From bca27d99885060832b490a80d94cc7018571eaa9 Mon Sep 17 00:00:00 2001
From: Ammar <ammar+ai@ammar.io>
Date: Sat, 2 May 2026 14:15:37 -0500
Subject: [PATCH 1/8] Replace sections with sub-projects

---
 src/browser/App.tsx                           |   6 +-
 .../ProjectCreateModal/ProjectCreateModal.tsx |  14 +-
 .../ProjectPage/ProjectPage.stories.tsx       |  66 +-
 .../components/ProjectPage/ProjectPage.tsx    |  10 +-
 .../ProjectSidebar/ProjectSidebar.test.tsx    | 158 +---
 .../ProjectSidebar/ProjectSidebar.tsx         | 134 ++-
 .../SectionHeader/SectionHeader.test.tsx      | 230 ------
 .../SectionHeader/SectionHeader.tsx           |  20 +-
 src/browser/contexts/ProjectContext.test.tsx  |   9 +-
 src/browser/contexts/ProjectContext.tsx       | 111 +--
 src/browser/contexts/RouterContext.tsx        |  16 +-
 src/browser/contexts/ThinkingContext.test.tsx |   4 +-
 src/browser/contexts/WorkspaceContext.tsx     | 135 +--
 .../features/ChatInput/CreationControls.tsx   | 144 +---
 src/browser/features/ChatInput/index.tsx      |  94 +--
 src/browser/features/ChatInput/types.ts       |   4 +-
 .../ChatInput/useCreationWorkspace.ts         |  10 +-
 .../stories/App.phoneViewports.stories.tsx    |  26 +-
 src/browser/stories/helpers/drafts.ts         |  11 +-
 src/browser/utils/commands/sources.ts         |  15 +-
 .../utils/ui/workspaceFiltering.test.ts       | 144 +---
 src/browser/utils/ui/workspaceFiltering.ts    |  13 +-
 src/browser/utils/workspace.ts                |   2 +-
 src/common/constants/storage.ts               |   2 +-
 src/common/orpc/schemas.ts                    |   2 +-
 src/common/orpc/schemas/api.ts                |  45 +-
 src/common/orpc/schemas/project.ts            |   6 +-
 src/common/orpc/schemas/workspace.ts          |   5 +-
 src/common/schemas/project.ts                 |  35 +-
 src/common/types/deepLink.ts                  |   1 -
 src/common/types/project.ts                   |   8 +-
 src/common/utils/deepLink.test.ts             |   3 +-
 src/common/utils/deepLink.ts                  |   3 -
 src/common/utils/sections.ts                  |  39 -
 src/common/utils/subProjects.test.ts          |  75 ++
 src/common/utils/subProjects.ts               |  98 +++
 src/node/config.ts                            |  35 +-
 src/node/orpc/router.ts                       |  44 +-
 src/node/runtime/runtimeHelpers.test.ts       |  18 +
 src/node/runtime/runtimeHelpers.ts            |  31 +-
 src/node/services/projectService.ts           | 337 ++++----
 src/node/services/systemMessage.test.ts       |  25 +-
 src/node/services/systemMessage.ts            |  55 +-
 src/node/services/workspaceService.ts         |  74 +-
 tests/ui/chat/sections.test.ts                | 774 ------------------
 45 files changed, 833 insertions(+), 2258 deletions(-)
 delete mode 100644 src/browser/components/SectionHeader/SectionHeader.test.tsx
 delete mode 100644 src/common/utils/sections.ts
 create mode 100644 src/common/utils/subProjects.test.ts
 create mode 100644 src/common/utils/subProjects.ts
 delete mode 100644 tests/ui/chat/sections.test.ts

