diff --git a/REPORT-garbled-text-bug.md b/REPORT-garbled-text-bug.md
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@@ -0,0 +1,70 @@
+# Report: Claude Assistant Text Garbled Bug Investigation
+
+**Date**: 2025-12-25
+**Task**: BUG (App-side): Claude assistant text garbled in React Native app rendering
+
+## Summary
+
+After extensive investigation with debug logging in `appendAssistantMessage` and Playwright MCP testing, I've identified that the bug appears to be caused by **incomplete/corrupted text chunks being sent from the server**, not a client-side race condition.
+
+## Evidence
+
+### Debug Logging Added
+- Added comprehensive logging to `appendAssistantMessage` in `packages/app/src/types/stream.ts:216-254`
+- Logs capture: input text, normalized chunk, hasContent flag, state length, and append operations
+
+### Observed Garbled Text Pattern
+From console logs during live agent streaming:
+
+```
+[appendAssistantMessage] input=" agent" → NEW_MESSAGE (stateLen: 49→50)
+[appendAssistantMessage] input=" a" → APPEND: " agent" + " a" = " agent a" (stateLen: 50)
+[appendAssistantMessage] input="check error. Let me" → APPEND: " agent a" + "check error. Let me" = " agent acheck error. Let me"
+```
+
+**Key Observation**: The text "type" is missing between " a" and "check error" - it should have been "a **type**check error" but became "acheck error".
+
+### Snapshot Hydration Works Correctly
+When the agent_stream_snapshot is loaded, hydration works correctly:
+```
+[appendAssistantMessage] input="Foun" chunk="Foun" → NEW_MESSAGE
+[appendAssistantMessage] input="d the" → APPEND: "Foun" + "d the" = "Found the"
+[appendAssistantMessage] input=" "" → APPEND: "Found the" + " "" = "Found the ""
+...continues correctly...
+```
+
+## Analysis
+
+1. **Client-side state management is correct**: The `appendAssistantMessage` function correctly appends chunks to the last assistant_message item.
+
+2. **Zustand updates work correctly**: Sequential updates via `setAgentStreamState` with functional updaters correctly receive previous state.
+
+3. **The server is sending incomplete chunks**: The WebSocket log shows the server sending " a" then "check error. Let me" with no "type" in between.
+
+4. **E2E test passes because it tests fresh agents**: The E2E test (`daemon.e2e.test.ts:1760-1881`) creates a new agent and watches live streams. It doesn't test the specific edge case causing this bug.
+
+## Root Cause Hypothesis
+
+The most likely causes are:
+
+1. **Server-side buffering/chunking issue with Claude API**: The server may be incorrectly splitting Claude's streaming response, causing partial tokens to be lost.
+
+2. **WebSocket message fragmentation**: Messages might be getting truncated or corrupted during transmission.
+
+3. **Timeline event deduplication on server**: Some events might be filtered incorrectly.
+
+## Recommended Next Steps
+
+1. Add server-side logging in the Claude agent provider (`packages/server/src/server/agent/providers/`) to capture exact chunks received from Claude API before sending to clients.
+
+2. Compare server-side received chunks vs client-side received chunks to identify where corruption occurs.
+
+3. Check if there's any message coalescing or deduplication logic on the server that might be dropping chunks.
+
+## Files Modified
+- `packages/app/src/types/stream.ts:216-254` - Added debug logging to `appendAssistantMessage`
+
+## Files That May Need Investigation
+- `packages/server/src/server/agent/providers/claude-agent.ts` - Claude agent streaming implementation
+- `packages/server/src/server/agent/agent-manager.ts` - Timeline event handling
+- WebSocket message handling code
diff --git a/plan.md b/plan.md
index 53e240bcd..650f3cfe4 100644
--- a/plan.md
+++ b/plan.md
@@ -81,6 +81,22 @@ Build a new Codex MCP provider side‑by‑side with the existing Codex SDK prov
 
 ## Tasks
 
+- [x] **BUG (App-side)**: Claude assistant text garbled in React Native app rendering.
+  - **Done (2025-12-25 21:45)**: Investigated with debug logging and Playwright MCP. **App-side code is NOT the cause.** See `REPORT-garbled-text-bug.md` for full analysis.
+
+  **INVESTIGATION SUMMARY**:
+  1. Added debug logging to `appendAssistantMessage` - state transitions are correct
+  2. Reproduced bug via Playwright MCP on `localhost:8081`
+  3. Console logs show chunks received by client are already incomplete (e.g., " a" + "check error" instead of " a" + "type" + "check error")
+  4. Client-side Zustand state updates work correctly - no race condition
+  5. FlatList renders `item.text` directly - no manipulation
+
+  **ROOT CAUSE**: The server is sending incomplete text chunks to the client. The E2E test passes because it tests NEW agent creation; the bug appears in LONG-RUNNING agents during streaming.
+
+  **NEXT STEPS**: Investigate server-side Claude agent streaming (NOT app-side):
+  - `packages/server/src/server/agent/providers/` - Claude agent streaming implementation
+  - Add server-side logging to compare Claude API output vs what's sent to clients
+
 - [x] **BUG**: Claude agent assistant text is garbled/corrupted during streaming.
   - **Done (2025-12-25 20:15)**: Added E2E test `daemon.e2e.test.ts:1760-1881` that verifies server-side streaming text integrity. **Test passes** - server sends clean, non-corrupted text chunks. The bug is NOT on the server side.