextId: "b" },
-      { id: "b", name: "B", nextId: null },
-      { id: "orphan", name: "Orphan", nextId: "nonexistent" },
-    ];
-
-    const sorted = sortSectionsByLinkedList(sections);
-    expect(sorted.map((s) => s.id)).toEqual(["a", "b", "orphan"]);
-  });
-});
-
-describe("partitionWorkspacesBySection", () => {
-  const createWorkspace = (
-    id: string,
-    sectionId?: string,
-    parentWorkspaceId?: string
-  ): FrontendWorkspaceMetadata => ({
-    id,
-    name: `workspace-${id}`,
-    projectName: "test-project",
-    projectPath: "/test/project",
-    namedWorkspacePath: `/test/project/workspace-${id}`,
-    runtimeConfig: DEFAULT_RUNTIME_CONFIG,
-    sectionId,
-    parentWorkspaceId,
-  });
-
-  it("should partition workspaces by section", () => {
-    const workspaces = [
-      createWorkspace("ws1", "section-a"),
-      createWorkspace("ws2", "section-b"),
-      createWorkspace("ws3"), // unsectioned
-    ];
-    const sections: SectionConfig[] = [
-      { id: "section-a", name: "A" },
-      { id: "section-b", name: "B" },
-    ];
-
-    const result = partitionWorkspacesBySection(workspaces, sections);
-
-    expect(result.unsectioned.map((w: FrontendWorkspaceMetadata) => w.id)).toEqual(["ws3"]);
-    expect(
-      result.bySectionId.get("section-a")?.map((w: FrontendWorkspaceMetadata) => w.id)
-    ).toEqual(["ws1"]);
-    expect(
-      result.bySectionId.get("section-b")?.map((w: FrontendWorkspaceMetadata) => w.id)
-    ).toEqual(["ws2"]);
-  });
-
-  it("should keep child workspaces directly after their parent within a section", () => {
-    // Parent in section-a, child also in section-a
-    // Input order from flattenWorkspaceTree: parent, child (already correct)
-    const workspaces = [
-      createWorkspace("parent", "section-a"),
-      createWorkspace("child", "section-a", "parent"),
-    ];
-    const sections: SectionConfig[] = [{ id: "section-a", name: "A" }];
-
-    const result = partitionWorkspacesBySection(workspaces, sections);
-
-    // Child should be directly after parent
-    expect(
-      result.bySectionId.get("section-a")?.map((w: FrontendWorkspaceMetadata) => w.id)
-    ).toEqual(["parent", "child"]);
-  });
-
-  it("should keep child workspaces with parent even when child has no sectionId (inherits parent section)", () => {
-    // BUG REPRODUCTION: Parent in section-a, child has no sectionId
-    // Child should render under parent in section-a, NOT in unsectioned
-    const workspaces = [
-      createWorkspace("parent", "section-a"),
-      createWorkspace("child", undefined, "parent"), // child without sectionId
-    ];
-    const sections: SectionConfig[] = [{ id: "section-a", name: "A" }];
-
-    const result = partitionWorkspacesBySection(workspaces, sections);
-
-    // Child should inherit parent's section placement
-    expect(
-      result.bySectionId.get("section-a")?.map((w: FrontendWorkspaceMetadata) => w.id)
-    ).toEqual(["parent", "child"]);
-    // Unsectioned should be empty
-    expect(result.unsectioned).toHaveLength(0);
-  });
-
-  it("should handle nested children inheriting section from root parent", () => {
-    // Root in section-a, child1 and grandchild have no sectionId
-    const workspaces = [
-      createWorkspace("root", "section-a"),
-      createWorkspace("child1", undefined, "root"),
-      createWorkspace("grandchild", undefined, "child1"),
-    ];
-    const sections: SectionConfig[] = [{ id: "section-a", name: "A" }];
-
-    const result = partitionWorkspacesBySection(workspaces, sections);
-
-    // All should be in section-a, in tree order
-    expect(
-      result.bySectionId.get("section-a")?.map((w: FrontendWorkspaceMetadata) => w.id)
-    ).toEqual(["root", "child1", "grandchild"]);
-    expect(result.unsectioned).toHaveLength(0);
-  });
-});
diff --git a/src/browser/utils/ui/workspaceFiltering.ts b/src/browser/utils/ui/workspaceFiltering.ts
index 9818e6d11e..6f9decb44e 100644
--- a/src/browser/utils/ui/workspaceFiltering.ts
+++ b/src/browser/utils/ui/workspaceFiltering.ts
@@ -1,10 +1,11 @@
 import type { FrontendWorkspaceMetadata } from "@/common/types/workspace";
-import type { ProjectConfig, SectionConfig } from "@/common/types/project";
+import type { ProjectConfig } from "@/common/types/project";
 import { hasCompletedAgentReport } from "@/common/utils/agentTaskCompletion";
 import { assert } from "@/common/utils/assert";
 
-// Re-export shared section sorting utility
-export { sortSectionsByLinkedList } from "@/common/utils/sections";
+interface WorkspaceGroupConfig {
+  id: string;
+}
 
 function flattenWorkspaceTree(
   workspaces: FrontendWorkspaceMetadata[]
@@ -555,7 +556,7 @@ interface SectionPartitionResult {
  */
 export function partitionWorkspacesBySection(
   workspaces: FrontendWorkspaceMetadata[],
-  sections: SectionConfig[]
+  sections: WorkspaceGroupConfig[]
 ): SectionPartitionResult {
   const sectionIds = new Set(sections.map((s) => s.id));
   const unsectioned: FrontendWorkspaceMetadata[] = [];
@@ -574,8 +575,8 @@ export function partitionWorkspacesBySection(
 
   // Resolve effective section for a workspace (inherit from parent if unset)
   const resolveSection = (workspace: FrontendWorkspaceMetadata): string | undefined => {
-    if (workspace.sectionId && sectionIds.has(workspace.sectionId)) {
-      return workspace.sectionId;
+    if (workspace.subProjectPath && sectionIds.has(workspace.subProjectPath)) {
+      return workspace.subProjectPath;
     }
     // Inherit from parent if child has no section
     if (workspace.parentWorkspaceId) {
diff --git a/src/browser/utils/workspace.ts b/src/browser/utils/workspace.ts
index 378fbfab7e..542a06d602 100644
--- a/src/browser/utils/workspace.ts
+++ b/src/browser/utils/workspace.ts
@@ -22,6 +22,6 @@ export function getWorkspaceSidebarKey(meta: FrontendWorkspaceMetadata): string
     meta.parentWorkspaceId ?? "", // Nested sidebar indentation/order
     meta.taskStatus ?? "", // Task lifecycle label/state for sub-agent rows
     meta.agentType ?? "", // Agent preset badge/label (future)
-    meta.sectionId ?? "", // Section grouping for sidebar organization
+    meta.subProjectPath ?? "", // Sub-project grouping and cwd context for sidebar organization
   ].join("|");
 }
diff --git a/src/common/constants/storage.ts b/src/common/constants/storage.ts
index 1820a046f7..61c7383894 100644
--- a/src/common/constants/storage.ts
+++ b/src/common/constants/storage.ts
@@ -91,7 +91,7 @@ export const EXPANDED_PROJECTS_KEY = "expandedProjects";
 /**
  * LocalStorage key for UI-only workspace creation drafts.
  *
- * Value: Record<string, Array<{ draftId: string; sectionId: string | null; createdAt: number }>>
+ * Value: Record<string, Array<{ draftId: string; subProjectPath: string | null; createdAt: number }>>
  * Keyed by projectPath.
  */
 export const WORKSPACE_DRAFTS_BY_PROJECT_KEY = "workspaceDraftsByProject";
diff --git a/src/common/orpc/schemas.ts b/src/common/orpc/schemas.ts
index 075ad6b490..ae7b2c8d25 100644
--- a/src/common/orpc/schemas.ts
+++ b/src/common/orpc/schemas.ts
@@ -15,7 +15,7 @@ export {
 } from "./schemas/runtime";
 
 // Project schemas
-export { ProjectConfigSchema, SectionConfigSchema, WorkspaceConfigSchema } from "./schemas/project";
+export { ProjectConfigSchema, WorkspaceConfigSchema } from "./schemas/project";
 
 // Workspace schemas
 export { WorkspaceAISettingsSchema } from "./schemas/workspaceAiSettings";
diff --git a/src/common/orpc/schemas/api.ts b/src/common/orpc/schemas/api.ts
index 6e70424a86..cf6669549c 100644
--- a/src/common/orpc/schemas/api.ts
+++ b/src/common/orpc/schemas/api.ts
@@ -12,7 +12,7 @@ import {
   SendMessageErrorSchema,
 } from "./errors";
 import { BranchListResultSchema, FilePartSchema, MuxMessageSchema } from "./message";
-import { ProjectConfigSchema, SectionConfigSchema } from "./project";
+import { ProjectConfigSchema } from "./project";
 import { ResultSchema } from "./result";
 import { SshPromptEventSchema, SshPromptResponseInputSchema } from "./ssh";
 import {
@@ -629,7 +629,7 @@ export const projects = {
     ),
   },
   pickDirectory: {
-    input: z.void(),
+    input: z.object({ initialPath: z.string().nullish() }).nullish(),
     output: z.string().nullable(),
   },
   remove: {
@@ -823,47 +823,12 @@ export const projects = {
       output: ResultSchema(z.void(), z.string()),
     },
   },
-  sections: {
-    list: {
-      input: z.object({ projectPath: z.string() }),
-      output: z.array(SectionConfigSchema),
-    },
-    create: {
-      input: z.object({
-        projectPath: z.string(),
-        name: z.string().min(1),
-        color: z.string().optional(),
-      }),
-      output: ResultSchema(SectionConfigSchema, z.string()),
-    },
-    update: {
-      input: z.object({
-        projectPath: z.string(),
-        sectionId: z.string(),
-        name: z.string().min(1).optional(),
-        color: z.string().optional(),
-      }),
-      output: ResultSchema(z.void(), z.string()),
-    },
-    remove: {
-      input: z.object({
-        projectPath: z.string(),
-        sectionId: z.string(),
-      }),
-      output: ResultSchema(z.void(), z.string()),
-    },
-    reorder: {
-      input: z.object({
-        projectPath: z.string(),
-        sectionIds: z.array(z.string()),
-      }),
-      output: ResultSchema(z.void(), z.string()),
-    },
+  subProjects: {
     assignWorkspace: {
       input: z.object({
         projectPath: z.string(),
         workspaceId: z.string(),
-        sectionId: z.string().nullable(),
+        subProjectPath: z.string().nullable(),
       }),
       output: ResultSchema(z.void(), z.string()),
     },
@@ -1006,8 +971,8 @@ export const workspace = {
       /** Human-readable title (e.g., "Fix plan mode over SSH") - optional for backwards compat */
       title: z.string().optional(),
       runtimeConfig: RuntimeConfigSchema.optional(),
-      /** Section ID to assign the new workspace to (optional) */
-      sectionId: z.string().optional(),
+      /** Sub-project path to use for cwd and AGENTS.md context (optional). */
+      subProjectPath: z.string().optional(),
       /**
        * When true, mark the workspace with `pendingAutoTitle` so the first user
        * message triggers an LLM-generated title (mirrors the /fork flow).
diff --git a/src/common/orpc/schemas/project.ts b/src/common/orpc/schemas/project.ts
index d06f02a51e..aeba5c1a8a 100644
--- a/src/common/orpc/schemas/project.ts
+++ b/src/common/orpc/schemas/project.ts
@@ -1,5 +1 @@
-export {
-  ProjectConfigSchema,
-  SectionConfigSchema,
-  WorkspaceConfigSchema,
-} from "@/common/schemas/project";
+export { ProjectConfigSchema, WorkspaceConfigSchema } from "@/common/schemas/project";
diff --git a/src/common/orpc/schemas/workspace.ts b/src/common/orpc/schemas/workspace.ts
index 28959a8c75..7f1a4326b9 100644
--- a/src/common/orpc/schemas/workspace.ts
+++ b/src/common/orpc/schemas/workspace.ts
@@ -160,8 +160,9 @@ export const WorkspaceMetadataSchema = z.object({
         "When >1 entry, this is a multi-project workspace. " +
         "projectPath/projectName reflect the primary project for backcompat.",
     }),
-  sectionId: z.string().optional().meta({
-    description: "ID of the section this workspace belongs to (optional, unsectioned if absent)",
+  subProjectPath: z.string().optional().meta({
+    description:
+      "Sub-project path that provides cwd and AGENTS.md context while sharing the parent project's worktree.",
   }),
 });
 
diff --git a/src/common/schemas/project.ts b/src/common/schemas/project.ts
index f992614990..fbe2d8f02d 100644
--- a/src/common/schemas/project.ts
+++ b/src/common/schemas/project.ts
@@ -15,25 +15,6 @@ import { z } from "zod";
 import { RuntimeEnablementIdSchema } from "./ids";
 import { RuntimeEnablementOverridesSchema } from "./runtimeEnablement";
 
-/**
- * Section schema for organizing workspaces within a project.
- * Sections are project-scoped and persist to config.json.
- */
-export const SectionConfigSchema = z.object({
-  id: z.string().meta({
-    description: "Unique section ID (8 hex chars)",
-  }),
-  name: z.string().meta({
-    description: "Display name for the section",
-  }),
-  color: z.string().optional().meta({
-    description: "Accent color (hex value like #ff6b6b or preset name)",
-  }),
-  nextId: z.string().nullable().optional().meta({
-    description: "ID of the next section in display order (null = last, undefined treated as null)",
-  }),
-});
-
 export const WorktreeArchiveSnapshotProjectSchema = z.object({
   projectPath: z.string().meta({
     description: "Absolute path to the project repo that this archive snapshot entry restores.",
@@ -183,8 +164,9 @@ export const WorkspaceConfigSchema = z.object({
       "Durable restore metadata captured before archive-time worktree deletion. Present only while an archived snapshot is awaiting restore.",
   }),
   projects: z.array(ProjectRefSchema).optional(),
-  sectionId: z.string().optional().meta({
-    description: "ID of the section this workspace belongs to (optional, unsectioned if absent)",
+  subProjectPath: z.string().optional().meta({
+    description:
+      "Sub-project path that provides cwd and AGENTS.md context while sharing the parent project's worktree.",
   }),
 });
 