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..e8b843e921 100644
--- a/src/browser/components/ProjectCreateModal/ProjectCreateModal.tsx
+++ b/src/browser/components/ProjectCreateModal/ProjectCreateModal.tsx
@@ -68,6 +68,7 @@ function useDirectoryPicker(params: {
 }
 
 interface ProjectCreateModalProps {
+  initialPath?: string;
   isOpen: boolean;
   onClose: () => void;
   onSuccess: (normalizedPath: string, projectConfig: ProjectConfig) => void;
@@ -75,6 +76,8 @@ 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 +105,7 @@ export interface ProjectCreateFormHandle {
 export const ProjectCreateForm = React.forwardRef<ProjectCreateFormHandle, ProjectCreateFormProps>(
   function ProjectCreateForm(
     {
+      initialPath,
       onSuccess,
       onClose,
       showCancelButton = false,
@@ -116,10 +120,14 @@ 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 +784,7 @@ export interface ProjectAddFormHandle {
 }
 
 interface ProjectAddFormProps {
+  initialPath?: string;
   onSuccess: (normalizedPath: string, projectConfig: ProjectConfig) => void;
   onClose?: () => void;
   isOpen: boolean;
@@ -912,6 +921,7 @@ export const ProjectAddForm = React.forwardRef<ProjectAddFormHandle, ProjectAddF
 
           {mode === "pick-folder" ? (
             <ProjectCreateForm
+              initialPath={props.initialPath}
               ref={projectCreateFormRef}
               onSuccess={props.onSuccess}
               onClose={props.onClose}
@@ -960,6 +970,7 @@ 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 +995,7 @@ 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..28dbdd318b 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">
@@ -189,7 +193,7 @@ 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 +201,7 @@ 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 +221,12 @@ 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 +262,7 @@ 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 +303,7 @@ 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/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..6f245d22ae 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 +867,13 @@ 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 pendingNewWorkspaceSubProjectPath =
+    pendingNewWorkspaceProject && pendingNewWorkspaceDraftId
+      ? ((workspaceDraftsByProject[pendingNewWorkspaceProject] ?? []).find(
+          (draft) => draft.draftId === pendingNewWorkspaceDraftId
+        )?.subProjectPath ?? null)
+      : null;
 
   // selectedWorkspace is derived from currentWorkspaceId in URL + workspaceMetadata
   const selectedWorkspace = useMemo(() => {
@@ -1531,19 +1540,21 @@ 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 +1568,13 @@ 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 +1588,13 @@ 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 +1602,15 @@ 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 +1620,7 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
       const createdAt = Date.now();
       const draft: WorkspaceDraft = {
         draftId,
-        sectionId: sectionId ?? null,
+        subProjectPath: subProjectPath ?? null,
         createdAt,
       };
 
@@ -1635,7 +1650,7 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
         };
       });
 
-      navigateToProject(projectPath, sectionId, draftId, { replace: options?.replace });
+      navigateToProject(projectPath, draftId, { replace: options?.replace });
     },
     [navigateToProject, setWorkspaceDraftsByProjectState]
   );
@@ -1679,7 +1694,7 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
         return;
       }
 
-      navigateToProject(fallbackProjectPath, undefined, undefined, { replace: true });
+      navigateToProject(fallbackProjectPath, undefined, { replace: true });
     };
 
