diff --git a/dist/live-checkpoint-ClPCSdrW.js b/dist/live-checkpoint-ClPCSdrW.js
index 243c9d13bcba520923b63adfddad75cf2d94362d..e2a254d4e57fb2e246ccb742f2e9de5a8a461d20 100644
--- a/dist/live-checkpoint-ClPCSdrW.js
+++ b/dist/live-checkpoint-ClPCSdrW.js
@@ -1532,7 +1532,7 @@ const ZED_TAG_KEYS = /* @__PURE__ */ new Set([
 	"RedactedThinking",
 	"ToolUse"
 ]);
-const MAP_OBJECT_PATHS = /* @__PURE__ */ new Set(["request_token_usage", "messages.Agent.tool_results"]);
+const MAP_OBJECT_PATHS = /* @__PURE__ */ new Set(["request_token_usage", "messages.Agent.tool_results", "acpx.session_options.env"]);
 const OPAQUE_VALUE_PATHS = /* @__PURE__ */ new Set([
 	"agent_capabilities",
 	"messages.Agent.content.ToolUse.input",
@@ -2557,7 +2557,7 @@ function readCommandLineChar(state) {
 		escaping: false,
 		hasPart: true
 	};
-	if (state.ch === "\\" && state.quote !== "'") return {
+	if (process.platform !== "win32" && state.ch === "\\" && state.quote !== "'") return {
 		current: state.current,
 		quote: state.quote,
 		escaping: true,
@@ -2912,8 +2912,8 @@ function promotePrefixedAuthEnvironment(env) {
 	}
 	return protectedKeys;
 }
-function buildAgentEnvironment(authCredentials, sessionEnv) {
-	const env = { ...process.env };
+function buildAgentEnvironment(authCredentials, sessionEnv, inheritProcessEnv = true) {
+	const env = inheritProcessEnv ? { ...process.env } : {};
 	const protectedAuthEnvKeys = promotePrefixedAuthEnvironment(env);
 	if (authCredentials) for (const [methodId, credential] of Object.entries(authCredentials)) {
 		addAuthCredentialEnvKeys(protectedAuthEnvKeys, methodId, credential);
@@ -2955,10 +2955,10 @@ function resolveConfiguredAuthCredential(methodId, authCredentials) {
 	const configCredentials = authCredentials ?? {};
 	return configCredentials[methodId] ?? configCredentials[toEnvToken(methodId)];
 }
-function buildAgentSpawnOptions(cwd, authCredentials, sessionEnv) {
+function buildAgentSpawnOptions(cwd, authCredentials, sessionEnv, inheritProcessEnv) {
 	return {
 		cwd,
-		env: buildAgentEnvironment(authCredentials, sessionEnv),
+		env: buildAgentEnvironment(authCredentials, sessionEnv, inheritProcessEnv),
 		stdio: [
 			"pipe",
 			"pipe",
@@ -3724,10 +3724,13 @@ function resolveClientCapabilities(params) {
 		},
 		terminal: params.terminal
 	};
-	if (!params.devinAcp) return baseCapabilities;
+	const typedSessionFailureMeta = {
+		jetbrains: { air: { version: 1, capabilities: ["sessionFailure"] } }
+	};
+	if (!params.devinAcp) return { ...baseCapabilities, _meta: typedSessionFailureMeta };
 	return {
 		...baseCapabilities,
-		_meta: DEVIN_COMPATIBILITY_CLIENT_CAPABILITIES_META
+		_meta: { ...typedSessionFailureMeta, ...DEVIN_COMPATIBILITY_CLIENT_CAPABILITIES_META }
 	};
 }
 function isDevinRequestDiagnosticsMethod(method) {
@@ -3957,9 +3960,26 @@ var AcpClient = class {
 		this.lastAgentExit = void 0;
 		this.lastKnownPid = child.pid ?? void 0;
 		this.attachAgentLifecycleObservers(child);
+		if (this.options.onAgentSpawn) {
+			try {