@@ -195,10 +177,15 @@ export const ProjectConfigSchema = z.object({
   color: z.string().optional().meta({
     description: "Project folder accent color (hex value like #5a9bd4 or preset name)",
   }),
-  workspaces: z.array(WorkspaceConfigSchema),
-  sections: z.array(SectionConfigSchema).optional().meta({
-    description: "Sections for organizing workspaces within this project",
+  /**
+   * Parent project path when this project is a one-level sub-project. Parentage is
+   * re-derived from registered paths during project load/list so stale persisted
+   * values never become the source of truth.
+   */
+  parentProjectPath: z.string().optional().meta({
+    description: "Absolute path to the top-level parent project for one-level sub-projects",
   }),
+  workspaces: z.array(WorkspaceConfigSchema),
   idleCompactionHours: z.number().min(1).nullable().optional().meta({
     description:
       "Hours of inactivity before auto-compacting workspaces. null/undefined = disabled.",
diff --git a/src/common/types/deepLink.ts b/src/common/types/deepLink.ts
index a68c91c55c..45dcf8d25d 100644
--- a/src/common/types/deepLink.ts
+++ b/src/common/types/deepLink.ts
@@ -19,5 +19,4 @@ export interface MuxDeepLinkPayload {
   projectId?: string;
 
   prompt?: string;
-  sectionId?: string;
 }
diff --git a/src/common/types/project.ts b/src/common/types/project.ts
index ec8853285b..949c9b4f95 100644
--- a/src/common/types/project.ts
+++ b/src/common/types/project.ts
@@ -11,11 +11,7 @@ import type {
   UpdateChannel,
 } from "@/common/config/schemas/appConfigOnDisk";
 import type { z } from "zod";
-import type {
-  ProjectConfigSchema,
-  SectionConfigSchema,
-  WorkspaceConfigSchema,
-} from "../orpc/schemas";
+import type { ProjectConfigSchema, WorkspaceConfigSchema } from "../orpc/schemas";
 import type { AgentAiDefaults } from "./agentAiDefaults";
 import type { RuntimeEnablementId } from "./runtime";
 import type { TaskSettings, SubagentAiDefaults } from "./tasks";
@@ -24,8 +20,6 @@ import type { ThinkingLevel } from "./thinking";
 
 export type Workspace = z.infer<typeof WorkspaceConfigSchema>;
 
-export type SectionConfig = z.infer<typeof SectionConfigSchema>;
-
 export type ProjectConfig = z.infer<typeof ProjectConfigSchema>;
 
 export type { FeatureFlagOverride, UpdateChannel };
diff --git a/src/common/utils/deepLink.test.ts b/src/common/utils/deepLink.test.ts
index 240ce16eaa..ee41dfeec3 100644
--- a/src/common/utils/deepLink.test.ts
+++ b/src/common/utils/deepLink.test.ts
@@ -4,7 +4,7 @@ import { parseMuxDeepLink, resolveProjectPathFromProjectQuery } from "./deepLink
 describe("parseMuxDeepLink", () => {
   test("parses mux://chat/new", () => {
     const payload = parseMuxDeepLink(
-      "mux://chat/new/?project=mux&projectPath=%2Ftmp%2Frepo&projectId=proj_123&prompt=hello%20world&sectionId=sec_456"
+      "mux://chat/new/?project=mux&projectPath=%2Ftmp%2Frepo&projectId=proj_123&prompt=hello%20world"
     );
 
     expect(payload).toEqual({
@@ -13,7 +13,6 @@ describe("parseMuxDeepLink", () => {
       projectPath: "/tmp/repo",
       projectId: "proj_123",
       prompt: "hello world",
-      sectionId: "sec_456",
     });
   });
 
diff --git a/src/common/utils/deepLink.ts b/src/common/utils/deepLink.ts
index 2f8ecf4c18..16323402d3 100644
--- a/src/common/utils/deepLink.ts
+++ b/src/common/utils/deepLink.ts
@@ -36,15 +36,12 @@ export function parseMuxDeepLink(raw: string): MuxDeepLinkPayload | null {
   const projectPath = getNonEmptySearchParam(url, "projectPath");
   const projectId = getNonEmptySearchParam(url, "projectId");
   const prompt = getNonEmptySearchParam(url, "prompt");
-  const sectionId = getNonEmptySearchParam(url, "sectionId");
-
   return {
     type: "new_chat",
     ...(project ? { project } : {}),
     ...(projectPath ? { projectPath } : {}),
     ...(projectId ? { projectId } : {}),
     ...(prompt ? { prompt } : {}),
-    ...(sectionId ? { sectionId } : {}),
   };
 }
 
diff --git a/src/common/utils/sections.ts b/src/common/utils/sections.ts
deleted file mode 100644
index 3617760d8b..0000000000
--- a/src/common/utils/sections.ts
+++ /dev/null
@@ -1,39 +0,0 @@
-import type { SectionConfig } from "@/common/types/project";
-
-/**
- * Sort sections by their linked-list order (nextId pointers).
- *
- * Finds the head (section not referenced by any other's nextId),
- * then follows the chain. Orphaned sections are appended at the end.
- */
-export function sortSectionsByLinkedList(sections: SectionConfig[]): SectionConfig[] {
-  if (sections.length === 0) return [];
-
-  const byId = new Map(sections.map((s) => [s.id, s]));
-
-  // Find head: section not referenced by any other section's nextId
-  const referencedIds = new Set(sections.map((s) => s.nextId).filter(Boolean));
-  const heads = sections.filter((s) => !referencedIds.has(s.id));
-
-  // If no clear head (cycle or empty), fall back to first section
-  const head = heads[0] ?? sections[0];
-
-  const sorted: SectionConfig[] = [];
-  const visited = new Set<string>();
-  let current: SectionConfig | undefined = head;
-
-  while (current && !visited.has(current.id)) {
-    visited.add(current.id);
-    sorted.push(current);
-    current = current.nextId ? byId.get(current.nextId) : undefined;
-  }
-
-  // Append orphaned sections (not in linked list)
-  for (const s of sections) {
-    if (!visited.has(s.id)) {
-      sorted.push(s);
-    }
-  }
-
-  return sorted;
-}
diff --git a/src/common/utils/subProjects.test.ts b/src/common/utils/subProjects.test.ts
new file mode 100644
index 0000000000..72e46110f0
--- /dev/null
+++ b/src/common/utils/subProjects.test.ts
@@ -0,0 +1,75 @@
+import { describe, expect, test } from "bun:test";
+import type { ProjectConfig } from "@/common/types/project";
+import {
+  deriveProjectHierarchy,
+  formatProjectHierarchyLabel,
+  getSubProjectsForParent,
+  isPathDescendant,
+} from "./subProjects";
+
+function project(overrides: Partial<ProjectConfig> = {}): ProjectConfig {
+  return { workspaces: [], ...overrides };
+}
+
+describe("subProjects", () => {
+  test("detects only boundary-safe descendants", () => {
+    expect(isPathDescendant("/repo", "/repo/packages/api")).toBe(true);
+    expect(isPathDescendant("/repo", "/repo-sibling")).toBe(false);
+    expect(isPathDescendant("/repo", "/repo")).toBe(false);
+  });
+
+  test("treats Windows drive-letter paths as case-insensitive", () => {
+    expect(isPathDescendant("C:\\Repo", "c:\\repo\\packages\\api")).toBe(true);
+  });
+
+  test("derives one-level parentage from registered project paths", () => {
+    const projects = new Map<string, ProjectConfig>([
+      ["/repo", project()],
+      ["/repo/packages/api", project()],
+      ["/repo/packages/api/nested", project()],
+    ]);
+
+    const derived = deriveProjectHierarchy(projects);
+
+    expect(derived.get("/repo")?.parentProjectPath).toBeUndefined();
+    expect(derived.get("/repo/packages/api")?.parentProjectPath).toBe("/repo");
+    expect(derived.get("/repo/packages/api/nested")?.parentProjectPath).toBe("/repo");
+  });
+
+  test("clears stale parent pointers for top-level projects", () => {
+    const projects = deriveProjectHierarchy(
+      new Map<string, ProjectConfig>([["/repo", project({ parentProjectPath: "/stale" })]])
+    );
+
+    expect(projects.get("/repo")?.parentProjectPath).toBeUndefined();
+  });
+
+  test("does not depend on insertion order for nested existing paths", () => {
+    const projects = deriveProjectHierarchy(
+      new Map<string, ProjectConfig>([
+        ["/repo", project()],
+        ["/repo/packages/api/nested", project()],
+        ["/repo/packages/api", project()],
+      ])
+    );
+
+    expect(projects.get("/repo/packages/api")?.parentProjectPath).toBe("/repo");
+    expect(projects.get("/repo/packages/api/nested")?.parentProjectPath).toBe("/repo");
+  });
+
+  test("orders sub-projects by display name and labels them with parent context", () => {
+    const projects = deriveProjectHierarchy(
+      new Map<string, ProjectConfig>([
+        ["/repo", project({ displayName: "Mux" })],
+        ["/repo/packages/web", project({ displayName: "Web" })],
+        ["/repo/packages/api", project({ displayName: "API" })],
+      ])
+    );
+
+    expect(getSubProjectsForParent("/repo", projects).map(([path]) => path)).toEqual([
+      "/repo/packages/api",
+      "/repo/packages/web",
+    ]);
+    expect(formatProjectHierarchyLabel("/repo/packages/api", projects)).toBe("Mux / API");
+  });
+});
diff --git a/src/common/utils/subProjects.ts b/src/common/utils/subProjects.ts
new file mode 100644
index 0000000000..dd574438d2
--- /dev/null
+++ b/src/common/utils/subProjects.ts
@@ -0,0 +1,98 @@
+import type { ProjectConfig } from "@/common/types/project";
+import { PlatformPaths } from "@/common/utils/paths";
+
+function normalizeForDescendantComparison(value: string): string {
+  const normalized = value.replace(/\\/g, "/").replace(/\/+$/, "");
+  // Windows paths are case-insensitive, and user input / persisted config can
+  // differ in drive-letter or segment casing. Treat drive-letter paths as
+  // case-insensitive so hierarchy derivation is stable on Windows while POSIX
+  // paths keep their normal case-sensitive semantics.
+  return /^[a-z]:\//i.test(normalized) ? normalized.toLowerCase() : normalized;
+}
+
+export function isPathDescendant(parentPath: string, candidatePath: string): boolean {
+  const parent = normalizeForDescendantComparison(parentPath);
+  const candidate = normalizeForDescendantComparison(candidatePath);
+  return candidate.startsWith(`${parent}/`) && candidate.length > parent.length + 1;
+}
+
+export function getDirectParentProjectPath(
+  projectPath: string,
+  projects: Map<string, ProjectConfig>
+): string | null {
+  const ancestorPaths = Array.from(projects.keys()).filter(
+    (candidatePath) => candidatePath !== projectPath && isPathDescendant(candidatePath, projectPath)
+  );
+
+  const topLevelAncestors = ancestorPaths.filter(
+    (ancestorPath) =>
+      !ancestorPaths.some(
+        (otherAncestorPath) =>
+          otherAncestorPath !== ancestorPath && isPathDescendant(otherAncestorPath, ancestorPath)
+      )
+  );
+
+  return topLevelAncestors.sort((left, right) => right.length - left.length)[0] ?? null;
+}
+
+export function deriveProjectHierarchy(
+  projects: Map<string, ProjectConfig>
+): Map<string, ProjectConfig> {
+  const next = new Map<string, ProjectConfig>();
+  for (const [projectPath, projectConfig] of projects) {
+    next.set(projectPath, { ...projectConfig, parentProjectPath: undefined });
+  }
+
+  for (const [projectPath, projectConfig] of next) {
+    const parentProjectPath = getDirectParentProjectPath(projectPath, next);
+    if (!parentProjectPath) {
+      next.set(projectPath, { ...projectConfig, parentProjectPath: undefined });
+      continue;
+    }
+    next.set(projectPath, { ...projectConfig, parentProjectPath });
+  }
+
+  return next;
+}
+
+export function getTopLevelProjectPath(
+  projectPath: string,
+  projects: Map<string, ProjectConfig>
+): string {
+  return projects.get(projectPath)?.parentProjectPath ?? projectPath;
+}
+
+export function getSubProjectsForParent(
+  parentProjectPath: string,
+  projects: Map<string, ProjectConfig>
+): Array<[string, ProjectConfig]> {
+  return Array.from(projects.entries())
+    .filter(([, projectConfig]) => projectConfig.parentProjectPath === parentProjectPath)
+    .sort((left, right) =>
+      getProjectDisplayName(left[0], left[1]).localeCompare(
+        getProjectDisplayName(right[0], right[1]),
+        undefined,
+        { sensitivity: "base" }
+      )
+    );
+}
+
+export function getProjectDisplayName(projectPath: string, projectConfig?: ProjectConfig): string {
+  const displayName = projectConfig?.displayName?.trim();
+  return displayName && displayName.length > 0
+    ? displayName
+    : PlatformPaths.getProjectName(projectPath);
+}
+
+export function formatProjectHierarchyLabel(
+  projectPath: string,
+  projects: Map<string, ProjectConfig>
+): string {
+  const projectConfig = projects.get(projectPath);
+  const parentProjectPath = projectConfig?.parentProjectPath;
+  const projectName = getProjectDisplayName(projectPath, projectConfig);
+  if (!parentProjectPath) {
+    return projectName;
+  }
+  return `${getProjectDisplayName(parentProjectPath, projects.get(parentProjectPath))} / ${projectName}`;
+}
diff --git a/src/desktop/main.ts b/src/desktop/main.ts
index 56efe582e1..8f384e722d 100644
--- a/src/desktop/main.ts
+++ b/src/desktop/main.ts
@@ -5,6 +5,7 @@ process.umask(0o077);
 // Enable source map support for better error stack traces in production
 import "source-map-support/register";
 import * as fs from "node:fs";
+import { promises as fsPromises } from "node:fs";
 import * as path from "node:path";
 import { createRequire } from "node:module";
 import {
@@ -768,15 +769,30 @@ async function loadServices(): Promise<void> {
 