     void resolveStartupRootRoute();
@@ -1708,14 +1723,12 @@ 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 +1792,14 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
       selectedWorkspace,
       setSelectedWorkspace,
       pendingNewWorkspaceProject,
-      pendingNewWorkspaceSectionId,
+      pendingNewWorkspaceSubProjectPath,
       pendingNewWorkspaceDraftId,
       beginWorkspaceCreation,
       workspaceDraftsByProject,
       workspaceDraftPromotionsByProject,
       promoteWorkspaceDraft,
       createWorkspaceDraft,
-      updateWorkspaceDraftSection,
+      updateWorkspaceDraftSubProject,
       openWorkspaceDraft,
       deleteWorkspaceDraft,
       getWorkspaceInfo,
@@ -1803,14 +1816,14 @@ 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..83022d1797 100644
--- a/src/browser/features/ChatInput/CreationControls.tsx
+++ b/src/browser/features/ChatInput/CreationControls.tsx
@@ -20,7 +20,7 @@ import {
   SelectTrigger,
   SelectValue,
 } from "@/browser/components/SelectPrimitive/SelectPrimitive";
-import { Blocks, Cog, GitBranch, Loader2, Wand2, X } from "lucide-react";
+import { Blocks, Cog, GitBranch, Loader2, Wand2 } from "lucide-react";
 import { PlatformPaths } from "@/common/utils/paths";
 import { useProjectContext } from "@/browser/contexts/ProjectContext";
 import { useSettings } from "@/browser/contexts/SettingsContext";
@@ -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,
@@ -128,12 +126,6 @@ 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 +313,6 @@ 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;
@@ -939,35 +824,8 @@ 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..b53299247d 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 +831,11 @@ const ChatInputInner: React.FC<ChatInputProps> = (props) => {
           onSelectedRuntimeChange: creationState.setSelectedRuntime,
           onSetDefaultRuntime: creationState.setDefaultRuntimeChoice,
           disabled: isSendInFlight,
-          projectPath: props.projectPath,
+          projectPath: creationParentProjectPath || 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..686214d6ed 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 {
@@ -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/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..1366ab80c7 100644
--- a/src/node/orpc/router.ts
+++ b/src/node/orpc/router.ts
@@ -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..bf40efda1d 100644
--- a/src/node/runtime/runtimeHelpers.test.ts
+++ b/src/node/runtime/runtimeHelpers.test.ts
@@ -120,6 +120,24 @@ 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"
+  );
+});
+
 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..3879533d50 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 +35,38 @@ export function resolveWorkspaceExecutionPath(
   metadata: WorkspaceMetadataForRuntime,
   runtime: Runtime
 ): string {
+  const appendSubProjectRelativePath = (workspaceRoot: string): string => {
+    const subProjectPath = metadata.subProjectPath?.trim();
+    if (!subProjectPath) {
+      return workspaceRoot;
+    }
+
+    const relativeSubProjectPath = path.relative(metadata.projectPath, subProjectPath);
+    assert(
+      relativeSubProjectPath &&
+        !relativeSubProjectPath.startsWith("..") &&
+        !path.isAbsolute(relativeSubProjectPath),
+      `Sub-project ${subProjectPath} is not inside project ${metadata.projectPath}`
+    );
+
+    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 +80,7 @@ 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 +91,7 @@ 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..0216287cdd 100644
--- a/src/node/services/projectService.ts
+++ b/src/node/services/projectService.ts
@@ -1,7 +1,4 @@
 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";
@@ -34,6 +31,7 @@ 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";
 
@@ -316,6 +314,54 @@ 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>;
@@ -396,11 +442,66 @@ 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 +541,11 @@ 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 +937,25 @@ 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 +1077,24 @@ 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 +1111,7 @@ 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 [];
@@ -1235,175 +1375,14 @@ 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 +1392,24 @@ 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/systemMessage.test.ts b/src/node/services/systemMessage.test.ts
index f8a083adfb..6bcec72677 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", () => {
@@ -271,9 +276,9 @@ 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: 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 () => {
@@ -419,9 +424,11 @@ 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 () => {
diff --git a/src/node/services/systemMessage.ts b/src/node/services/systemMessage.ts
index 15f4ce179e..1ca0dee851 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 +329,22 @@ async function readMultiProjectContextInstructions(
   return contextSegments.length > 0 ? contextSegments.join("\n\n") : null;
 }
 