+				if (typeof child.pid !== "number" || child.pid <= 0) {
+					throw new Error("ACPX agent spawn did not expose a valid process id.");
+				}
+				await this.options.onAgentSpawn({ pid: child.pid, startedAt: this.agentStartedAt });
+			} catch (error) {
+				try {
+					child.kill("SIGKILL");
+				} catch {}
+				throw error;
+			}
+		}
 		const startupStderr = [];
 		child.stderr.on("data", (chunk) => {
 			this.captureStartupStderr(startupStderr, chunk);
+			if (this.options.onAgentStderr) {
+				this.options.onAgentStderr(chunk.toString());
+				return;
+			}
 			if (!this.options.verbose) return;
 			process.stderr.write(chunk);
 		});
@@ -3994,7 +4014,7 @@ var AcpClient = class {
 			geminiAcp: isGeminiAcpCommand(spawnCommand, args),
 			copilotAcp: isCopilotAcpCommand(spawnCommand, args),
 			claudeAcp: isClaudeAcpCommand(spawnCommand, args),
-			spawnOptions: buildAgentSpawnOptions(this.options.cwd, this.options.authCredentials, this.options.sessionOptions?.env)
+			spawnOptions: buildAgentSpawnOptions(this.options.spawnCwd ?? this.options.cwd, this.options.authCredentials, this.options.sessionOptions?.env, this.options.inheritProcessEnv)
 		};
 	}
 	logAgentLaunch(plan) {
@@ -6070,6 +6090,27 @@ async function withConnectedSession(options) {
 //#region src/runtime/engine/prompt-turn.ts
 const SESSION_REPLY_IDLE_MS = 1e3;
 const SESSION_REPLY_DRAIN_TIMEOUT_MS = 5e3;
+const TYPED_SESSION_FAILURE_CATEGORIES = /* @__PURE__ */ new Set([
+	"connection",
+	"access",
+	"limit",
+	"service",
+	"request",
+	"unknown"
+]);
+function typedTerminalSessionFailureCategory(response) {
+	if (response === null || typeof response !== "object" || Array.isArray(response)) return null;
+	const meta = response._meta;
+	if (meta === null || typeof meta !== "object" || Array.isArray(meta)) return null;
+	const jetbrains = meta.jetbrains;
+	if (jetbrains === null || typeof jetbrains !== "object" || Array.isArray(jetbrains)) return null;
+	const air = jetbrains.air;
+	if (air === null || typeof air !== "object" || Array.isArray(air)) return null;
+	if (!Number.isInteger(air.version) || air.version < 1) return null;
+	const failure = air.sessionFailure;
+	if (failure === null || typeof failure !== "object" || Array.isArray(failure) || failure.severity !== "error") return null;
+	return typeof failure.category === "string" && TYPED_SESSION_FAILURE_CATEGORIES.has(failure.category) ? failure.category : "unknown";
+}
 async function runPromptTurn(params) {
 	try {
 		const promptPromise = params.client.prompt(params.sessionId, params.prompt);
@@ -6079,6 +6120,20 @@ async function runPromptTurn(params) {
 			idleMs: SESSION_REPLY_IDLE_MS,
 			timeoutMs: SESSION_REPLY_DRAIN_TIMEOUT_MS
 		}).catch(() => {});
+		const terminalFailureCategory = typedTerminalSessionFailureCategory(response);
+		if (terminalFailureCategory !== null) {
+			// Pass complete provider text to the diagnostic callback. Consumers redact
+			// before bounding it; truncating here can split and expose a credential.