   // Set TerminalWindowManager for desktop mode (pop-out terminal windows)
   const terminalWindowManager = new TerminalWindowManagerClass(config);
-  services.setProjectDirectoryPicker(async () => {
+  services.setProjectDirectoryPicker(async (initialPath) => {
     const win = BrowserWindow.getFocusedWindow();
     if (!win) return null;
 
+    // If the caller provided an existing directory, seed the picker there so the
+    // user starts inside (or alongside) the path they already typed/selected.
+    let defaultPath: string | undefined;
+    if (initialPath && initialPath.trim().length > 0) {
+      try {
+        const stat = await fsPromises.stat(initialPath);
+        if (stat.isDirectory()) {
+          defaultPath = initialPath;
+        }
+      } catch {
+        // Path doesn't exist or isn't accessible — let Electron pick a default.
+      }
+    }
+
     const res = await dialog.showOpenDialog(win, {
       // Hide hidden entries so the new-project picker stays focused on visible folders.
       properties: ["openDirectory", "createDirectory"],
       title: "Select Project Directory",
       buttonLabel: "Select Project",
+      defaultPath,
     });
 
     return res.canceled || res.filePaths.length === 0 ? null : res.filePaths[0];
diff --git a/src/node/config.ts b/src/node/config.ts
index 6c31cde1f1..25fe09a3d3 100644
--- a/src/node/config.ts
+++ b/src/node/config.ts
@@ -64,6 +64,7 @@ import { ensurePrivateDirSync } from "@/node/utils/fs";
 import { stripTrailingSlashes } from "@/node/utils/pathUtils";
 import { isProviderAutoRouteEligible } from "@/node/utils/providerRequirements";
 import { getContainerName as getDockerContainerName } from "@/node/runtime/DockerRuntime";
+import { deriveProjectHierarchy } from "@/common/utils/subProjects";
 import { coerceThinkingLevel, type ThinkingLevel } from "@/common/types/thinking";
 
 // Re-export project/provider types from dedicated schema/types files (for preload usage)
@@ -476,6 +477,7 @@ function normalizeProjectRuntimeSettings(projectConfig: ProjectConfig): ProjectC
   const runtimeOverridesEnabled = record.runtimeOverridesEnabled === true ? true : undefined;
 
   const next = { ...record };
+  delete (next as ProjectConfig & { sections?: unknown }).sections;
   if (runtimeEnablement) {
     next.runtimeEnablement = runtimeEnablement;
   } else {
@@ -727,7 +729,26 @@ export class Config {
               ProjectConfig,
             ];
           });
-        const projectsMap = new Map<string, ProjectConfig>(normalizedPairs);
+        const projectsMap = deriveProjectHierarchy(new Map<string, ProjectConfig>(normalizedPairs));
+
+        for (const [projectPath, projectConfig] of projectsMap) {
+          const parentProjectPath = projectConfig.parentProjectPath;
+          if (!parentProjectPath || projectConfig.workspaces.length === 0) {
+            continue;
+          }
+          const parentProject = projectsMap.get(parentProjectPath);
+          if (!parentProject) {
+            continue;
+          }
+          parentProject.workspaces.push(
+            ...projectConfig.workspaces.map((workspace) => ({
+              ...workspace,
+              subProjectPath: workspace.subProjectPath ?? projectPath,
+            }))
+          );
+          projectConfig.workspaces = [];
+          configModified = true;
+        }
 
         const taskSettings = normalizeTaskSettings(parsed.taskSettings);
 
@@ -1494,7 +1515,7 @@ export class Config {
               archivedAt: workspace.archivedAt,
               unarchivedAt: workspace.unarchivedAt,
               projects: workspaceProjects,
-              sectionId: workspace.sectionId,
+              subProjectPath: workspace.subProjectPath,
             };
 
             // Migrate missing createdAt to config for next load
@@ -1592,8 +1613,8 @@ export class Config {
             // Preserve archived timestamps from config
             metadata.archivedAt ??= workspace.archivedAt;
             metadata.unarchivedAt ??= workspace.unarchivedAt;
-            // Preserve section assignment from config
-            metadata.sectionId ??= workspace.sectionId;
+            // Preserve sub-project assignment from config.
+            metadata.subProjectPath ??= workspace.subProjectPath;
             metadata.forkFamilyBaseName ??= workspace.forkFamilyBaseName;
 
             if (!workspace.aiSettingsByAgent && metadata.aiSettingsByAgent) {
@@ -1660,7 +1681,7 @@ export class Config {
               archivedAt: workspace.archivedAt,
               unarchivedAt: workspace.unarchivedAt,
               projects: workspaceProjects,
-              sectionId: workspace.sectionId,
+              subProjectPath: workspace.subProjectPath,
             };
 
             // Save to config for next load
@@ -1708,7 +1729,7 @@ export class Config {
             taskPrompt: workspace.taskPrompt,
             taskTrunkBranch: workspace.taskTrunkBranch,
             projects: workspaceProjects,
-            sectionId: workspace.sectionId,
+            subProjectPath: workspace.subProjectPath,
           };
 
           workspaceMetadata.push(
@@ -1778,7 +1799,7 @@ export class Config {
         archivedAt: metadata.archivedAt,
         unarchivedAt: metadata.unarchivedAt,
         projects: metadata.projects,
-        sectionId: metadata.sectionId,
+        subProjectPath: metadata.subProjectPath,
       };
 
       if (existingIndex >= 0) {
diff --git a/src/node/orpc/router.ts b/src/node/orpc/router.ts
index 93e0ff537c..00ab529213 100644
--- a/src/node/orpc/router.ts
+++ b/src/node/orpc/router.ts
@@ -2489,8 +2489,8 @@ export const router = (authToken?: string) => {
       pickDirectory: t
         .input(schemas.projects.pickDirectory.input)
         .output(schemas.projects.pickDirectory.output)
-        .handler(async ({ context }) => {
-          return context.projectService.pickDirectory();
+        .handler(async ({ context, input }) => {
+          return context.projectService.pickDirectory(input?.initialPath ?? null);
         }),
       getFileCompletions: t
         .input(schemas.projects.getFileCompletions.input)
@@ -2987,49 +2987,17 @@ export const router = (authToken?: string) => {
             context.projectService.setIdleCompactionHours(input.projectPath, input.hours)
           ),
       },
-      sections: {
-        list: t
-          .input(schemas.projects.sections.list.input)
-          .output(schemas.projects.sections.list.output)
-          .handler(({ context, input }) => context.projectService.listSections(input.projectPath)),
-        create: t
-          .input(schemas.projects.sections.create.input)
-          .output(schemas.projects.sections.create.output)
-          .handler(({ context, input }) =>
-            context.projectService.createSection(input.projectPath, input.name, input.color)
-          ),
-        update: t
-          .input(schemas.projects.sections.update.input)
-          .output(schemas.projects.sections.update.output)
-          .handler(({ context, input }) =>
-            context.projectService.updateSection(input.projectPath, input.sectionId, {
-              name: input.name,
-              color: input.color,
-            })
-          ),
-        remove: t
-          .input(schemas.projects.sections.remove.input)
-          .output(schemas.projects.sections.remove.output)
-          .handler(({ context, input }) =>
-            context.projectService.removeSection(input.projectPath, input.sectionId)
-          ),
-        reorder: t
-          .input(schemas.projects.sections.reorder.input)
-          .output(schemas.projects.sections.reorder.output)
-          .handler(({ context, input }) =>
-            context.projectService.reorderSections(input.projectPath, input.sectionIds)
-          ),
+      subProjects: {
         assignWorkspace: t
-          .input(schemas.projects.sections.assignWorkspace.input)
-          .output(schemas.projects.sections.assignWorkspace.output)
+          .input(schemas.projects.subProjects.assignWorkspace.input)
+          .output(schemas.projects.subProjects.assignWorkspace.output)
           .handler(async ({ context, input }) => {
-            const result = await context.projectService.assignWorkspaceToSection(
+            const result = await context.projectService.assignWorkspaceToSubProject(
               input.projectPath,
               input.workspaceId,
-              input.sectionId
+              input.subProjectPath
             );
             if (result.success) {
-              // Emit metadata update so frontend receives the sectionId change
               await context.workspaceService.refreshAndEmitMetadata(input.workspaceId);
             }
             return result;
@@ -3110,7 +3078,7 @@ export const router = (authToken?: string) => {
             input.trunkBranch,
             input.title,
             input.runtimeConfig,
-            input.sectionId,
+            input.subProjectPath,
             input.pendingAutoTitle
           );
           if (!result.success) {
diff --git a/src/node/runtime/runtimeHelpers.test.ts b/src/node/runtime/runtimeHelpers.test.ts
index 1d4024b1b1..61aea16c59 100644
--- a/src/node/runtime/runtimeHelpers.test.ts
+++ b/src/node/runtime/runtimeHelpers.test.ts
@@ -120,6 +120,44 @@ describe("resolveWorkspaceExecutionPath", () => {
   });
 });
 
+it("appends sub-project relative paths to the execution root", () => {
+  const metadata = {
+    runtimeConfig: {
+      type: "worktree",
+      srcBaseDir: "/tmp/src",
+    } satisfies RuntimeConfig,
+    projectPath: "/repo",
+    name: "feature",
+    namedWorkspacePath: "/mux/src/repo/feature",
+    subProjectPath: "/repo/packages/api",
+  };
+  const runtime = createRuntimeForWorkspace(metadata);
+
+  expect(resolveWorkspaceExecutionPath(metadata, runtime)).toBe(
+    "/mux/src/repo/feature/packages/api"
+  );
+});
+
+it("self-heals to the workspace root when sub-project metadata is no longer a descendant", () => {
+  // Persisted metadata can drift: the project may be removed/re-added at a new
+  // path, or the user may edit ~/.mux/config.json by hand. Rather than throwing
+  // (which would break workspace startup until manual recovery), we should drop
+  // the bad sub-project path and execute in the workspace root.
+  const metadata = {
+    runtimeConfig: {
+      type: "worktree",
+      srcBaseDir: "/tmp/src",
+    } satisfies RuntimeConfig,
+    projectPath: "/repo",
+    name: "feature",
+    namedWorkspacePath: "/mux/src/repo/feature",
+    subProjectPath: "/elsewhere/api",
+  };
+  const runtime = createRuntimeForWorkspace(metadata);
+
+  expect(resolveWorkspaceExecutionPath(metadata, runtime)).toBe("/mux/src/repo/feature");
+});
+
 describe("createRuntimeContextForWorkspace", () => {
   it("returns a runtime together with the resolved execution path", () => {
     const metadata = {
diff --git a/src/node/runtime/runtimeHelpers.ts b/src/node/runtime/runtimeHelpers.ts
index bd1cc54ea8..997eccaf5f 100644
--- a/src/node/runtime/runtimeHelpers.ts
+++ b/src/node/runtime/runtimeHelpers.ts
@@ -1,3 +1,4 @@
+import * as path from "path";
 import assert from "@/common/utils/assert";
 import {
   isDockerRuntime,
@@ -17,6 +18,7 @@ export interface WorkspaceMetadataForRuntime {
   projectPath: string;
   name: string;
   namedWorkspacePath?: string;
+  subProjectPath?: string;
 }
 
 /**
@@ -33,17 +35,45 @@ export function resolveWorkspaceExecutionPath(
   metadata: WorkspaceMetadataForRuntime,
   runtime: Runtime
 ): string {
+  const appendSubProjectRelativePath = (workspaceRoot: string): string => {
+    const subProjectPath = metadata.subProjectPath?.trim();
+    if (!subProjectPath) {
+      return workspaceRoot;
+    }
+
+    // Self-heal stale persisted state: project paths can change (e.g. project
+    // removed/re-added at a new location, config edited by hand). When the
+    // recorded sub-project path is no longer a descendant of the workspace's
+    // owning project, fall back to the workspace root rather than throwing —
+    // a wrong cwd is recoverable, a thrown error here breaks workspace
+    // startup/commands until the user manually edits the config.
+    const relativeSubProjectPath = path.relative(metadata.projectPath, subProjectPath);
+    if (
+      !relativeSubProjectPath ||
+      relativeSubProjectPath.startsWith("..") ||
+      path.isAbsolute(relativeSubProjectPath)
+    ) {
+      return workspaceRoot;
+    }
+
+    const runtimeRelativeSubProjectPath = relativeSubProjectPath.replace(/\\/g, "/");
+
+    // Use the runtime path normalizer so SSH/Docker/devcontainer cwd paths use the
+    // target runtime's separator semantics instead of host-only path joining.
+    return runtime.normalizePath(runtimeRelativeSubProjectPath, workspaceRoot);
+  };
+
   if (metadata.projectPath === metadata.name) {
     // In-place workspaces (CLI/benchmarks) execute directly in their project root instead of a
     // named sibling checkout, so deriving a worktree path would be reconstructing the wrong shape.
-    return metadata.projectPath;
+    return appendSubProjectRelativePath(metadata.projectPath);
   }
 
   const runtimeWorkspacePath = runtime.getWorkspacePath(metadata.projectPath, metadata.name);
   assert(runtimeWorkspacePath, `Workspace ${metadata.name} resolved to an empty runtime path`);
 
   if (isDockerRuntime(metadata.runtimeConfig)) {
-    return runtimeWorkspacePath;
+    return appendSubProjectRelativePath(runtimeWorkspacePath);
   }
 
   const persistedWorkspacePath = metadata.namedWorkspacePath?.trim();
@@ -57,7 +87,7 @@ export function resolveWorkspaceExecutionPath(
 
     // Other runtimes can still fall back to their canonical derived path when only identity metadata
     // is available (for example in narrow unit tests).
-    return runtimeWorkspacePath;
+    return appendSubProjectRelativePath(runtimeWorkspacePath);
   }
 
   if (isLocalProjectRuntime(metadata.runtimeConfig)) {
@@ -68,7 +98,7 @@ export function resolveWorkspaceExecutionPath(
     );
   }
 