+async function readSingleProjectContextInstructions(
+  metadata: WorkspaceMetadata,
+  runtime: Runtime,
+  workspacePath: string
+): Promise<string | null> {
+  const projectSegments = await Promise.all([
+    readInstructionSet(metadata.projectPath),
+    metadata.subProjectPath ? readInstructionSet(metadata.subProjectPath) : Promise.resolve(null),
+    readInstructionSetFromRuntime(runtime, workspacePath),
+  ]);
+  const contextSegments = projectSegments.filter(
+    (segment): segment is string => segment != null && segment.trim().length > 0
+  );
+  return contextSegments.length > 0 ? contextSegments.join("\n\n") : null;
+}
+
 /**
  * Read instruction sets from global and context sources.
  * Internal helper for buildSystemMessage and extractToolInstructions.
@@ -366,8 +366,7 @@ 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 +434,7 @@ 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 +455,10 @@ 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/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);
-});

From faccf4f8506a2d68474eaea618da798613ecd0f8 Mon Sep 17 00:00:00 2001
From: Ammar <ammar+ai@ammar.io>
Date: Sun, 3 May 2026 11:01:07 -0500
Subject: [PATCH 2/8] Sub-projects follow-ups: browse defaults, click
 navigation, hierarchy labels

---
 .../ProjectCreateModal/ProjectCreateModal.tsx  |  6 ++++--
 .../components/SectionHeader/SectionHeader.tsx |  6 +++++-
 .../WorkspaceMenuBar/WorkspaceMenuBar.test.tsx |  7 +++++++
 .../WorkspaceMenuBar/WorkspaceMenuBar.tsx      | 14 +++++++++++++-
 src/common/orpc/schemas/api.ts                 |  2 +-
 src/desktop/main.ts                            | 18 +++++++++++++++++-
 src/node/orpc/router.ts                        |  4 ++--
 src/node/services/projectService.ts            |  8 ++++----
 src/node/services/serviceContainer.ts          |  2 +-
 9 files changed, 54 insertions(+), 13 deletions(-)

diff --git a/src/browser/components/ProjectCreateModal/ProjectCreateModal.tsx b/src/browser/components/ProjectCreateModal/ProjectCreateModal.tsx
index e8b843e921..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
diff --git a/src/browser/components/SectionHeader/SectionHeader.tsx b/src/browser/components/SectionHeader/SectionHeader.tsx
index 28dbdd318b..8279961395 100644
--- a/src/browser/components/SectionHeader/SectionHeader.tsx
+++ b/src/browser/components/SectionHeader/SectionHeader.tsx
@@ -172,7 +172,11 @@ export const SectionHeader: React.FC<SectionHeaderProps> = ({
         />
       ) : (
         <button
-          onClick={onToggleExpand}
+          // 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.
+          onClick={onAddWorkspace}
           onDoubleClick={startEditing}
           className={cn(
             "min-w-0 flex-1 cursor-pointer truncate border-none bg-transparent p-0 text-left text-xs font-medium",
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/common/orpc/schemas/api.ts b/src/common/orpc/schemas/api.ts
index 686214d6ed..cf6669549c 100644
--- a/src/common/orpc/schemas/api.ts
+++ b/src/common/orpc/schemas/api.ts
@@ -629,7 +629,7 @@ export const projects = {
     ),
   },
   pickDirectory: {
-    input: z.void(),
+    input: z.object({ initialPath: z.string().nullish() }).nullish(),
     output: z.string().nullable(),
   },
   remove: {
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/orpc/router.ts b/src/node/orpc/router.ts
index 1366ab80c7..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)
diff --git a/src/node/services/projectService.ts b/src/node/services/projectService.ts
index 0216287cdd..f0c90067a8 100644
--- a/src/node/services/projectService.ts
+++ b/src/node/services/projectService.ts
@@ -364,7 +364,7 @@ function hasRegisteredSubProjectAncestor(
 
 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;
 
@@ -379,13 +379,13 @@ 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(
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);
   }
 

From d4126c53e09514adea1700fe6c717c5aa625543d Mon Sep 17 00:00:00 2001
From: Ammar <ammar+ai@ammar.io>
Date: Sun, 3 May 2026 11:11:59 -0500
Subject: [PATCH 3/8] Sub-projects: hierarchy in dropdown + git-init banner
 respects ancestors