+			const failure = response._meta.jetbrains.air.sessionFailure;
+			try {
+				params.onTerminalSessionFailure?.({
+					category: terminalFailureCategory,
+					...(typeof failure.title === "string" ? { title: failure.title } : {}),
+					...(typeof failure.details === "string" ? { details: failure.details } : {})
+				});
+			} catch {}
+			throw new Error(`ACP agent reported a terminal ${terminalFailureCategory} failure.`);
+		}
 		recordPromptResponseUsage(params.conversation, response.usage, params.promptMessageId);
 		return {
 			stopReason: response.stopReason,
diff --git a/dist/runtime.d.ts b/dist/runtime.d.ts
index ccdbe5b032521518022223733049b8b38793473b..416bdaae1450c6e85b34afd154349770f9f7b0a9 100644
--- a/dist/runtime.d.ts
+++ b/dist/runtime.d.ts
@@ -45,6 +45,7 @@ type AcpRuntimeTurnAttachment = {
   data: string;
 };
 type AcpRuntimeTurnInput = {
+  onTerminalSessionFailure?: (failure: { category: string; title?: string; details?: string }) => void;
   handle: AcpRuntimeHandle;
   text: string;
   attachments?: AcpRuntimeTurnAttachment[];
@@ -266,6 +267,10 @@ type AcpRuntimeOptions = {
   timeoutMs?: number;
   probeAgent?: string;
   verbose?: boolean;
+  onAgentStderr?: (chunk: string) => void;
+  onAgentSpawn?: (meta: { pid: number; startedAt: string }) => Promise<void>;
+  spawnCwd?: string;
+  inheritProcessEnv?: boolean;
   onPermissionRequest?: (req: AcpPermissionRequest, ctx: {
     signal: AbortSignal;
   }) => Promise<AcpPermissionDecision | undefined>;
@@ -302,6 +307,7 @@ declare class AcpRuntimeManager {
   private createAndSaveRuntimeRecord;
   private keepPersistentClient;
   startTurn(input: {
+    onTerminalSessionFailure?: (failure: { category: string; title?: string; details?: string }) => void;
     handle: AcpRuntimeHandle;
     text: string;
     attachments?: AcpRuntimeTurnAttachment[];
@@ -334,6 +340,7 @@ declare class AcpRuntimeManager {
   private finalizeRuntimeTurn;
   private finalizeRuntimeTurnRecord;
   runTurn(input: {
+    onTerminalSessionFailure?: (failure: { category: string; title?: string; details?: string }) => void;
     handle: AcpRuntimeHandle;
     text: string;
     attachments?: AcpRuntimeTurnAttachment[];
diff --git a/dist/runtime.js b/dist/runtime.js
index 6c9cc999e50a11c399c68b3a0f1b7af4bc2317c0..e06bf4fdee534f3ef56be0387a2f5f8626e697ad 100644
--- a/dist/runtime.js
+++ b/dist/runtime.js
@@ -744,7 +744,8 @@ var AcpRuntimeManager = class {
 		this.deps = deps;
 	}
 	createClient(options) {
-		return this.deps.clientFactory?.(options) ?? new AcpClient(options);
+		const clientOptions = { ...options, onAgentStderr: this.options.onAgentStderr, onAgentSpawn: this.options.onAgentSpawn, spawnCwd: this.options.spawnCwd, inheritProcessEnv: this.options.inheritProcessEnv };
+		return this.deps.clientFactory?.(clientOptions) ?? new AcpClient(clientOptions);
 	}
 	async readPendingPersistentClient(record, options) {
 		const pendingClient = this.pendingPersistentClients.get(record.acpxRecordId);
@@ -982,6 +983,7 @@ var AcpRuntimeManager = class {
 				client: turn.client,
 				sessionId,
 				prompt: task.promptInput,
+				onTerminalSessionFailure: task.input.onTerminalSessionFailure,
 				timeoutMs: task.input.timeoutMs ?? this.options.timeoutMs,
 				conversation: turn.conversation,
 				promptMessageId: turn.promptMessageId
@@ -1586,6 +1588,7 @@ var AcpxRuntime = class {
 		const turnPromise = this.getManager().then((manager) => manager.startTurn({
 			handle,
 			text: input.text,
+			onTerminalSessionFailure: input.onTerminalSessionFailure,
 			attachments: input.attachments,
 			mode: input.mode,
 			sessionMode: state.mode,
@@ -1614,6 +1617,7 @@ var AcpxRuntime = class {
 		yield* (await this.getManager()).runTurn({
 			handle,
 			text: input.text,
+			onTerminalSessionFailure: input.onTerminalSessionFailure,
 			attachments: input.attachments,
 			mode: input.mode,
 			sessionMode: state.mode,
diff --git a/dist/session-options-jkYbBxGE.d.ts b/dist/session-options-jkYbBxGE.d.ts
index 9d37f377fb6a0828e0d2bc5a48754f3aa71509a4..22dda59e0b7616a20ad45218913e5d8f884bae49 100644
--- a/dist/session-options-jkYbBxGE.d.ts
+++ b/dist/session-options-jkYbBxGE.d.ts
@@ -84,6 +84,10 @@ type AcpClientOptions = {
   terminal?: boolean;
   suppressSdkConsoleErrors?: boolean;
   verbose?: boolean;
+  onAgentStderr?: (chunk: string) => void;
+  onAgentSpawn?: (meta: { pid: number; startedAt: string }) => Promise<void>;
+  spawnCwd?: string;
+  inheritProcessEnv?: boolean;
   sessionOptions?: {
     model?: string;
     allowedTools?: string[];