diff --git a/ui/src/components/AgentConfigForm.tsx b/ui/src/components/AgentConfigForm.tsx
index c3c9bdfa6fd..1df858417db 100644
--- a/ui/src/components/AgentConfigForm.tsx
+++ b/ui/src/components/AgentConfigForm.tsx
@@ -46,6 +46,10 @@ import { ChoosePathButton } from "./PathInstructionsModal";
 import { OpenCodeLogoIcon } from "./OpenCodeLogoIcon";
 import { ReportsToPicker } from "./ReportsToPicker";
 import { shouldShowLegacyWorkingDirectoryField } from "../lib/legacy-agent-config";
+import {
+  coerceOptionalMarkdownDraft,
+  normalizeOptionalMarkdownPatch,
+} from "./agent-config-form-utils";
 
 /* ---- Create mode values ---- */
 
@@ -246,7 +250,11 @@ export function AgentConfigForm(props: AgentConfigFormProps) {
     const patch: Record<string, unknown> = {};
 
     if (Object.keys(overlay.identity).length > 0) {
-      Object.assign(patch, overlay.identity);
+      const identityPatch = { ...overlay.identity };
+      if (Object.prototype.hasOwnProperty.call(identityPatch, "capabilities")) {
+        identityPatch.capabilities = normalizeOptionalMarkdownPatch(identityPatch.capabilities);
+      }
+      Object.assign(patch, identityPatch);
     }
     if (overlay.adapterType !== undefined) {
       patch.adapterType = overlay.adapterType;
@@ -517,8 +525,10 @@ export function AgentConfigForm(props: AgentConfigFormProps) {
             </Field>
             <Field label="Capabilities" hint={help.capabilities}>
               <MarkdownEditor
-                value={eff("identity", "capabilities", props.agent.capabilities ?? "")}
-                onChange={(v) => mark("identity", "capabilities", v || null)}
+                value={coerceOptionalMarkdownDraft(
+                  eff("identity", "capabilities", props.agent.capabilities ?? ""),
+                )}
+                onChange={(v) => mark("identity", "capabilities", coerceOptionalMarkdownDraft(v))}
                 placeholder="Describe what this agent can do..."
                 contentClassName="min-h-[44px] text-sm font-mono"
                 imageUploadHandler={async (file) => {
diff --git a/ui/src/components/MarkdownEditor.test.tsx b/ui/src/components/MarkdownEditor.test.tsx
index daf0361505f..6338ed020e0 100644
--- a/ui/src/components/MarkdownEditor.test.tsx
+++ b/ui/src/components/MarkdownEditor.test.tsx
@@ -7,6 +7,7 @@ import { MarkdownEditor } from "./MarkdownEditor";
 
 const mdxEditorMockState = vi.hoisted(() => ({
   emitMountEmptyReset: false,
+  lastSuppressHtmlProcessing: undefined as boolean | undefined,
 }));
 
 vi.mock("@mdxeditor/editor", async () => {
@@ -27,10 +28,12 @@ vi.mock("@mdxeditor/editor", async () => {
       markdown,
       placeholder,
       onChange,
+      suppressHtmlProcessing,
     }: {
       markdown: string;
       placeholder?: string;
       onChange?: (value: string) => void;
+      suppressHtmlProcessing?: boolean;
     },
     forwardedRef: React.ForwardedRef<{ setMarkdown: (value: string) => void; focus: () => void } | null>,
   ) {
@@ -40,6 +43,10 @@ vi.mock("@mdxeditor/editor", async () => {
       focus: () => {},
     }), []);
 
+    React.useEffect(() => {
+      mdxEditorMockState.lastSuppressHtmlProcessing = suppressHtmlProcessing;
+    }, [suppressHtmlProcessing]);
+
     React.useEffect(() => {
       setForwardedRef(forwardedRef, null);
       const timer = window.setTimeout(() => {
@@ -102,6 +109,7 @@ describe("MarkdownEditor", () => {
     container.remove();
     vi.clearAllMocks();
     mdxEditorMockState.emitMountEmptyReset = false;
+    mdxEditorMockState.lastSuppressHtmlProcessing = undefined;
   });
 
   it("applies async external value updates once the editor ref becomes ready", async () => {
@@ -158,4 +166,24 @@ describe("MarkdownEditor", () => {
       root.unmount();
     });
   });
+
+  it("suppresses HTML processing so literal angle brackets do not break markdown editing", async () => {
+    const root = createRoot(container);
+
+    await act(async () => {
+      root.render(
+        <MarkdownEditor
+          value="Keep incidents rate <5%"
+          onChange={() => {}}
+        />,
+      );
+    });
+
+    await flush();
+    expect(mdxEditorMockState.lastSuppressHtmlProcessing).toBe(true);
+
+    await act(async () => {
+      root.unmount();
+    });
+  });
 });
diff --git a/ui/src/components/MarkdownEditor.tsx b/ui/src/components/MarkdownEditor.tsx
index b77f926c415..6182d7857c7 100644
--- a/ui/src/components/MarkdownEditor.tsx
+++ b/ui/src/components/MarkdownEditor.tsx
@@ -605,6 +605,7 @@ export const MarkdownEditor = forwardRef<MarkdownEditorRef, MarkdownEditorProps>
         ref={setEditorRef}
         markdown={value}
         placeholder={placeholder}
+        suppressHtmlProcessing
         onChange={(next) => {
           const echo = echoIgnoreMarkdownRef.current;
           if (echo !== null && next === echo) {
diff --git a/ui/src/components/agent-config-form-utils.test.ts b/ui/src/components/agent-config-form-utils.test.ts
new file mode 100644
index 00000000000..009426d7ce7
--- /dev/null
+++ b/ui/src/components/agent-config-form-utils.test.ts
@@ -0,0 +1,22 @@
+import { describe, expect, it } from "vitest";
+import {
+  coerceOptionalMarkdownDraft,
+  normalizeOptionalMarkdownPatch,
+} from "./agent-config-form-utils";
+
+describe("agent-config-form-utils", () => {
+  it("keeps optional markdown drafts string-backed while editing", () => {
+    expect(coerceOptionalMarkdownDraft(null)).toBe("");
+    expect(coerceOptionalMarkdownDraft(undefined)).toBe("");
+    expect(coerceOptionalMarkdownDraft("Writes code")).toBe("Writes code");
+  });
+
+  it("normalizes blank optional markdown back to null for persistence", () => {
+    expect(normalizeOptionalMarkdownPatch("")).toBeNull();
+    expect(normalizeOptionalMarkdownPatch("   ")).toBeNull();
+    expect(normalizeOptionalMarkdownPatch(null)).toBeNull();
+    expect(normalizeOptionalMarkdownPatch("Keeps incidents under control")).toBe(
+      "Keeps incidents under control",
+    );
+  });
+});
diff --git a/ui/src/components/agent-config-form-utils.ts b/ui/src/components/agent-config-form-utils.ts
new file mode 100644
index 00000000000..8899c57dafd
--- /dev/null
+++ b/ui/src/components/agent-config-form-utils.ts
@@ -0,0 +1,8 @@
+export function coerceOptionalMarkdownDraft(value: string | null | undefined): string {
+  return typeof value === "string" ? value : "";
+}
+
+export function normalizeOptionalMarkdownPatch(value: unknown): string | null {
+  if (typeof value !== "string") return null;
+  return value.trim().length > 0 ? value : null;
+}