diff --git a/packages/server/src/utils/directory-suggestions-3694.test.ts b/packages/server/src/utils/directory-suggestions-3694.test.ts
new file mode 100644
index 0000000000..ad437aee56
--- /dev/null
+++ b/packages/server/src/utils/directory-suggestions-3694.test.ts
@@ -0,0 +1,32 @@
+import { mkdtempSync, mkdirSync, writeFileSync, rmSync } from "node:fs";
+import { tmpdir } from "node:os";
+import path from "node:path";
+import { expect, it } from "vitest";
+import { searchDirectoryEntries } from "./directory-suggestions.js";
+
+it("suggests an exact filename beyond the default scan budget", async () => {
+  const root = mkdtempSync(path.join(tmpdir(), "paseo-search-3694-"));
+  try {
+    for (let i = 0; i < 201; i += 1) {
+      const folder = path.join(root, `package-${String(i).padStart(3, "0")}`);
+      mkdirSync(folder);
+      for (let j = 0; j < 100; j += 1) writeFileSync(path.join(folder, `file-${j}.ts`), "");
+    }
+    const target = "package-200/xhci-ring.c";
+    writeFileSync(path.join(root, target), "");
+    const options = {
+      root,
+      query: "xhci-ring",
+      pathFormat: "relative" as const,
+      includeFiles: true,
+      includeDirectories: false,
+    };
+    const bounded = await searchDirectoryEntries(options);
+    const unbounded = await searchDirectoryEntries({ ...options, maxEntriesScanned: 100_000 });
+    console.log(JSON.stringify({ bounded, unbounded }));
+    expect(unbounded).toContainEqual({ path: target, kind: "file" });
+    expect(bounded).toContainEqual({ path: target, kind: "file" });
+  } finally {
+    rmSync(root, { recursive: true, force: true });
+  }
+});