-  return persistedWorkspacePath;
+  return appendSubProjectRelativePath(persistedWorkspacePath);
 }
 
 export interface WorkspaceRuntimeContext {
diff --git a/src/node/services/projectService.ts b/src/node/services/projectService.ts
index ba7269df00..6a6f3c0bb4 100644
--- a/src/node/services/projectService.ts
+++ b/src/node/services/projectService.ts
@@ -1,11 +1,13 @@
 import type { Config, ProjectConfig } from "@/node/config";
-import type { SectionConfig } from "@/common/types/project";
-import { DEFAULT_SECTION_COLOR } from "@/common/constants/ui";
-import { sortSectionsByLinkedList } from "@/common/utils/sections";
 import { formatSshEndpoint } from "@/common/utils/ssh/formatSshEndpoint";
 import { spawn } from "child_process";
 import { createHash, randomBytes } from "crypto";
-import { validateProjectPath, isGitRepository, stripTrailingSlashes } from "@/node/utils/pathUtils";
+import {
+  validateProjectPath,
+  isGitRepository,
+  isInsideGitRepository,
+  stripTrailingSlashes,
+} from "@/node/utils/pathUtils";
 import { listLocalBranches, detectDefaultTrunkBranch } from "@/node/git";
 import type { Result } from "@/common/types/result";
 import { Ok, Err } from "@/common/types/result";
@@ -34,6 +36,7 @@ import * as path from "path";
 import { getMuxProjectsDir } from "@/common/constants/paths";
 import { expandTilde } from "@/node/runtime/tildeExpansion";
 import { getErrorMessage } from "@/common/utils/errors";
+import { deriveProjectHierarchy, isPathDescendant } from "@/common/utils/subProjects";
 import { getProjectWorkspaceCounts } from "@/common/utils/projectRemoval";
 import type { z } from "zod";
 
@@ -316,9 +319,57 @@ interface FileCompletionsCacheEntry {
   refreshing?: Promise<void>;
 }
 
+async function resolveRealProjectPath(projectPath: string): Promise<string> {
+  return stripTrailingSlashes(await fsPromises.realpath(projectPath));
+}
+
+async function readGitTopLevel(projectPath: string): Promise<string | null> {
+  try {
+    using proc = execFileAsync("git", ["-C", projectPath, "rev-parse", "--show-toplevel"]);
+    const { stdout } = await proc.result;
+    return stripTrailingSlashes(stdout.trim());
+  } catch {
+    return null;
+  }
+}
+
+function findDeepestTopLevelParentProject(
+  candidatePath: string,
+  projects: Map<string, ProjectConfig>
+): string | null {
+  let parentPath: string | null = null;
+  for (const [projectPath, projectConfig] of projects) {
+    if (projectConfig.parentProjectPath || projectPath === candidatePath) {
+      continue;
+    }
+    if (!isPathDescendant(projectPath, candidatePath)) {
+      continue;
+    }
+    if (!parentPath || projectPath.length > parentPath.length) {
+      parentPath = projectPath;
+    }
+  }
+  return parentPath;
+}
+
+function hasRegisteredSubProjectAncestor(
+  candidatePath: string,
+  projects: Map<string, ProjectConfig>
+): boolean {
+  for (const [projectPath, projectConfig] of projects) {
+    if (!projectConfig.parentProjectPath) {
+      continue;
+    }
+    if (isPathDescendant(projectPath, candidatePath)) {
+      return true;
+    }
+  }
+  return false;
+}
+
 export class ProjectService {
   private readonly fileCompletionsCache = new Map<string, FileCompletionsCacheEntry>();
-  private directoryPicker?: () => Promise<string | null>;
+  private directoryPicker?: (initialPath?: string | null) => Promise<string | null>;
   private readonly sshPromptService: SshPromptService | undefined;
   private workspaceService?: WorkspaceRemover;
 
@@ -333,13 +384,13 @@ export class ProjectService {
     this.workspaceService = workspaceService;
   }
 
-  setDirectoryPicker(picker: () => Promise<string | null>) {
+  setDirectoryPicker(picker: (initialPath?: string | null) => Promise<string | null>) {
     this.directoryPicker = picker;
   }
 
-  async pickDirectory(): Promise<string | null> {
+  async pickDirectory(initialPath?: string | null): Promise<string | null> {
     if (!this.directoryPicker) return null;
-    return this.directoryPicker();
+    return this.directoryPicker(initialPath ?? null);
   }
 
   async create(
@@ -396,11 +447,66 @@ export class ProjectService {
         return Err("Project already exists");
       }
 
-      // Create the directory if it doesn't exist (like mkdir -p)
+      const createdDirectory = existingStat == null;
+      const cleanupCreatedDirectory = async () => {
+        if (!createdDirectory) return;
+        try {
+          await fsPromises.rm(normalizedPath, { recursive: true, force: true });
+        } catch (error) {
+          log.error(`Failed to clean up rejected project directory ${normalizedPath}:`, error);
+        }
+      };
+
+      // Create the directory if it doesn't exist (like mkdir -p). Keep the user-facing
+      // path stable in config; Windows realpath may expand 8.3 short names and surprise callers.
       await fsPromises.mkdir(normalizedPath, { recursive: true });
+      const canonicalPath = await resolveRealProjectPath(normalizedPath);
 
-      const projectConfig: ProjectConfig = { workspaces: [] };
+      if (config.projects.has(canonicalPath)) {
+        await cleanupCreatedDirectory();
+        return Err("Project already exists");
+      }
+
+      config.projects = deriveProjectHierarchy(config.projects);
+      if (hasRegisteredSubProjectAncestor(normalizedPath, config.projects)) {
+        await cleanupCreatedDirectory();
+        return Err("Sub-projects can only be one level deep");
+      }
+
+      const parentProjectPath = findDeepestTopLevelParentProject(normalizedPath, config.projects);
+      if (parentProjectPath) {
+        const [parentGitRoot, subProjectGitRoot] = await Promise.all([
+          readGitTopLevel(parentProjectPath),
+          readGitTopLevel(normalizedPath),
+        ]);
+        if (parentGitRoot !== subProjectGitRoot) {
+          await cleanupCreatedDirectory();
+          return Err("Sub-project must be in the same git repository as its parent project");
+        }
+      }
+
+      const descendantProjectPaths = Array.from(config.projects.keys()).filter((candidatePath) =>
+        isPathDescendant(normalizedPath, candidatePath)
+      );
+      if (descendantProjectPaths.length > 0) {
+        const parentGitRoot = await readGitTopLevel(normalizedPath);
+        for (const descendantProjectPath of descendantProjectPaths) {
+          const descendantGitRoot = await readGitTopLevel(descendantProjectPath);
+          if (parentGitRoot !== descendantGitRoot) {
+            await cleanupCreatedDirectory();
+            return Err(
+              "Cannot register a parent project above an existing project from a different git repository"
+            );
+          }
+        }
+      }
+
+      const projectConfig: ProjectConfig = {
+        workspaces: [],
+        parentProjectPath: parentProjectPath ?? undefined,
+      };
       config.projects.set(normalizedPath, projectConfig);
+      config.projects = deriveProjectHierarchy(config.projects);
       await this.config.saveConfig(config);
 
       return Ok({ projectConfig, normalizedPath });
@@ -440,6 +546,11 @@ export class ProjectService {
       const repoFolderName = deriveRepoFolderName(repoUrl);
       const normalizedPath = path.join(cloneParentDir, repoFolderName);
 
+      const normalizedProjects = deriveProjectHierarchy(config.projects);
+      if (findDeepestTopLevelParentProject(normalizedPath, normalizedProjects)) {
+        return Err("Cannot clone a new git repository inside an existing project tree");
+      }
+
       if (config.projects.has(normalizedPath)) {
         return Err(`Project already exists at ${normalizedPath}`);
       }
@@ -831,6 +942,25 @@ export class ProjectService {
         return Err({ type: "project_not_found" as const });
       }
 
+      if (projectConfig.parentProjectPath) {
+        const parentProject = config.projects.get(projectConfig.parentProjectPath);
+        if (parentProject) {
+          for (const workspace of parentProject.workspaces) {
+            if (workspace.subProjectPath === normalizedPath) {
+              workspace.subProjectPath = undefined;
+            }
+          }
+        }
+        try {
+          await this.config.updateProjectSecrets(normalizedPath, []);
+        } catch (error) {
+          log.error(`Failed to clean up secrets for sub-project ${normalizedPath}:`, error);
+        }
+        config.projects.delete(normalizedPath);
+        await this.config.saveConfig(config);
+        return Ok(undefined);
+      }
+
       // Self-healing: purge workspace entries whose backing directories no longer exist.
       // This handles the case where a user manually deleted workspace dirs from ~/.mux/src/.
       // Only check local/worktree runtimes — remote runtimes (SSH, Docker, devcontainer)
@@ -952,9 +1082,24 @@ export class ProjectService {
         return Err({ type: "workspace_blockers" as const, ...counts });
       }
 
+      const removedSubProjectPaths: string[] = [];
+      for (const [candidatePath, candidateConfig] of Array.from(config.projects.entries())) {
+        if (candidateConfig.parentProjectPath === normalizedPath) {
+          removedSubProjectPaths.push(candidatePath);
+          config.projects.delete(candidatePath);
+        }
+      }
       config.projects.delete(normalizedPath);
       await this.config.saveConfig(config);
 
+      for (const subProjectPath of removedSubProjectPaths) {
+        try {
+          await this.config.updateProjectSecrets(subProjectPath, []);
+        } catch (error) {
+          log.error(`Failed to clean up secrets for sub-project ${subProjectPath}:`, error);
+        }
+      }
+
       try {
         await this.config.updateProjectSecrets(normalizedPath, []);
       } catch (error) {
@@ -971,7 +1116,7 @@ export class ProjectService {
   list(): Array<[string, ProjectConfig]> {
     try {
       const config = this.config.loadConfigOrDefault();
-      return Array.from(config.projects.entries());
+      return Array.from(deriveProjectHierarchy(config.projects).entries());
     } catch (error) {
       log.error("Failed to list projects:", error);
       return [];
@@ -989,8 +1134,11 @@ export class ProjectService {
       }
       const normalizedPath = validation.expandedPath!;
 
-      // Non-git repos return empty branches - they're restricted to local runtime only
-      if (!(await isGitRepository(normalizedPath))) {
+      // Non-git repos return empty branches - they're restricted to local runtime only.
+      // Use `git rev-parse --is-inside-work-tree` so sub-projects (whose .git lives
+      // in a parent directory) still surface the surrounding repo's branches and
+      // don't trigger the "git init" banner.
+      if (!(await isInsideGitRepository(normalizedPath))) {
         return { branches: [], recommendedTrunk: null };
       }
 
@@ -1235,175 +1383,14 @@ export class ProjectService {
   // ─────────────────────────────────────────────────────────────────────────────
 
   /**
-   * List all sections for a project, sorted by linked-list order.
-   */
-  listSections(projectPath: string): SectionConfig[] {
-    try {
-      const config = this.config.loadConfigOrDefault();
-      const project = config.projects.get(projectPath);
-      if (!project) return [];
-      return sortSectionsByLinkedList(project.sections ?? []);
-    } catch (error) {
-      log.error("Failed to list sections:", error);
-      return [];
-    }
-  }
-
-  /**
-   * Create a new section in a project.
-   */
-  async createSection(
-    projectPath: string,
-    name: string,
-    color?: string
-  ): Promise<Result<SectionConfig>> {
-    try {
-      const config = this.config.loadConfigOrDefault();
-      const project = config.projects.get(projectPath);
-
-      if (!project) {
-        return Err(`Project not found: ${projectPath}`);
-      }
-
-      const sections = project.sections ?? [];
-
-      const section: SectionConfig = {
-        id: randomBytes(4).toString("hex"),
-        name,
-        color: color ?? DEFAULT_SECTION_COLOR,
-        nextId: null, // new section is last
-      };
-
-      // Find current tail (nextId is null/undefined) and point it to new section
-      const sorted = sortSectionsByLinkedList(sections);
-      if (sorted.length > 0) {
-        const tail = sorted[sorted.length - 1];
-        tail.nextId = section.id;
-      }
-
-      project.sections = [...sections, section];
-      await this.config.saveConfig(config);
-      return Ok(section);
-    } catch (error) {
-      const message = getErrorMessage(error);
-      return Err(`Failed to create section: ${message}`);
-    }
-  }
-
-  /**
-   * Update section name and/or color.
-   */
-  async updateSection(
-    projectPath: string,
-    sectionId: string,
-    updates: { name?: string; color?: string }
-  ): Promise<Result<void>> {
-    try {
-      const config = this.config.loadConfigOrDefault();
-      const project = config.projects.get(projectPath);
-
-      if (!project) {
-        return Err(`Project not found: ${projectPath}`);
-      }
-
-      const sections = project.sections ?? [];
-      const sectionIndex = sections.findIndex((s) => s.id === sectionId);
-
-      if (sectionIndex === -1) {
-        return Err(`Section not found: ${sectionId}`);
-      }
-
-      const section = sections[sectionIndex];
-      if (updates.name !== undefined) section.name = updates.name;
-      if (updates.color !== undefined) section.color = updates.color;
-
-      await this.config.saveConfig(config);
-      return Ok(undefined);
-    } catch (error) {
-      const message = getErrorMessage(error);
-      return Err(`Failed to update section: ${message}`);
-    }
-  }
-
-  /**
-   * Remove a section and unsection any workspaces assigned to it.
-   */
-  async removeSection(projectPath: string, sectionId: string): Promise<Result<void>> {
-    try {
-      const config = this.config.loadConfigOrDefault();
-      const project = config.projects.get(projectPath);
-
-      if (!project) {
-        return Err(`Project not found: ${projectPath}`);
-      }
-
-      const sections = project.sections ?? [];
-      const sectionIndex = sections.findIndex((s) => s.id === sectionId);
-
-      if (sectionIndex === -1) {
-        return Err(`Section not found: ${sectionId}`);
-      }
-
-      const workspacesInSection = project.workspaces.filter((w) => w.sectionId === sectionId);
-
-      // Unsection all workspaces in this section
-      for (const workspace of workspacesInSection) {
-        workspace.sectionId = undefined;
-      }
-
-      // Remove the section
-      project.sections = sections.filter((s) => s.id !== sectionId);
-      await this.config.saveConfig(config);
-      return Ok(undefined);
-    } catch (error) {
-      const message = getErrorMessage(error);
-      return Err(`Failed to remove section: ${message}`);
-    }
-  }
-
-  /**
-   * Reorder sections by providing the full ordered list of section IDs.
-   */
-  async reorderSections(projectPath: string, sectionIds: string[]): Promise<Result<void>> {
-    try {
-      const config = this.config.loadConfigOrDefault();
-      const project = config.projects.get(projectPath);
-
-      if (!project) {
-        return Err(`Project not found: ${projectPath}`);
-      }
-
-      const sections = project.sections ?? [];
-      const sectionMap = new Map(sections.map((s) => [s.id, s]));
-
-      // Validate all IDs exist
-      for (const id of sectionIds) {
-        if (!sectionMap.has(id)) {
-          return Err(`Section not found: ${id}`);
-        }
-      }
-
-      // Update nextId pointers based on array order
-      for (let i = 0; i < sectionIds.length; i++) {
-        const section = sectionMap.get(sectionIds[i])!;
-        section.nextId = i < sectionIds.length - 1 ? sectionIds[i + 1] : null;
-      }
-
-      await this.config.saveConfig(config);
-      return Ok(undefined);
-    } catch (error) {
-      const message = getErrorMessage(error);
-      return Err(`Failed to reorder sections: ${message}`);
-    }
-  }
-
-  /**
-   * Assign a workspace to a section (or remove from section with null).
+   * Re-home a workspace into a sub-project (or back to the parent with null).
+   * This intentionally changes only the cwd/prompt context pointer; the parent
+   * project keeps owning the checkout and branch because sub-projects share one git repo.
    */
-  async assignWorkspaceToSection(
+  async assignWorkspaceToSubProject(
     projectPath: string,
     workspaceId: string,
-    sectionId: string | null
+    subProjectPath: string | null
   ): Promise<Result<void>> {
     try {
       const config = this.config.loadConfigOrDefault();
@@ -1413,26 +1400,24 @@ export class ProjectService {
         return Err(`Project not found: ${projectPath}`);
       }
 