---
 .../features/ChatInput/CreationControls.tsx   | 87 ++++++++++++-------
 src/browser/features/ChatInput/index.tsx      |  4 +
 src/node/services/projectService.ts           | 14 ++-
 src/node/utils/pathUtils.ts                   | 20 +++++
 4 files changed, 89 insertions(+), 36 deletions(-)

diff --git a/src/browser/features/ChatInput/CreationControls.tsx b/src/browser/features/ChatInput/CreationControls.tsx
index 83022d1797..28158756ab 100644
--- a/src/browser/features/ChatInput/CreationControls.tsx
+++ b/src/browser/features/ChatInput/CreationControls.tsx
@@ -21,8 +21,8 @@ import {
   SelectValue,
 } from "@/browser/components/SelectPrimitive/SelectPrimitive";
 import { Blocks, Cog, GitBranch, Loader2, Wand2 } from "lucide-react";
-import { PlatformPaths } from "@/common/utils/paths";
 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";
@@ -116,8 +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 */
@@ -725,41 +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. */}
diff --git a/src/browser/features/ChatInput/index.tsx b/src/browser/features/ChatInput/index.tsx
index b53299247d..fcf54474ec 100644
--- a/src/browser/features/ChatInput/index.tsx
+++ b/src/browser/features/ChatInput/index.tsx
@@ -832,6 +832,10 @@ const ChatInputInner: React.FC<ChatInputProps> = (props) => {
           onSetDefaultRuntime: creationState.setDefaultRuntimeChoice,
           disabled: isSendInFlight,
           projectPath: creationParentProjectPath || props.projectPath,
+          // Surface the route-level project (possibly a sub-project) to the
+          // dropdown so the trigger label reflects what the user actually
+          // picked, while runtime/settings scoping stays on the parent above.
+          selectedProjectPath: props.projectPath,
           projectName: props.projectName,
           nameState: creationState.nameState,
           runtimeAvailabilityState: creationState.runtimeAvailabilityState,
diff --git a/src/node/services/projectService.ts b/src/node/services/projectService.ts
index f0c90067a8..6a6f3c0bb4 100644
--- a/src/node/services/projectService.ts
+++ b/src/node/services/projectService.ts
@@ -2,7 +2,12 @@ import type { Config, ProjectConfig } from "@/node/config";
 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";
@@ -1129,8 +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 };
       }
 
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`.
  *

From 1db7f35f213713122475baf3892a2cddde24c855 Mon Sep 17 00:00:00 2001
From: Ammar <ammar+ai@ammar.io>
Date: Sun, 3 May 2026 11:15:32 -0500
Subject: [PATCH 4/8] Sub-projects: scope new-chat dropdown to sub-project when
 set via draft

---
 src/browser/features/ChatInput/index.tsx | 12 ++++++++----
 1 file changed, 8 insertions(+), 4 deletions(-)

diff --git a/src/browser/features/ChatInput/index.tsx b/src/browser/features/ChatInput/index.tsx
index fcf54474ec..f3864b8c50 100644
--- a/src/browser/features/ChatInput/index.tsx
+++ b/src/browser/features/ChatInput/index.tsx
@@ -832,10 +832,14 @@ const ChatInputInner: React.FC<ChatInputProps> = (props) => {
           onSetDefaultRuntime: creationState.setDefaultRuntimeChoice,
           disabled: isSendInFlight,
           projectPath: creationParentProjectPath || props.projectPath,
-          // Surface the route-level project (possibly a sub-project) to the
-          // dropdown so the trigger label reflects what the user actually
-          // picked, while runtime/settings scoping stays on the parent above.
-          selectedProjectPath: 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,

From 74e14c2a8d496e34f9ae74d45435b91c6f55561b Mon Sep 17 00:00:00 2001
From: Ammar <ammar+ai@ammar.io>
Date: Sun, 3 May 2026 11:44:59 -0500
Subject: [PATCH 5/8] Sub-projects: address Codex review (P1+P2)

