From d1b7e5ae9a92d53e97815305a1da8a99aeb29148 Mon Sep 17 00:00:00 2001
From: Joey Krug <joeykrug@gmail.com>
Date: Sat, 14 Mar 2026 18:07:18 -0400
Subject: [PATCH] fix: trigger timeout compaction for real timeouts

---
 .../run.timeout-triggered-compaction.test.ts     | 16 +++++++++++++---
 src/agents/pi-embedded-runner/run.ts             |  9 +++++----
 2 files changed, 18 insertions(+), 7 deletions(-)

diff --git a/src/agents/pi-embedded-runner/run.timeout-triggered-compaction.test.ts b/src/agents/pi-embedded-runner/run.timeout-triggered-compaction.test.ts
index c5d4ea5d1ad..bccae68bfeb 100644
--- a/src/agents/pi-embedded-runner/run.timeout-triggered-compaction.test.ts
+++ b/src/agents/pi-embedded-runner/run.timeout-triggered-compaction.test.ts
@@ -198,7 +198,7 @@ describe("timeout-triggered compaction", () => {
     expect(result.payloads?.[0]?.text).toContain("timed out");
   });
 
-  it("does not attempt compaction when aborted", async () => {
+  it("still attempts compaction for timed-out attempts that set aborted", async () => {
     mockedRunEmbeddedAttempt.mockResolvedValueOnce(
       makeAttemptResult({
         timedOut: true,
@@ -208,10 +208,20 @@ describe("timeout-triggered compaction", () => {
         } as never,
       }),
     );
+    mockedCompactDirect.mockResolvedValueOnce(
+      makeCompactionSuccess({
+        summary: "timeout recovery compaction",
+        tokensBefore: 180000,
+        tokensAfter: 90000,
+      }),
+    );
+    mockedRunEmbeddedAttempt.mockResolvedValueOnce(makeAttemptResult({ promptError: null }));
 
-    await runEmbeddedPiAgent(overflowBaseRunParams);
+    const result = await runEmbeddedPiAgent(overflowBaseRunParams);
 
-    expect(mockedCompactDirect).not.toHaveBeenCalled();
+    expect(mockedCompactDirect).toHaveBeenCalledTimes(1);
+    expect(mockedRunEmbeddedAttempt).toHaveBeenCalledTimes(2);
+    expect(result.meta.error).toBeUndefined();
   });
 
   it("does not attempt compaction when timedOutDuringCompaction is true", async () => {
diff --git a/src/agents/pi-embedded-runner/run.ts b/src/agents/pi-embedded-runner/run.ts
index e723c513384..1a39f383ff8 100644
--- a/src/agents/pi-embedded-runner/run.ts
+++ b/src/agents/pi-embedded-runner/run.ts
@@ -1097,7 +1097,7 @@ export async function runEmbeddedPiAgent(
           // ── Timeout-triggered compaction ──────────────────────────────────
           // When the LLM times out with high context usage, compact before
           // retrying to break the death spiral of repeated timeouts.
-          if (timedOut && !aborted && !timedOutDuringCompaction) {
+          if (timedOut && !timedOutDuringCompaction) {
             // Only consider prompt-side tokens here. API totals include output
             // tokens, which can make a long generation look like high context
             // pressure even when the prompt itself was small.
@@ -1112,12 +1112,14 @@ export async function runEmbeddedPiAgent(
               );
             } else if (tokenUsedRatio > 0.65) {
               const timeoutDiagId = createCompactionDiagId();
+              const nextTimeoutCompactionAttempt = timeoutCompactionAttempts + 1;
               log.warn(
                 `[timeout-compaction] LLM timed out with high prompt token usage (${Math.round(tokenUsedRatio * 100)}%); ` +
                   `attempting compaction before retry diagId=${timeoutDiagId}`,
               );
               let timeoutCompactResult: Awaited<ReturnType<typeof contextEngine.compact>>;
               await runOwnsCompactionBeforeHook("timeout recovery");
+              timeoutCompactionAttempts = nextTimeoutCompactionAttempt;
               try {
                 timeoutCompactResult = await contextEngine.compact({
                   sessionId: params.sessionId,
@@ -1147,8 +1149,8 @@ export async function runEmbeddedPiAgent(
                     ownerNumbers: params.ownerNumbers,
                     trigger: "timeout_recovery",
                     diagId: timeoutDiagId,
-                    attempt: 1,
-                    maxAttempts: 1,
+                    attempt: nextTimeoutCompactionAttempt,
+                    maxAttempts: MAX_TIMEOUT_COMPACTION_ATTEMPTS,
                   },
                 });
               } catch (compactErr) {
@@ -1158,7 +1160,6 @@ export async function runEmbeddedPiAgent(
                 timeoutCompactResult = { ok: false, compacted: false, reason: String(compactErr) };
               }
               await runOwnsCompactionAfterHook("timeout recovery", timeoutCompactResult);
-              timeoutCompactionAttempts += 1;
               if (timeoutCompactResult.compacted) {
                 autoCompactionCount += 1;
                 log.info(