-      // Validate section exists if not null
-      if (sectionId !== null) {
-        const sections = project.sections ?? [];
-        if (!sections.some((s) => s.id === sectionId)) {
-          return Err(`Section not found: ${sectionId}`);
+      if (subProjectPath !== null) {
+        const subProject = config.projects.get(subProjectPath);
+        if (subProject?.parentProjectPath !== projectPath) {
+          return Err(`Sub-project not found under parent: ${subProjectPath}`);
         }
       }
 
-      // Find and update workspace
       const workspace = project.workspaces.find((w) => w.id === workspaceId);
       if (!workspace) {
         return Err(`Workspace not found: ${workspaceId}`);
       }
 
-      workspace.sectionId = sectionId ?? undefined;
+      workspace.subProjectPath = subProjectPath ?? undefined;
       await this.config.saveConfig(config);
       return Ok(undefined);
     } catch (error) {
       const message = getErrorMessage(error);
-      return Err(`Failed to assign workspace to section: ${message}`);
+      return Err(`Failed to assign workspace to sub-project: ${message}`);
     }
   }
 }
diff --git a/src/node/services/serviceContainer.ts b/src/node/services/serviceContainer.ts
index 472b9074a9..f0cbc98db0 100644
--- a/src/node/services/serviceContainer.ts
+++ b/src/node/services/serviceContainer.ts
@@ -513,7 +513,7 @@ export class ServiceContainer {
     await this.telemetryService.shutdown();
   }
 
-  setProjectDirectoryPicker(picker: () => Promise<string | null>): void {
+  setProjectDirectoryPicker(picker: (initialPath?: string | null) => Promise<string | null>): void {
     this.projectService.setDirectoryPicker(picker);
   }
 
diff --git a/src/node/services/systemMessage.test.ts b/src/node/services/systemMessage.test.ts
index f8a083adfb..f93efbe734 100644
--- a/src/node/services/systemMessage.test.ts
+++ b/src/node/services/systemMessage.test.ts
@@ -35,9 +35,13 @@ From agent: Use ripgrep alias.
       agentInstructions,
     });
 
-    expect(result.bash).toContain("From agent: Use ripgrep alias.");
-    expect(result.bash).not.toContain("From context");
-    expect(result.bash).not.toContain("From global");
+    expect(result.bash).toBe(
+      [
+        "From agent: Use ripgrep alias.",
+        "From context: Use fd for finding.",
+        "From global: Use rg for searching.",
+      ].join("\n\n")
+    );
   });
 
   test("falls back to context when agentInstructions has no matching tool section", () => {
@@ -55,8 +59,9 @@ From agent: Read files carefully.
       agentInstructions,
     });
 
-    expect(result.bash).toContain("From context: Use fd for finding.");
-    expect(result.bash).not.toContain("From global");
+    expect(result.bash).toBe(
+      ["From context: Use fd for finding.", "From global: Use rg for searching."].join("\n\n")
+    );
   });
 
   test("keeps every matching context tool section before falling back to global", () => {
@@ -76,9 +81,9 @@ From secondary repo: Prefer rg --files before find.
       [
         "From primary repo: Prefer git status --short.",
         "From secondary repo: Prefer rg --files before find.",
+        "From global: Use rg for searching.",
       ].join("\n\n")
     );
-    expect(result.bash).not.toContain("From global");
   });
 
   test("falls back to global when neither agentInstructions nor context has tool section", () => {
@@ -188,7 +193,7 @@ describe("buildSystemMessage", () => {
 
   test("includes general instructions in custom-instructions", async () => {
     await fs.writeFile(
-      path.join(projectDir, "AGENTS.md"),
+      path.join(workspaceDir, "AGENTS.md"),
       `# General Instructions
 Always be helpful.
 Use clear examples.
@@ -271,14 +276,14 @@ From secondary repo: prefer rg --files before find.
       [
         "From primary repo: prefer git status --short.",
         "From secondary repo: prefer rg --files before find.",
+        "From global: this should only apply when context has no bash section.",
       ].join("\n\n")
     );
-    expect(toolInstructions.bash).not.toContain("From global");
   });
 
   test("includes model-specific section when regex matches active model", async () => {
     await fs.writeFile(
-      path.join(projectDir, "AGENTS.md"),
+      path.join(workspaceDir, "AGENTS.md"),
       `# Instructions
 ## Model: sonnet
 Respond to Sonnet tickets in two sentences max.
@@ -319,7 +324,7 @@ OpenAI's GPT-5.1 Codex models already default to terse replies.
     );
 
     await fs.writeFile(
-      path.join(projectDir, "AGENTS.md"),
+      path.join(workspaceDir, "AGENTS.md"),
       `# Project Instructions
 General details only.
 `
@@ -391,7 +396,7 @@ Be extra concise when using Sonnet.
 
     test("agentSystemPrompt model section takes precedence over AGENTS.md", async () => {
       await fs.writeFile(
-        path.join(projectDir, "AGENTS.md"),
+        path.join(workspaceDir, "AGENTS.md"),
         `## Model: sonnet
 From AGENTS.md: Be verbose.
 `
@@ -419,14 +424,16 @@ From agent: Be terse.
         { agentSystemPrompt }
       );
 
-      // Agent definition's model section wins
       expect(systemMessage).toContain("From agent: Be terse.");
-      expect(systemMessage).not.toContain("From AGENTS.md: Be verbose.");
+      expect(systemMessage).toContain("From AGENTS.md: Be verbose.");
+      expect(systemMessage.indexOf("From agent: Be terse.")).toBeLessThan(
+        systemMessage.indexOf("From AGENTS.md: Be verbose.")
+      );
     });
 
     test("falls back to AGENTS.md when agentSystemPrompt has no matching model section", async () => {
       await fs.writeFile(
-        path.join(projectDir, "AGENTS.md"),
+        path.join(workspaceDir, "AGENTS.md"),
         `## Model: sonnet
 From AGENTS.md: Sonnet instructions.
 `
@@ -511,7 +518,7 @@ OpenAI-only instructions.
 
     for (const scenario of scopingScenarios) {
       test(scenario.name, async () => {
-        await fs.writeFile(path.join(projectDir, "AGENTS.md"), scenario.mdContent);
+        await fs.writeFile(path.join(workspaceDir, "AGENTS.md"), scenario.mdContent);
 
         const metadata: WorkspaceMetadata = {
           id: "test-workspace",
diff --git a/src/node/services/systemMessage.ts b/src/node/services/systemMessage.ts
index 15f4ce179e..e113f96a23 100644
--- a/src/node/services/systemMessage.ts
+++ b/src/node/services/systemMessage.ts
@@ -220,24 +220,6 @@ function getSystemDirectory(): string {
   return getMuxHome();
 }
 
-/**
- * Search instruction sources in priority order: agent → context → global.
- * Returns the first non-null result from the extractor function.
- */
-function searchInstructionSources<T>(
-  sources: { agent?: string | null; context?: string | null; global?: string | null },
-  extractor: (source: string) => T | null
-): T | null {
-  // Priority: agent definition → workspace/project AGENTS.md → global AGENTS.md
-  for (const src of [sources.agent, sources.context, sources.global]) {
-    if (src) {
-      const result = extractor(src);
-      if (result !== null) return result;
-    }
-  }
-  return null;
-}
-
 /**
  * Extract tool-specific instructions from instruction sources.
  * Searches agent instructions first, then context (workspace/project), then global.
@@ -268,9 +250,11 @@ export function extractToolInstructions(
   };
 
   for (const toolName of availableTools) {
-    const content = searchInstructionSources(sources, (src) => extractToolSection(src, toolName));
-    if (content) {
-      toolInstructions[toolName] = content;
+    const segments = [sources.agent, sources.context, sources.global]
+      .map((src) => (src ? extractToolSection(src, toolName) : null))
+      .filter((content): content is string => content != null && content.trim().length > 0);
+    if (segments.length > 0) {
+      toolInstructions[toolName] = segments.join("\n\n");
     }
   }
 
@@ -345,6 +329,57 @@ async function readMultiProjectContextInstructions(
   return contextSegments.length > 0 ? contextSegments.join("\n\n") : null;
 }
 
+async function readSingleProjectContextInstructions(
+  metadata: WorkspaceMetadata,
+  runtime: Runtime,
+  workspacePath: string
+): Promise<string | null> {
+  // Read parent + sub-project AGENTS.md from the workspace's *own* checkout
+  // (via the runtime). For worktree/SSH/Docker flows the parent project's host
+  // path is a different checkout than the workspace branch — mixing the two
+  // would inject contradictory or stale guidance and prevent workspace-branch
+  // edits from overriding parent guidance. The workspace root is by
+  // construction the parent project's checkout, and any registered
+  // sub-project's relative path is stable across checkouts of the same repo.
+  const subProjectRelativePath = metadata.subProjectPath
+    ? deriveSubProjectRelativePath(metadata.projectPath, metadata.subProjectPath)
+    : null;
+
+  // path.relative emits host-native separators (e.g., "packages\\api" on Windows),
+  // but SSH/Docker/devcontainer runtimes read files via POSIX paths. Normalize to
+  // forward slashes and let the runtime joiner produce a runtime-correct path.
+  const subProjectInstructionsDir = subProjectRelativePath
+    ? runtime.normalizePath(subProjectRelativePath.replace(/\\/g, "/"), workspacePath)
+    : null;
+
+  const [parentInstructions, subProjectInstructions] = await Promise.all([
+    readInstructionSetFromRuntime(runtime, workspacePath),
+    subProjectInstructionsDir
+      ? readInstructionSetFromRuntime(runtime, subProjectInstructionsDir)
+      : Promise.resolve(null),
+  ]);
+
+  const contextSegments = [parentInstructions, subProjectInstructions].filter(
+    (segment): segment is string => segment != null && segment.trim().length > 0
+  );
+  return contextSegments.length > 0 ? contextSegments.join("\n\n") : null;
+}
+
+/**
+ * Compute the path of `subProjectPath` relative to `projectPath` for use under
+ * the workspace's own checkout. Returns `null` if the recorded sub-project
+ * path is not actually a descendant of the parent project (stale persisted
+ * state) — callers should treat that as "no sub-project segment" and fall
+ * back to parent-only instructions rather than failing.
+ */
+function deriveSubProjectRelativePath(projectPath: string, subProjectPath: string): string | null {
+  const relative = path.relative(projectPath, subProjectPath);
+  if (!relative || relative.startsWith("..") || path.isAbsolute(relative)) {
+    return null;
+  }
+  return relative;
+}
+
 /**
  * Read instruction sets from global and context sources.
  * Internal helper for buildSystemMessage and extractToolInstructions.
@@ -366,8 +401,7 @@ async function readInstructionSources(
   const globalInstructions = await readInstructionSet(getSystemDirectory());
   const contextInstructions = isMultiProject(metadata)
     ? await readMultiProjectContextInstructions(metadata, runtime, workspacePath)
-    : ((await readInstructionSetFromRuntime(runtime, workspacePath)) ??
-      (await readInstructionSet(metadata.projectPath)));
+    : await readSingleProjectContextInstructions(metadata, runtime, workspacePath);
 
   return [globalInstructions, contextInstructions];
 }
@@ -435,7 +469,7 @@ export async function buildSystemMessage(
 
   const agentPrompt = options?.agentSystemPrompt?.trim() ?? null;
 
-  // Combine: global + context (workspace takes precedence over project) after stripping scoped sections
+  // Combine: global + concatenated project/sub-project/workspace after stripping scoped sections.
   // Also strip scoped sections from agent prompt for consistency
   const sanitizeScopedInstructions = (input?: string | null): string | undefined => {
     if (!input) return undefined;
@@ -456,10 +490,10 @@ export async function buildSystemMessage(
 
