diff --git a/tests/e2e/sidebar-takeover.spec.ts b/tests/e2e/sidebar-takeover.spec.ts
index b5a4457c7a9..9223721775f 100644
--- a/tests/e2e/sidebar-takeover.spec.ts
+++ b/tests/e2e/sidebar-takeover.spec.ts
@@ -97,6 +97,28 @@ test.describe("Sidebar takeover (collapse + secondary pane)", () => {
     await expect(page.getByLabel(APP_SIDEBAR_EXPANDED_MARKER)).toHaveCount(0);
   });
 
+  test("renders the secondary pane nav labels at full width despite the app rail collapse", async ({ page }) => {
+    // Regression (PAP-10700): the secondary pane is 240px wide, but its
+    // SidebarNavItem children read the *global* collapsed state and used to
+    // render icon-only (label `w-0 text-transparent`), making the settings nav
+    // unreadable in the default takeover state. The pane must force full labels.
+    await page.goto(`/${prefix}/company/settings`);
+
+    const secondary = page.locator("[data-secondary-sidebar]");
+    await expect(secondary).toBeVisible();
+
+    // App sidebar is collapsed to its rail (default unpinned takeover state)...
+    await expect(page.getByLabel(APP_SIDEBAR_EXPANDED_MARKER)).toHaveCount(0);
+
+    // ...yet a settings nav label renders at its full text width, not clipped to
+    // zero. "Environments" is unique to the company-settings nav.
+    const envLabel = secondary.getByText("Environments", { exact: true });
+    await expect(envLabel).toBeVisible();
+    const labelBox = await envLabel.boundingBox();
+    expect(labelBox).not.toBeNull();
+    expect(labelBox!.width).toBeGreaterThan(20);
+  });
+
   test("an explicit expanded pin overrides the route-driven collapse", async ({ page }) => {
     // User has pinned the sidebar expanded ("0"). The settings route still
     // requests a collapse, but the pin must win (pin > route request > default).
diff --git a/ui/src/components/SecondarySidebar.tsx b/ui/src/components/SecondarySidebar.tsx
index 3936a6de382..20b41c17dcb 100644
--- a/ui/src/components/SecondarySidebar.tsx
+++ b/ui/src/components/SecondarySidebar.tsx
@@ -1,5 +1,6 @@
 import { type ReactNode } from "react";
 import { cn } from "@/lib/utils";
+import { SidebarNavExpandedProvider } from "./SidebarNavItem";
 
 /**
  * Fixed-width contextual pane that sits between the collapsed app rail and the
@@ -12,6 +13,10 @@ import { cn } from "@/lib/utils";
  * It is a dumb container — fixed `w-60`, full-height, non-shrinking, with a
  * right border and its own vertical scroll — so callers just drop the
  * contextual nav (or a plugin slot mount) inside as `children`.
+ *
+ * Because the pane is always 240px wide it forces the full-label presentation
+ * on any `SidebarNavItem` inside it, so the contextual nav stays readable even
+ * while the app sidebar is collapsed to its rail (PAP-10700).
  */
 export function SecondarySidebar({
   children,
@@ -28,7 +33,7 @@ export function SecondarySidebar({
         className,
       )}
     >
-      {children}
+      <SidebarNavExpandedProvider>{children}</SidebarNavExpandedProvider>
     </div>
   );
 }
diff --git a/ui/src/components/SidebarNavItem.test.tsx b/ui/src/components/SidebarNavItem.test.tsx
index 715c3658123..4111cc82041 100644
--- a/ui/src/components/SidebarNavItem.test.tsx
+++ b/ui/src/components/SidebarNavItem.test.tsx
@@ -5,7 +5,7 @@ import type { ReactNode } from "react";
 import { createRoot, type Root } from "react-dom/client";
 import { afterEach, beforeEach, describe, expect, it, vi } from "vitest";
 import { Inbox } from "lucide-react";
-import { SidebarNavItem } from "./SidebarNavItem";
+import { SidebarNavItem, SidebarNavExpandedProvider } from "./SidebarNavItem";
 import { TooltipProvider } from "@/components/ui/tooltip";
 
 const sidebarState = vi.hoisted(() => ({
@@ -113,6 +113,26 @@ describe("SidebarNavItem", () => {
     expect(link().getAttribute("aria-label")).toBeNull();
   });
 