- SectionHeader: drop double-click rename (raced with click-to-create-draft); rename remains on the kebab menu.
- WorkspaceContext: scrub stale subProjectPath from drafts when the sub-project has been removed; fall back to parent cwd so reopening a draft doesn't fail with 'Sub-project not found'.
---
 .../components/SectionHeader/SectionHeader.tsx        |  5 +++--
 src/browser/contexts/WorkspaceContext.tsx             | 11 ++++++++++-
 2 files changed, 13 insertions(+), 3 deletions(-)

diff --git a/src/browser/components/SectionHeader/SectionHeader.tsx b/src/browser/components/SectionHeader/SectionHeader.tsx
index 8279961395..7147786dcd 100644
--- a/src/browser/components/SectionHeader/SectionHeader.tsx
+++ b/src/browser/components/SectionHeader/SectionHeader.tsx
@@ -175,9 +175,10 @@ export const SectionHeader: React.FC<SectionHeaderProps> = ({
           // 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.
+          // 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}
-          onDoubleClick={startEditing}
           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"
diff --git a/src/browser/contexts/WorkspaceContext.tsx b/src/browser/contexts/WorkspaceContext.tsx
index 6f245d22ae..b1f6919999 100644
--- a/src/browser/contexts/WorkspaceContext.tsx
+++ b/src/browser/contexts/WorkspaceContext.tsx
@@ -868,12 +868,21 @@ export function WorkspaceProvider(props: WorkspaceProviderProps) {
   // pendingNewWorkspaceProject is derived from current project in URL/state
   const pendingNewWorkspaceProject = currentProjectPath;
   const pendingNewWorkspaceDraftId = pendingNewWorkspaceProject ? pendingDraftId : null;
-  const pendingNewWorkspaceSubProjectPath =
+  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(() => {

From 4bb787adb14aa6f960920b242b85d3a7565ad20f Mon Sep 17 00:00:00 2001
From: Ammar <ammar+ai@ammar.io>
Date: Sun, 3 May 2026 11:54:07 -0500
Subject: [PATCH 6/8] Sub-projects: self-heal stale subProjectPath in runtime
 cwd resolution

---
 src/node/runtime/runtimeHelpers.test.ts | 20 ++++++++++++++++++++
 src/node/runtime/runtimeHelpers.ts      | 19 +++++++++++++------
 2 files changed, 33 insertions(+), 6 deletions(-)

diff --git a/src/node/runtime/runtimeHelpers.test.ts b/src/node/runtime/runtimeHelpers.test.ts
index bf40efda1d..61aea16c59 100644
--- a/src/node/runtime/runtimeHelpers.test.ts
+++ b/src/node/runtime/runtimeHelpers.test.ts
@@ -138,6 +138,26 @@ it("appends sub-project relative paths to the execution root", () => {
   );
 });
 
+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 3879533d50..997eccaf5f 100644
--- a/src/node/runtime/runtimeHelpers.ts
+++ b/src/node/runtime/runtimeHelpers.ts
@@ -41,13 +41,20 @@ export function resolveWorkspaceExecutionPath(
       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);
-    assert(
-      relativeSubProjectPath &&
-        !relativeSubProjectPath.startsWith("..") &&
-        !path.isAbsolute(relativeSubProjectPath),
-      `Sub-project ${subProjectPath} is not inside project ${metadata.projectPath}`
-    );
+    if (
+      !relativeSubProjectPath ||
+      relativeSubProjectPath.startsWith("..") ||
+      path.isAbsolute(relativeSubProjectPath)
+    ) {
+      return workspaceRoot;
+    }
 
     const runtimeRelativeSubProjectPath = relativeSubProjectPath.replace(/\\/g, "/");
 