   // Extract model-specific section based on active model identifier
   const modelContent = modelString
-    ? searchInstructionSources(
-        { agent: agentPrompt, context: contextInstructions, global: globalInstructions },
-        (src) => extractModelSection(src, modelString)
-      )
+    ? [agentPrompt, contextInstructions, globalInstructions]
+        .map((src) => (src ? extractModelSection(src, modelString) : null))
+        .filter((content): content is string => content != null && content.trim().length > 0)
+        .join("\n\n")
     : null;
 
   if (customInstructions) {
diff --git a/src/node/services/workspaceService.ts b/src/node/services/workspaceService.ts
index 0ea3deb56d..0bb166a244 100644
--- a/src/node/services/workspaceService.ts
+++ b/src/node/services/workspaceService.ts
@@ -2105,15 +2105,29 @@ export class WorkspaceService extends EventEmitter {
     trunkBranch: string | undefined,
     title?: string,
     runtimeConfig?: RuntimeConfig,
-    sectionId?: string,
+    subProjectPath?: string,
     pendingAutoTitle?: boolean
   ): Promise<Result<{ metadata: FrontendWorkspaceMetadata }>> {
+    const configSnapshot = this.config.loadConfigOrDefault();
+    const requestedProjectPath = stripTrailingSlashes(projectPath);
+    const requestedProjectConfig = configSnapshot.projects.get(requestedProjectPath);
+    const owningProjectPath = requestedProjectConfig?.parentProjectPath ?? requestedProjectPath;
+    const effectiveSubProjectPath = requestedProjectConfig?.parentProjectPath
+      ? requestedProjectPath
+      : subProjectPath;
+    const projectConfig = configSnapshot.projects.get(owningProjectPath);
+
+    if (
+      effectiveSubProjectPath &&
+      configSnapshot.projects.get(effectiveSubProjectPath)?.parentProjectPath !== owningProjectPath
+    ) {
+      return Err(`Sub-project not found under parent: ${effectiveSubProjectPath}`);
+    }
+
     // Trust gate: block workspace creation for untrusted projects.
     // The frontend shows a confirmation dialog before reaching here,
-    // but this guards secondary paths (slash commands, forking).
-    const projectConfig = this.config
-      .loadConfigOrDefault()
-      .projects.get(stripTrailingSlashes(projectPath));
+    // but this guards secondary paths (slash commands, forking). Sub-projects
+    // share their parent's checkout, so trust is owned by that parent project.
     if (!projectConfig?.trusted) {
       return Err(
         "This project must be trusted before creating workspaces. Trust the project in Settings → Security, or create a workspace from the project page."
@@ -2123,6 +2137,8 @@ export class WorkspaceService extends EventEmitter {
     // Auto-generate a branch name when the caller omits one (used by /new to
     // mirror /fork's seamless creation flow). Mirrors fork's auto-naming: scan
     // existing workspace names AND local git branches so numbering is stable.
+    // Branches/worktrees are owned by the parent project, so always read from
+    // owningProjectPath even when a sub-project initiated creation.
     let resolvedBranchName: string;
     if (branchName == null) {
       const existingNamesSet = new Set<string>();
@@ -2132,12 +2148,12 @@ export class WorkspaceService extends EventEmitter {
         }
       }
       try {
-        for (const localBranch of await listLocalBranches(projectPath)) {
+        for (const localBranch of await listLocalBranches(owningProjectPath)) {
           existingNamesSet.add(localBranch);
         }
       } catch (error) {
         log.debug("Failed to list local branches for /new auto-name preflight", {
-          projectPath,
+          projectPath: owningProjectPath,
           error: getErrorMessage(error),
         });
       }
@@ -2179,7 +2195,7 @@ export class WorkspaceService extends EventEmitter {
 
     let runtime;
     try {
-      runtime = createRuntime(finalRuntimeConfig, { projectPath });
+      runtime = createRuntime(finalRuntimeConfig, { projectPath: owningProjectPath });
 
       // Resolve srcBaseDir path if the config has one.
       // Skip if runtime has deferredRuntimeAccess flag (runtime doesn't exist yet, e.g., Coder).
@@ -2191,7 +2207,7 @@ export class WorkspaceService extends EventEmitter {
             ...finalRuntimeConfig,
             srcBaseDir: resolvedSrcBaseDir,
           };
-          runtime = createRuntime(finalRuntimeConfig, { projectPath });
+          runtime = createRuntime(finalRuntimeConfig, { projectPath: owningProjectPath });
         }
       }
     } catch (error) {
@@ -2200,7 +2216,7 @@ export class WorkspaceService extends EventEmitter {
     }
 
     const session = this.getOrCreateSession(workspaceId);
-    this.initStateManager.startInit(workspaceId, projectPath);
+    this.initStateManager.startInit(workspaceId, owningProjectPath);
 
     // Create abort controller immediately so workspace lifecycle operations (e.g., cancel/remove)
     // can reliably interrupt init even if the UI deletes the workspace during create().
@@ -2218,7 +2234,7 @@ export class WorkspaceService extends EventEmitter {
       // check against existing workspace names before createWorkspace.
       if (runtime.createFlags?.configLevelCollisionDetection) {
         const existingNames = new Set(
-          (this.config.loadConfigOrDefault().projects.get(projectPath)?.workspaces ?? []).map(
+          (this.config.loadConfigOrDefault().projects.get(owningProjectPath)?.workspaces ?? []).map(
             (w) => w.name
           )
         );
@@ -2233,13 +2249,13 @@ export class WorkspaceService extends EventEmitter {
       }
 
       const createEnv = await secretsToRecord(
-        this.config.getEffectiveSecrets(projectPath),
+        this.config.getEffectiveSecrets(owningProjectPath),
         this.opResolver
       );
 
       for (let attempt = 0; attempt <= MAX_WORKSPACE_NAME_COLLISION_RETRIES; attempt++) {
         createResult = await runtime.createWorkspace({
-          projectPath,
+          projectPath: owningProjectPath,
           branchName: finalBranchName,
           trunkBranch: normalizedTrunkBranch,
           directoryName: finalBranchName,
@@ -2276,7 +2292,7 @@ export class WorkspaceService extends EventEmitter {
           return Err(finalizeResult.error);
         }
         finalRuntimeConfig = finalizeResult.data;
-        runtime = createRuntime(finalRuntimeConfig, { projectPath });
+        runtime = createRuntime(finalRuntimeConfig, { projectPath: owningProjectPath });
       }
 
       // Let runtime validate before persisting (e.g., external collision checks)
@@ -2292,22 +2308,23 @@ export class WorkspaceService extends EventEmitter {
       }
 
       const projectName =
-        projectPath.split("/").pop() ?? projectPath.split("\\").pop() ?? "unknown";
+        owningProjectPath.split("/").pop() ?? owningProjectPath.split("\\").pop() ?? "unknown";
 
       const metadata = {
         id: workspaceId,
         name: finalBranchName,
         title,
         projectName,
-        projectPath,
+        projectPath: owningProjectPath,
+        subProjectPath: effectiveSubProjectPath,
         createdAt: new Date().toISOString(),
       };
 
       await this.config.editConfig((config) => {
-        let projectConfig = config.projects.get(projectPath);
+        let projectConfig = config.projects.get(owningProjectPath);
         if (!projectConfig) {
           projectConfig = { workspaces: [] };
-          config.projects.set(projectPath, projectConfig);
+          config.projects.set(owningProjectPath, projectConfig);
         }
         projectConfig.workspaces.push({
           path: createResult!.workspacePath!,
@@ -2316,7 +2333,7 @@ export class WorkspaceService extends EventEmitter {
           title,
           createdAt: metadata.createdAt,
           runtimeConfig: finalRuntimeConfig,
-          sectionId,
+          subProjectPath: effectiveSubProjectPath,
           // Mirror /fork: when /new is invoked with a start message, defer title
           // selection until the first message can drive LLM-based generation.
           ...(pendingAutoTitle === true ? { pendingAutoTitle: true } : {}),
@@ -2335,7 +2352,7 @@ export class WorkspaceService extends EventEmitter {
 
       // Background init: run postCreateSetup (if present) then initWorkspace
       const secrets = await secretsToRecord(
-        this.config.getEffectiveSecrets(projectPath),
+        this.config.getEffectiveSecrets(owningProjectPath),
         this.opResolver
       );
       // Background init: postCreateSetup (provisioning) + initWorkspace (sync/checkout/hook)
@@ -2346,7 +2363,7 @@ export class WorkspaceService extends EventEmitter {
         runBackgroundInit(
           runtime,
           {
-            projectPath,
+            projectPath: owningProjectPath,
             branchName: finalBranchName,
             trunkBranch: normalizedTrunkBranch,
             workspacePath: createResult!.workspacePath,
@@ -2404,6 +2421,17 @@ export class WorkspaceService extends EventEmitter {
       assert(primaryProject, "createMultiProject requires a primary project");
 
       const configSnapshot = this.config.loadConfigOrDefault();
+      for (const project of normalizedProjects) {
+        const projectConfig = configSnapshot.projects.get(
+          stripTrailingSlashes(project.projectPath)
+        );
+        if (projectConfig?.parentProjectPath) {
+          return Err(
+            `Sub-project ${project.projectName} cannot be added directly to a multi-project workspace. Add its parent project instead.`
+          );
+        }
+      }
+
       for (const project of normalizedProjects) {
         const projectConfig = configSnapshot.projects.get(
           stripTrailingSlashes(project.projectPath)
@@ -5289,8 +5317,8 @@ export class WorkspaceService extends EventEmitter {
         createdAt: new Date().toISOString(),
         runtimeConfig: forkedRuntimeConfig,
         namedWorkspacePath,
-        // Preserve workspace organization when forking via /fork.
-        sectionId: sourceMetadata.sectionId,
+        // Preserve sub-project cwd/prompt context when forking via /fork.
+        subProjectPath: sourceMetadata.subProjectPath,
         // Forks with a continue message stay pending until the first accepted user send
         // can generate a more specific title, unless the user edits the title first.
         pendingAutoTitle: pendingAutoTitle === true ? true : undefined,
diff --git a/src/node/utils/pathUtils.ts b/src/node/utils/pathUtils.ts
index 4ec464da4c..b003df87e0 100644
--- a/src/node/utils/pathUtils.ts
+++ b/src/node/utils/pathUtils.ts
@@ -1,5 +1,6 @@
 import * as fs from "fs/promises";
 import * as path from "path";
+import { execFileAsync } from "./disposableExec";
 import { PlatformPaths } from "./paths.main";
 
 /**
@@ -107,6 +108,25 @@ export async function isGitRepository(projectPath: string): Promise<boolean> {
   }
 }
 