+  it("forces the full label inside an expanded contextual pane even when globally collapsed", () => {
+    // The takeover model collapses the global sidebar (collapsed=true) while the
+    // 240px SecondarySidebar still needs readable labels (PAP-10700). The
+    // provider must override the global rail collapse.
+    sidebarState.collapsed = true;
+    render(
+      <SidebarNavExpandedProvider>
+        <SidebarNavItem to="/inbox" label="Inbox" icon={Inbox} badge={28} badgeLabel="unread" />
+      </SidebarNavExpandedProvider>,
+    );
+
+    const label = Array.from(container.querySelectorAll("span")).find((el) => el.textContent === "Inbox");
+    expect(label?.className).not.toContain("w-0");
+    expect(label?.className).toContain("flex-1");
+    // Full numeric badge, no rail aria-label, no tooltip wrapper.
+    expect(container.textContent).toContain("28");
+    expect(link().getAttribute("aria-label")).toBeNull();
+    expect(link().parentElement?.getAttribute("data-slot")).not.toBe("tooltip-trigger");
+  });
+
   it("surfaces the live count in the rail aria-label", () => {
     sidebarState.collapsed = true;
     render(<SidebarNavItem to="/dashboard" label="Dashboard" icon={Inbox} liveCount={3} />);
diff --git a/ui/src/components/SidebarNavItem.tsx b/ui/src/components/SidebarNavItem.tsx
index f6e97c68717..4dc2a7bc0f3 100644
--- a/ui/src/components/SidebarNavItem.tsx
+++ b/ui/src/components/SidebarNavItem.tsx
@@ -1,3 +1,4 @@
+import { createContext, useContext, type ReactNode } from "react";
 import { NavLink } from "@/lib/router";
 import { SIDEBAR_SCROLL_RESET_STATE } from "../lib/navigation-scroll";
 import { cn, SIDEBAR_RAIL_HIDDEN_LABEL } from "../lib/utils";
@@ -5,6 +6,27 @@ import { useSidebar } from "../context/SidebarContext";
 import { Tooltip, TooltipContent, TooltipTrigger } from "@/components/ui/tooltip";
 import type { LucideIcon } from "lucide-react";
 
+/**
+ * Forces the full-label (non-rail) presentation for any `SidebarNavItem`
+ * rendered beneath it, regardless of the global `useSidebar().collapsed` state.
+ *
+ * Takeover routes (PAP-10695) collapse the app `<Sidebar/>` to its 64px rail
+ * and render the contextual nav in a fixed 240px `SecondarySidebar`. That pane
+ * is always wide enough for labels, but its `SidebarNavItem` children still
+ * read the *global* `collapsed=true` and would otherwise render icon-only —
+ * leaving the settings nav unreadable (PAP-10700). Wrapping the pane in this
+ * provider decouples its items from the global rail collapse.
+ */
+const SidebarNavExpandedContext = createContext(false);
+
+export function SidebarNavExpandedProvider({ children }: { children: ReactNode }) {
+  return (
+    <SidebarNavExpandedContext.Provider value={true}>
+      {children}
+    </SidebarNavExpandedContext.Provider>
+  );
+}
+
 interface SidebarNavItemProps {
   to: string;
   label: string;
@@ -39,9 +61,13 @@ export function SidebarNavItem({
   liveCount,
 }: SidebarNavItemProps) {
   const { isMobile, setSidebarOpen, collapsed, peeking } = useSidebar();
+  // A fixed-width contextual pane (SecondarySidebar) forces full labels even
+  // when the global app sidebar is collapsed to its rail (PAP-10700).
+  const forceExpanded = useContext(SidebarNavExpandedContext);
   // The icon-only rail presentation only applies when pinned collapsed and not
-  // peeking; a peek/expanded panel restores the full label + badge.
-  const rail = collapsed && !peeking;
+  // peeking; a peek/expanded panel — or an expanded contextual pane — restores
+  // the full label + badge.
+  const rail = collapsed && !peeking && !forceExpanded;
 
   const hasBadge = badge != null && badge > 0;
   const hasLive = liveCount != null && liveCount > 0;