From d92430eefec79cff0c2fcb1cbe36cdee89e34786 Mon Sep 17 00:00:00 2001
From: Ammar <ammar+ai@ammar.io>
Date: Sun, 3 May 2026 12:03:34 -0500
Subject: [PATCH 7/8] Sub-projects: read AGENTS.md from workspace checkout, not
 host project dir

Worktree/SSH/Docker workspaces have their own checkout. Reading AGENTS.md
from the parent's host directory mixed stale guidance from the parent
checkout into prompts and prevented the workspace branch from overriding
parent guidance. Switch single-project (incl. sub-project) instruction
loading to use the runtime view rooted at workspaceRoot, matching how
multi-project already prefers runtime-mounted reads. Sub-project segment
uses the workspaceRoot-relative path; bad/non-descendant subProjectPath
self-heals to parent-only instructions.
---
 src/node/services/systemMessage.test.ts | 12 ++++-----
 src/node/services/systemMessage.ts      | 36 ++++++++++++++++++++++---
 2 files changed, 38 insertions(+), 10 deletions(-)

diff --git a/src/node/services/systemMessage.test.ts b/src/node/services/systemMessage.test.ts
index 6bcec72677..f93efbe734 100644
--- a/src/node/services/systemMessage.test.ts
+++ b/src/node/services/systemMessage.test.ts
@@ -193,7 +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.
@@ -283,7 +283,7 @@ From secondary repo: prefer rg --files before find.
 
   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.
@@ -324,7 +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.
 `
@@ -396,7 +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.
 `
@@ -433,7 +433,7 @@ From agent: Be terse.
 
     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.
 `
@@ -518,7 +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 1ca0dee851..9f3a204428 100644
--- a/src/node/services/systemMessage.ts
+++ b/src/node/services/systemMessage.ts
@@ -334,17 +334,45 @@ async function readSingleProjectContextInstructions(
   runtime: Runtime,
   workspacePath: string
 ): Promise<string | null> {
-  const projectSegments = await Promise.all([
-    readInstructionSet(metadata.projectPath),
-    metadata.subProjectPath ? readInstructionSet(metadata.subProjectPath) : Promise.resolve(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;
+
+  const [parentInstructions, subProjectInstructions] = await Promise.all([
     readInstructionSetFromRuntime(runtime, workspacePath),
+    subProjectRelativePath
+      ? readInstructionSetFromRuntime(runtime, path.join(workspacePath, subProjectRelativePath))
+      : Promise.resolve(null),
   ]);
-  const contextSegments = projectSegments.filter(
+
+  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.

From f9e28bbf57338c04cd4b70eea78f6b9f092ef10b Mon Sep 17 00:00:00 2001
From: Ammar <ammar+ai@ammar.io>
Date: Sun, 3 May 2026 12:09:24 -0500
Subject: [PATCH 8/8] Sub-projects: normalize sub-project AGENTS.md path for
 non-local runtimes

path.relative emits host-native separators, but SSH/Docker/devcontainer
runtimes read files via POSIX paths. Convert backslashes to forward
slashes and use runtime.normalizePath so Windows hosts using remote
runtimes still resolve the sub-project AGENTS.md location.
---
 src/node/services/systemMessage.ts | 11 +++++++++--
 1 file changed, 9 insertions(+), 2 deletions(-)

diff --git a/src/node/services/systemMessage.ts b/src/node/services/systemMessage.ts
index 9f3a204428..e113f96a23 100644
--- a/src/node/services/systemMessage.ts
+++ b/src/node/services/systemMessage.ts
@@ -345,10 +345,17 @@ async function readSingleProjectContextInstructions(
     ? 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),
-    subProjectRelativePath
-      ? readInstructionSetFromRuntime(runtime, path.join(workspacePath, subProjectRelativePath))
+    subProjectInstructionsDir
+      ? readInstructionSetFromRuntime(runtime, subProjectInstructionsDir)
       : Promise.resolve(null),
   ]);