diff --git a/packages/app/e2e/browser/provider-settings-refresh.spec.ts b/packages/app/e2e/browser/provider-settings-refresh.spec.ts
index 961b518435..6c9739e894 100644
--- a/packages/app/e2e/browser/provider-settings-refresh.spec.ts
+++ b/packages/app/e2e/browser/provider-settings-refresh.spec.ts
@@ -1,5 +1,7 @@
+import path from "node:path";
 import type { Locator } from "@playwright/test";
 import { expect, test, type Page } from "../support/fixtures";
+import { clickNewChat, gotoWorkspace } from "../support/helpers/launcher";
 import { expectComposerVisible } from "../support/helpers/composer";
 import { openAgentRoute, seedMockAgentWorkspace } from "../support/helpers/mock-agent";
 
@@ -214,3 +216,66 @@ test.describe("provider settings overlay stack", () => {
     }
   });
 });
+
+async function openTimedOutProvider(page: Page, workspaceId: string, width: number) {
+  await gotoWorkspace(page, workspaceId);
+  await clickNewChat(page);
+  await expectComposerVisible(page);
+  await page.setViewportSize({ width, height: 900 });
+  await page.getByRole("button", { name: /Select model/ }).click();
+  if (width < 600) {
+    await page.getByTestId("agent-controls-model").click();
+  } else {
+    await page.getByRole("button", { name: "Back", exact: true }).click();
+  }
+  await page.getByTestId("model-provider-picker-timeout").click();
+  await expect(page.getByText(/Timed out refreshing Pi timeout/)).toBeVisible();
+}
+
+async function expectErrorHasSideGutters(page: Page) {
+  const error = page.getByText(/Timed out refreshing Pi timeout/);
+  const bounds = await error.evaluate((element) => {
+    const text = element.getBoundingClientRect();
+    const state = element.parentElement!.getBoundingClientRect();
+    return { left: text.left - state.left, right: state.right - text.right };
+  });
+  expect(bounds.left, "error text stays inside the empty state's left edge").toBeGreaterThan(0);
+  expect(bounds.right, "error text stays inside the empty state's right edge").toBeGreaterThan(0);
+  await expect(page.getByRole("button", { name: "Retry", exact: true })).toBeVisible();
+}
+
+test.use({
+  e2eDaemonConfig: {
+    version: 1,
+    agents: {
+      catalogRefreshTimeoutMs: 2000,
+      providers: {
+        "picker-timeout": {
+          extends: "pi",
+          label: "Pi timeout",
+          enabled: true,
+          command: [
+            process.execPath,
+            path.resolve("e2e/fixtures/fake-pi-rpc.mjs"),
+            "--stall-model-discovery",
+          ],
+        },
+      },
+    },
+  },
+});
+
+test.describe("model discovery timeout", () => {
+  for (const width of [1200, 390]) {
+    test(`keeps a wrapped discovery error away from both picker edges at ${width}px`, async ({
+      page,
+      withWorkspace,
+    }, testInfo) => {
+      await page.setViewportSize({ width: 1200, height: 900 });
+      const workspace = await withWorkspace({ prefix: "model-error-spacing-" });
+      await openTimedOutProvider(page, workspace.workspaceId, width);
+      await page.screenshot({ path: testInfo.outputPath("model-error.png") });
+      await expectErrorHasSideGutters(page);
+    });
+  }
+});
diff --git a/packages/app/e2e/fixtures/fake-pi-rpc.mjs b/packages/app/e2e/fixtures/fake-pi-rpc.mjs
index b6d156ddfc..372e29c44b 100644
--- a/packages/app/e2e/fixtures/fake-pi-rpc.mjs
+++ b/packages/app/e2e/fixtures/fake-pi-rpc.mjs
@@ -6,6 +6,7 @@ for await (const line of lines) {
   const command = JSON.parse(line);
   let data = {};
   if (command.type === "get_available_models") {
+    if (process.argv.includes("--stall-model-discovery")) continue;
     data = {
       models: [
         {
diff --git a/packages/app/src/components/model-browser.tsx b/packages/app/src/components/model-browser.tsx
index 17924b233d..2ca6b6a9c2 100644
--- a/packages/app/src/components/model-browser.tsx
+++ b/packages/app/src/components/model-browser.tsx
@@ -1692,7 +1692,7 @@ const styles = StyleSheet.create((theme) => ({
     opacity: 0,
   },
   emptyState: {
-    paddingVertical: theme.spacing[4],
+    padding: theme.spacing[4],
     alignItems: "center",
     gap: theme.spacing[2],
   },