+/**
+ * Check whether `projectPath` lies inside a git work tree, even if `.git`
+ * lives in an ancestor directory. This matters for sub-projects: the
+ * sub-project directory itself has no `.git`, but it still belongs to the
+ * parent project's git work tree, so we should treat it as a git repo for
+ * UX (e.g. branch listing, suppressing the "git init" banner).
+ *
+ * @param projectPath - Path to check (should be already validated/normalized)
+ */
+export async function isInsideGitRepository(projectPath: string): Promise<boolean> {
+  try {
+    using proc = execFileAsync("git", ["-C", projectPath, "rev-parse", "--is-inside-work-tree"]);
+    const { stdout } = await proc.result;
+    return stdout.trim() === "true";
+  } catch {
+    return false;
+  }
+}
+
 /**
  * Check whether `filePath` is equal to or nested inside `dirPath`.
  *
diff --git a/tests/ui/chat/sections.test.ts b/tests/ui/chat/sections.test.ts
deleted file mode 100644
index a75f773830..0000000000
--- a/tests/ui/chat/sections.test.ts
+++ /dev/null
@@ -1,774 +0,0 @@
-/**
- * Integration tests for workspace sections.
- *
- * Tests verify:
- * - Section UI elements render correctly with proper data attributes
- * - Section and drop zone UI elements render with proper data attributes
- * - Workspace creation with sectionId assigns to that section
- * - Section "+" button pre-selects section in creation flow
- * - Section removal invariants (removal unsections active/archived workspaces)
- * - Section reordering via API and UI reflection
- *
- * Testing approach:
- * - Section creation uses ORPC (happy-dom doesn't reliably handle React controlled inputs)
- * - We test that sections render correctly, not the text input submission interaction
- * - Workspace creation uses ORPC for speed (setup/teardown is acceptable per AGENTS.md)
- * - DnD gestures tested in Storybook (react-dnd-html5-backend doesn't work in happy-dom)
- */
-
-import "../dom";
-import { act, fireEvent, waitFor } from "@testing-library/react";
-
-import { shouldRunIntegrationTests } from "../../testUtils";
-import {
-  cleanupSharedRepo,
-  createSharedRepo,
-  getSharedEnv,
-  getSharedRepoPath,
-} from "../../ipc/sendMessageTestHelpers";
-import { generateBranchName } from "../../ipc/helpers";
-import { detectDefaultTrunkBranch } from "../../../src/node/git";
-
-import { installDom } from "../dom";
-import { renderApp } from "../renderReviewPanel";
-import { cleanupView, setupWorkspaceView } from "../helpers";
-import { expandProjects } from "@/browser/stories/helpers/uiState";
-
-const describeIntegration = shouldRunIntegrationTests() ? describe : describe.skip;
-
-// ═══════════════════════════════════════════════════════════════════════════════
-// HELPER FUNCTIONS
-// ═══════════════════════════════════════════════════════════════════════════════
-
-/**
- * Find a workspace row in the sidebar by workspace ID.
- */
-function findWorkspaceRow(container: HTMLElement, workspaceId: string): HTMLElement | null {
-  return container.querySelector(`[data-workspace-id="${workspaceId}"]`);
-}
-
-/**
- * Find a section drop zone in the sidebar by section ID.
- */
-function findSectionDropZone(container: HTMLElement, sectionId: string): HTMLElement | null {
-  return container.querySelector(`[data-drop-section-id="${sectionId}"]`);
-}
-
-/**
- * Find the unsectioned workspaces drop zone.
- */
-function findUnsectionedDropZone(container: HTMLElement): HTMLElement | null {
-  return container.querySelector('[data-testid="unsectioned-drop-zone"]');
-}
-
-/**
- * Wait for a section header to appear in the sidebar.
- */
-async function waitForSection(
-  container: HTMLElement,
-  sectionId: string,
-  timeoutMs = 5_000
-): Promise<HTMLElement> {
-  return waitFor(
-    () => {
-      const section = container.querySelector(`[data-section-id="${sectionId}"]`);
-      if (!section) throw new Error(`Section ${sectionId} not found`);
-      return section as HTMLElement;
-    },
-    { timeout: timeoutMs }
-  );
-}
-
-/**
- * Get all section IDs in DOM order.
- */
-function getSectionIdsInOrder(container: HTMLElement): string[] {
-  const sections = container.querySelectorAll("[data-section-id]");
-  return Array.from(sections)
-    .map((el) => el.getAttribute("data-section-id"))
-    .filter((id): id is string => id !== null && id !== "");
-}
-
-/**
- * Create a section via ORPC. Returns the section ID.
- *
- * Note: This does NOT wait for UI to update - use with tests that don't need
- * immediate UI reflection, or call refreshProjects() after and wait appropriately.
- *
- * We use ORPC instead of UI interactions because happy-dom doesn't properly
- * handle React controlled inputs (fireEvent.change doesn't trigger React state updates
- * synchronously, causing keyDown/blur handlers to see stale state).
- */
-async function createSectionViaAPI(
-  env: ReturnType<typeof getSharedEnv>,
-  projectPath: string,
-  sectionName: string
-): Promise<string> {
-  const result = await env.orpc.projects.sections.create({
-    projectPath,
-    name: sectionName,
-  });
-
-  if (!result.success) {
-    throw new Error(`Failed to create section: ${result.error}`);
-  }
-
-  return result.data.id;
-}
-
-// ═══════════════════════════════════════════════════════════════════════════════
-// TESTS
-// ═══════════════════════════════════════════════════════════════════════════════
-
-describeIntegration("Workspace Sections", () => {
-  beforeAll(async () => {
-    await createSharedRepo();
-  });
-
-  afterAll(async () => {
-    await cleanupSharedRepo();
-  });
-
-  // ─────────────────────────────────────────────────────────────────────────────
-  // UI Infrastructure
-  // ─────────────────────────────────────────────────────────────────────────────
-
-  test("section renders with drop zones after creation", async () => {
-    const env = getSharedEnv();
-    const projectPath = getSharedRepoPath();
-
-    // Create a workspace first (ORPC is fine for setup)
-    const branchName = generateBranchName("test-section-ui");
-    const trunkBranch = await detectDefaultTrunkBranch(projectPath);
-    const wsResult = await env.orpc.workspace.create({
-      projectPath,
-      branchName,
-      trunkBranch,
-    });
-    if (!wsResult.success) throw new Error(`Failed to create workspace: ${wsResult.error}`);
-    const workspaceId = wsResult.metadata.id;
-    const metadata = wsResult.metadata;
-
-    // Create section BEFORE rendering so it's in the initial config
-    const sectionId = await createSectionViaAPI(env, projectPath, "Test Section");
-
-    const cleanupDom = installDom();
-    expandProjects([projectPath]);
-
-    const view = renderApp({ apiClient: env.orpc, metadata });
-
-    try {
-      await setupWorkspaceView(view, metadata, workspaceId);
-
-      // Wait for section to appear in UI
-      await waitForSection(view.container, sectionId);
-
-      // Verify section drop zone exists (for workspace drag-drop)
-      const sectionDropZone = findSectionDropZone(view.container, sectionId);
-      expect(sectionDropZone).not.toBeNull();
-
-      // Verify unsectioned drop zone exists when sections are present
-      const unsectionedZone = findUnsectionedDropZone(view.container);
-      expect(unsectionedZone).not.toBeNull();
-
-      // Verify workspace row exists and has data-section-id attribute
-      const workspaceRow = findWorkspaceRow(view.container, workspaceId);
-      expect(workspaceRow).not.toBeNull();
-      expect(workspaceRow!.hasAttribute("data-section-id")).toBe(true);
-
-      // Verify section has drag-related attribute for reordering
-      const sectionDragWrapper = view.container.querySelector(
-        `[data-section-drag-id="${sectionId}"]`
-      );
-      expect(sectionDragWrapper).not.toBeNull();
-    } finally {
-      await cleanupView(view, cleanupDom);
-      await env.orpc.workspace.remove({ workspaceId });
-      await env.orpc.projects.sections.remove({ projectPath, sectionId });
-    }
-  }, 60_000);
-
-  // ─────────────────────────────────────────────────────────────────────────────
-  // Workspace Creation with Section
-  // ─────────────────────────────────────────────────────────────────────────────
-
-  test("workspace created with sectionId is assigned to that section", async () => {
-    const env = getSharedEnv();
-    const projectPath = getSharedRepoPath();
-    const trunkBranch = await detectDefaultTrunkBranch(projectPath);
-
-    // Create workspace without section first to ensure project exists
-    const setupWs = await env.orpc.workspace.create({
-      projectPath,
-      branchName: generateBranchName("setup"),
-      trunkBranch,
-    });
-    if (!setupWs.success) throw new Error(`Setup failed: ${setupWs.error}`);
-
-    const sectionResult = await env.orpc.projects.sections.create({
-      projectPath,
-      name: "Target Section",
-    });
-    if (!sectionResult.success) throw new Error(`Failed to create section: ${sectionResult.error}`);
-    const sectionId = sectionResult.data.id;
-
-    let workspaceId: string | undefined;
-    try {
-      // Create workspace WITH sectionId
-      const wsResult = await env.orpc.workspace.create({
-        projectPath,
-        branchName: generateBranchName("test-create-in-section"),
-        trunkBranch,
-        sectionId,
-      });
-      if (!wsResult.success) throw new Error(`Failed to create workspace: ${wsResult.error}`);
-      workspaceId = wsResult.metadata.id;
-
-      // Verify workspace metadata has the sectionId
-      const workspaceInfo = await env.orpc.workspace.getInfo({ workspaceId });
-      expect(workspaceInfo?.sectionId).toBe(sectionId);
-    } finally {
-      if (workspaceId) await env.orpc.workspace.remove({ workspaceId });
-      await env.orpc.workspace.remove({ workspaceId: setupWs.metadata.id });
-      await env.orpc.projects.sections.remove({ projectPath, sectionId });
-    }
-  }, 60_000);
-
-  test("clicking section add button sets pending section for creation", async () => {
-    const env = getSharedEnv();
-    const projectPath = getSharedRepoPath();
-    const trunkBranch = await detectDefaultTrunkBranch(projectPath);
-
-    // Create workspace to ensure project exists (ORPC for setup is acceptable)
-    const setupWs = await env.orpc.workspace.create({
-      projectPath,
-      branchName: generateBranchName("setup-section-add"),
-      trunkBranch,
-    });
-    if (!setupWs.success) throw new Error(`Setup failed: ${setupWs.error}`);
-
-    // Create section BEFORE rendering so it's in the initial config
-    const sectionId = await createSectionViaAPI(env, projectPath, "Add Button Section");
-
-    const cleanupDom = installDom();
-    expandProjects([projectPath]);
-
-    const view = renderApp({ apiClient: env.orpc, metadata: setupWs.metadata });
-
-    try {
-      await setupWorkspaceView(view, setupWs.metadata, setupWs.metadata.id);
-
-      // Wait for section to render
-      await waitForSection(view.container, sectionId);
-
-      // Find the "+" button in the section header
-      const sectionHeader = view.container.querySelector(`[data-section-id="${sectionId}"]`);
-      expect(sectionHeader).not.toBeNull();
-
-      const addButton = sectionHeader!.querySelector('button[aria-label="New chat in section"]');
-      expect(addButton).not.toBeNull();
-
-      // Click the add button - this should navigate to create page with section context
-      // Wrap in act() to ensure React state updates are properly flushed
-      await act(async () => {
-        fireEvent.click(addButton as HTMLElement);
-      });
-
-      // Wait for the create page to show section selector with this section pre-selected
-      await waitFor(
-        () => {
-          const sectionSelector = view.container.querySelector('[data-testid="section-selector"]');
-          if (!sectionSelector) {
-            throw new Error("Section selector not found on create page");
-          }
-          const selectedValue = sectionSelector.getAttribute("data-selected-section");
-          if (selectedValue !== sectionId) {
-            throw new Error(`Expected section ${sectionId} to be selected, got ${selectedValue}`);
-          }
-        },
-        { timeout: 5_000 }
-      );
-
-      // The creation UI should allow clearing the selection (return to unsectioned).
-      const sectionSelector = view.container.querySelector('[data-testid="section-selector"]');
-      if (!sectionSelector) {
-        throw new Error("Section selector not found on create page (post-selection)");
-      }
-
-      const clearButton = sectionSelector.querySelector(
-        'button[aria-label="Clear section selection"]'
-      );
-      expect(clearButton).not.toBeNull();
-
-      await act(async () => {
-        fireEvent.click(clearButton as HTMLElement);
-      });
-
-      await waitFor(() => {
-        expect(sectionSelector.getAttribute("data-selected-section")).toBe("");
-      });
-    } finally {
-      await cleanupView(view, cleanupDom);
-      await env.orpc.workspace.remove({ workspaceId: setupWs.metadata.id });
-      await env.orpc.projects.sections.remove({ projectPath, sectionId });
-    }
-  }, 60_000);
-
-  test("fork API preserves section assignment", async () => {
-    const env = getSharedEnv();
-    const projectPath = getSharedRepoPath();
-    const trunkBranch = await detectDefaultTrunkBranch(projectPath);
-
-    // Create a workspace first to ensure the project is registered.
-    const setupWs = await env.orpc.workspace.create({
-      projectPath,
-      branchName: generateBranchName("setup-fork-section"),
-      trunkBranch,
-    });
-    if (!setupWs.success) throw new Error(`Setup failed: ${setupWs.error}`);
-
-    // Create a section and a workspace inside it.
-    const sectionId = await createSectionViaAPI(env, projectPath, "Fork Section");
-
-    let sourceWorkspaceId: string | undefined;
-    let forkedWorkspaceId: string | undefined;
-
-    try {
-      const sourceWsResult = await env.orpc.workspace.create({
-        projectPath,
-        branchName: generateBranchName("fork-section-source"),
-        trunkBranch,
-        sectionId,
-      });
-      if (!sourceWsResult.success) {
-        throw new Error(`Failed to create source workspace: ${sourceWsResult.error}`);
-      }
-
-      sourceWorkspaceId = sourceWsResult.metadata.id;
-
-      const forkedName = generateBranchName("forked-in-section");
-      const forkResult = await env.orpc.workspace.fork({
-        sourceWorkspaceId,
-        newName: forkedName,
-      });
-      if (!forkResult.success) {
-        throw new Error(`Failed to fork workspace: ${forkResult.error}`);
-      }
-
-      forkedWorkspaceId = forkResult.metadata.id;
-      expect(forkResult.metadata.sectionId).toBe(sectionId);
-    } finally {
-      // Best-effort cleanup: remove any workspaces still assigned to this section,
-      // even if the assertion failed before we captured forkedWorkspaceId.
-      const activeWorkspaces = await env.orpc.workspace.list();
-      const sectionWorkspaceIds = activeWorkspaces
-        .filter((workspace) => workspace.sectionId === sectionId)
-        .map((workspace) => workspace.id);
-
-      if (forkedWorkspaceId) {
-        sectionWorkspaceIds.push(forkedWorkspaceId);
-      }
-      if (sourceWorkspaceId) {
-        sectionWorkspaceIds.push(sourceWorkspaceId);
-      }
-
-      const uniqueWorkspaceIds = [...new Set(sectionWorkspaceIds)].filter(
-        (workspaceId) => workspaceId !== setupWs.metadata.id
-      );
-
-      for (const workspaceId of uniqueWorkspaceIds) {
-        await env.orpc.workspace.remove({ workspaceId }).catch(() => {});
-      }
-
-      await env.orpc.workspace.remove({ workspaceId: setupWs.metadata.id }).catch(() => {});
-      await env.orpc.projects.sections.remove({ projectPath, sectionId }).catch(() => {});
-    }
-  }, 60_000);
-  // ─────────────────────────────────────────────────────────────────────────────
-  // Section Reordering
-  // ─────────────────────────────────────────────────────────────────────────────
-
-  test("reorderSections API updates section order", async () => {
-    const env = getSharedEnv();
-    const projectPath = getSharedRepoPath();
-    const trunkBranch = await detectDefaultTrunkBranch(projectPath);
-
-    // Create a workspace to ensure project exists
-    const setupWs = await env.orpc.workspace.create({
-      projectPath,
-      branchName: generateBranchName("setup-reorder-api"),
-      trunkBranch,
-    });
-    if (!setupWs.success) throw new Error(`Setup failed: ${setupWs.error}`);
-
-    // Create three sections (they'll be in creation order: A, B, C)
-    const sectionA = await env.orpc.projects.sections.create({
-      projectPath,
-      name: "Section A",
-    });
-    if (!sectionA.success) throw new Error(`Failed to create section: ${sectionA.error}`);
-
-    const sectionB = await env.orpc.projects.sections.create({
-      projectPath,
-      name: "Section B",
-    });
-    if (!sectionB.success) throw new Error(`Failed to create section: ${sectionB.error}`);
-
-    const sectionC = await env.orpc.projects.sections.create({
-      projectPath,
-      name: "Section C",
-    });
-    if (!sectionC.success) throw new Error(`Failed to create section: ${sectionC.error}`);
-
-    try {
-      // Verify initial order for the sections created in this test.
-      let sections = await env.orpc.projects.sections.list({ projectPath });
-      const trackedSectionIds = [sectionA.data.id, sectionB.data.id, sectionC.data.id];
-      const trackedInitialOrder = sections
-        .filter((section) => trackedSectionIds.includes(section.id))
-        .map((section) => section.name);
-      expect(trackedInitialOrder).toEqual(["Section A", "Section B", "Section C"]);
-
-      // Reorder to C, A, B
-      const reorderResult = await env.orpc.projects.sections.reorder({
-        projectPath,
-        sectionIds: [sectionC.data.id, sectionA.data.id, sectionB.data.id],
-      });
-      expect(reorderResult.success).toBe(true);
-
-      // Verify new order for the sections created in this test.
-      sections = await env.orpc.projects.sections.list({ projectPath });
-      const trackedReordered = sections
-        .filter((section) => trackedSectionIds.includes(section.id))
-        .map((section) => section.name);
-      expect(trackedReordered).toEqual(["Section C", "Section A", "Section B"]);
-    } finally {
-      await env.orpc.workspace.remove({ workspaceId: setupWs.metadata.id });
-      await env.orpc.projects.sections.remove({ projectPath, sectionId: sectionA.data.id });
-      await env.orpc.projects.sections.remove({ projectPath, sectionId: sectionB.data.id });
-      await env.orpc.projects.sections.remove({ projectPath, sectionId: sectionC.data.id });
-    }
-  }, 60_000);
-
-  // Note: UI auto-refresh after reorder requires the full DnD flow which triggers
-  // ProjectContext.reorderSections -> refreshProjects(). Direct API calls bypass this.
-  // The sorting logic is unit-tested in workspaceFiltering.test.ts (sortSectionsByLinkedList).
-  // This test verifies initial render respects section order from backend.
-  test("sections render in linked-list order from config", async () => {
-    const env = getSharedEnv();
-    const projectPath = getSharedRepoPath();
-    const trunkBranch = await detectDefaultTrunkBranch(projectPath);
-
-    // Create a workspace to ensure project exists
-    const setupWs = await env.orpc.workspace.create({
-      projectPath,
-      branchName: generateBranchName("setup-section-order"),
-      trunkBranch,
-    });
-    if (!setupWs.success) throw new Error(`Setup failed: ${setupWs.error}`);
-
-    // Create two sections (will be in creation order: First, Second)
-    const sectionFirst = await env.orpc.projects.sections.create({
-      projectPath,
-      name: "First Section",
-    });
-    if (!sectionFirst.success) throw new Error(`Failed to create section: ${sectionFirst.error}`);
-
-    const sectionSecond = await env.orpc.projects.sections.create({
-      projectPath,
-      name: "Second Section",
-    });
-    if (!sectionSecond.success) throw new Error(`Failed to create section: ${sectionSecond.error}`);
-
-    const cleanupDom = installDom();
-    expandProjects([projectPath]);
-
-    const view = renderApp({ apiClient: env.orpc, metadata: setupWs.metadata });
-
-    try {
-      await setupWorkspaceView(view, setupWs.metadata, setupWs.metadata.id);
-
-      // Wait for sections to appear
-      await waitForSection(view.container, sectionFirst.data.id);
-      await waitForSection(view.container, sectionSecond.data.id);
-
-      // Verify DOM order matches linked-list order (First -> Second) for the
-      // sections created in this test. Other sections may exist from unrelated setup.
-      const orderedIds = getSectionIdsInOrder(view.container);
-      const trackedOrder = orderedIds.filter(
-        (id) => id === sectionFirst.data.id || id === sectionSecond.data.id
-      );
-      expect(trackedOrder).toEqual([sectionFirst.data.id, sectionSecond.data.id]);
-    } finally {
-      await cleanupView(view, cleanupDom);
-      await env.orpc.workspace.remove({ workspaceId: setupWs.metadata.id });
-      await env.orpc.projects.sections.remove({ projectPath, sectionId: sectionFirst.data.id });
-      await env.orpc.projects.sections.remove({ projectPath, sectionId: sectionSecond.data.id });
-    }
-  }, 60_000);
-
-  // ─────────────────────────────────────────────────────────────────────────────
-  // Section Removal Invariants
-  // ─────────────────────────────────────────────────────────────────────────────
-
-  test("removing section clears sectionId from active workspaces", async () => {
-    const env = getSharedEnv();
-    const projectPath = getSharedRepoPath();
-    const trunkBranch = await detectDefaultTrunkBranch(projectPath);
-
-    // Create a setup workspace first to ensure project is registered
-    const setupWs = await env.orpc.workspace.create({
-      projectPath,
-      branchName: generateBranchName("setup-removal"),
-      trunkBranch,
-    });
-    if (!setupWs.success) throw new Error(`Setup failed: ${setupWs.error}`);
-
-    // Create a section
-    const sectionResult = await env.orpc.projects.sections.create({
-      projectPath,
-      name: `test-section-${Date.now()}`,
-    });
-    expect(sectionResult.success).toBe(true);
-    const sectionId = sectionResult.success ? sectionResult.data.id : "";
-
-    // Create a workspace in that section
-    const wsResult = await env.orpc.workspace.create({
-      projectPath,
-      branchName: generateBranchName("section-removal-test"),
-      trunkBranch,
-      sectionId,
-    });
-    expect(wsResult.success).toBe(true);
-    const workspaceId = wsResult.success ? wsResult.metadata.id : "";
-
-    try {
-      // Verify workspace starts sectioned
-      let wsInfo = await env.orpc.workspace.getInfo({ workspaceId });
-      expect(wsInfo).not.toBeNull();
-      expect(wsInfo?.sectionId).toBe(sectionId);
-
-      // Remove section with active workspaces - should succeed and unsection the workspace
-      const removeResult = await env.orpc.projects.sections.remove({
-        projectPath,
-        sectionId,
-      });
-      expect(removeResult.success).toBe(true);
-
-      // Verify section was removed
-      const sections = await env.orpc.projects.sections.list({ projectPath });
-      expect(sections.some((section) => section.id === sectionId)).toBe(false);
-
-      // Verify workspace's sectionId is now cleared
-      wsInfo = await env.orpc.workspace.getInfo({ workspaceId });
-      expect(wsInfo).not.toBeNull();
-      expect(wsInfo?.sectionId).toBeUndefined();
-    } finally {
-      await env.orpc.workspace.remove({ workspaceId });
-      await env.orpc.workspace.remove({ workspaceId: setupWs.metadata.id });
-      await env.orpc.projects.sections.remove({ projectPath, sectionId }).catch(() => {});
-    }
-  }, 30_000);
-
-  test("removing section clears sectionId from archived workspaces", async () => {
-    const env = getSharedEnv();
-    const projectPath = getSharedRepoPath();
-    const trunkBranch = await detectDefaultTrunkBranch(projectPath);
-
-    // Create a setup workspace first to ensure project is registered
-    const setupWs = await env.orpc.workspace.create({
-      projectPath,
-      branchName: generateBranchName("setup-archive"),
-      trunkBranch,
-    });
-    if (!setupWs.success) throw new Error(`Setup failed: ${setupWs.error}`);
-
-    // Create a section
-    const sectionResult = await env.orpc.projects.sections.create({
-      projectPath,
-      name: `test-section-archive-${Date.now()}`,
-    });
-    expect(sectionResult.success).toBe(true);
-    const sectionId = sectionResult.success ? sectionResult.data.id : "";
-
-    // Create a workspace in that section
-    const wsResult = await env.orpc.workspace.create({
-      projectPath,
-      branchName: generateBranchName("archive-section-test"),
-      trunkBranch,
-      sectionId,
-    });
-    expect(wsResult.success).toBe(true);
-    const workspaceId = wsResult.success ? wsResult.metadata.id : "";
-
-    try {
-      // Archive the workspace
-      const archiveResult = await env.orpc.workspace.archive({ workspaceId });
-      expect(archiveResult.success).toBe(true);
-
-      // Verify workspace is archived and has sectionId
-      let wsInfo = await env.orpc.workspace.getInfo({ workspaceId });
-      expect(wsInfo).not.toBeNull();
-      expect(wsInfo?.sectionId).toBe(sectionId);
-      expect(wsInfo?.archivedAt).toBeDefined();
-
-      // Now remove the section - should succeed since workspace is archived
-      const removeResult = await env.orpc.projects.sections.remove({
-        projectPath,
-        sectionId,
-      });
-      expect(removeResult.success).toBe(true);
-
-      // Verify workspace's sectionId is now cleared
-      wsInfo = await env.orpc.workspace.getInfo({ workspaceId });
-      expect(wsInfo).not.toBeNull();
-      expect(wsInfo?.sectionId).toBeUndefined();
-    } finally {
-      await env.orpc.workspace.remove({ workspaceId });
-      await env.orpc.workspace.remove({ workspaceId: setupWs.metadata.id });
-      // Section already removed in test, but try anyway in case test failed early
-      await env.orpc.projects.sections.remove({ projectPath, sectionId }).catch(() => {});
-    }
-  }, 30_000);
-
-  // ─────────────────────────────────────────────────────────────────────────────
-  // Section Deletion Confirmation Flow
-  // ─────────────────────────────────────────────────────────────────────────────
-
-  test("clicking delete on section with active workspaces confirms and unsections workspaces", async () => {
-    const env = getSharedEnv();
-    const projectPath = getSharedRepoPath();
-    const trunkBranch = await detectDefaultTrunkBranch(projectPath);
-
-    // Create a setup workspace first to ensure project is registered
-    const setupWs = await env.orpc.workspace.create({
-      projectPath,
-      branchName: generateBranchName("setup-delete-confirm"),
-      trunkBranch,
-    });
-    if (!setupWs.success) throw new Error(`Setup failed: ${setupWs.error}`);
-
-    // Create a section
-    const sectionResult = await env.orpc.projects.sections.create({
-      projectPath,
-      name: `test-delete-confirm-${Date.now()}`,
-    });
-    expect(sectionResult.success).toBe(true);
-    const sectionId = sectionResult.success ? sectionResult.data.id : "";
-
-    // Create a workspace in that section (active, not archived)
-    const wsResult = await env.orpc.workspace.create({
-      projectPath,
-      branchName: generateBranchName("in-section-delete-confirm"),
-      trunkBranch,
-      sectionId,
-    });
-    expect(wsResult.success).toBe(true);
-    const workspaceId = wsResult.success ? wsResult.metadata.id : "";
-    const metadata = wsResult.success ? wsResult.metadata : setupWs.metadata;
-
-    const cleanupDom = installDom();
-    expandProjects([projectPath]);
-
-    const view = renderApp({ apiClient: env.orpc, metadata });
-
-    try {
-      await setupWorkspaceView(view, metadata, workspaceId);
-
-      // Wait for section and workspace to appear in UI as sectioned
-      await waitForSection(view.container, sectionId);
-      const workspaceRowBeforeDelete = findWorkspaceRow(view.container, workspaceId);
-      expect(workspaceRowBeforeDelete).not.toBeNull();
-      expect(workspaceRowBeforeDelete?.getAttribute("data-section-id")).toBe(sectionId);
-
-      // Open section actions and click Delete section
-      const sectionElement = view.container.querySelector(`[data-section-id="${sectionId}"]`);
-      expect(sectionElement).not.toBeNull();
-
-      // Hover over section to reveal action controls.
-      fireEvent.mouseEnter(sectionElement!);
-
-      const sectionActionsButton = sectionElement!.querySelector('[aria-label="Section actions"]');
-      expect(sectionActionsButton).not.toBeNull();
-      fireEvent.click(sectionActionsButton!);
-
-      const deleteButton = await waitFor(
-        () => {
-          const buttons = Array.from(view.container.ownerDocument.body.querySelectorAll("button"));
-          const button = buttons.find((candidate) =>
-            candidate.textContent?.trim().startsWith("Delete section")
-          );
-          if (!button) throw new Error("Delete section menu item not found");
-          return button as HTMLButtonElement;
-        },
-        { timeout: 5_000 }
-      );
-      expect(deleteButton).not.toBeNull();
-      fireEvent.click(deleteButton);
-
-      // Confirm the deletion warning for active workspaces
-      const confirmDialog = await waitFor(
-        () => {
-          const dialog = view.container.ownerDocument.body.querySelector(
-            '[role="dialog"], [role="alertdialog"]'
-          );
-          if (!dialog) throw new Error("Delete confirmation dialog not found");
-
-          const dialogText = dialog.textContent ?? "";
-          if (!dialogText.includes("Delete section?")) {
-            throw new Error(`Expected delete confirmation title, got: ${dialogText}`);
-          }
-          if (!dialogText.includes("will be moved to unsectioned")) {
-            throw new Error(`Expected unsection warning, got: ${dialogText}`);
-          }
-
-          return dialog as HTMLElement;
-        },
-        { timeout: 5_000 }
-      );
-
-      const confirmDeleteButton = Array.from(confirmDialog.querySelectorAll("button")).find(
-        (button) => button.textContent?.includes("Delete")
-      );
-      if (!confirmDeleteButton) {
-        throw new Error("Delete confirmation button not found");
-      }
-      fireEvent.click(confirmDeleteButton);
-
-      // Section should be removed from UI
-      await waitFor(
-        () => {
-          const removedSection = view.container.querySelector(`[data-section-id="${sectionId}"]`);
-          if (removedSection) throw new Error("Section was not removed from the sidebar");
-        },
-        { timeout: 5_000 }
-      );
-
-      // Workspace should remain but become unsectioned
-      await waitFor(
-        () => {
-          const workspaceRow = findWorkspaceRow(view.container, workspaceId);
-          if (!workspaceRow) throw new Error("Workspace row not found after deleting section");
-
-          const updatedSectionId = workspaceRow.getAttribute("data-section-id");
-          if (updatedSectionId !== "") {
-            throw new Error(
-              `Expected workspace to be unsectioned, got data-section-id=${updatedSectionId}`
-            );
-          }
-        },
-        { timeout: 5_000 }
-      );
-
-      // Backend should reflect the unsectioned workspace as well
-      const wsInfoAfterDelete = await env.orpc.workspace.getInfo({ workspaceId });
-      expect(wsInfoAfterDelete).not.toBeNull();
-      expect(wsInfoAfterDelete?.sectionId).toBeUndefined();
-    } finally {
-      await cleanupView(view, cleanupDom);
-      await env.orpc.workspace.remove({ workspaceId });
-      await env.orpc.workspace.remove({ workspaceId: setupWs.metadata.id });
-      await env.orpc.projects.sections.remove({ projectPath, sectionId }).catch(() => {});
-    }
-  }, 60_000);
-});