diff --git a/apps/web/src/composerDraftStore.test.ts b/apps/web/src/composerDraftStore.test.ts
index 20c6603f773b..69b4eb4c1e25 100644
--- a/apps/web/src/composerDraftStore.test.ts
+++ b/apps/web/src/composerDraftStore.test.ts
@@ -470,7 +470,10 @@ describe("composerDraftStore terminal contexts", () => {
     expect(draft?.terminalContexts.map((context) => context.id)).toEqual(["ctx-2", "ctx-1"]);
   });
 
-  it("omits terminal context text from persisted drafts", () => {
+  it("does not persist terminal context chips", () => {
+    useComposerDraftStore
+      .getState()
+      .setPrompt(threadRef, `${INLINE_TERMINAL_CONTEXT_PLACEHOLDER} keep this`);
     useComposerDraftStore
       .getState()
       .addTerminalContext(threadRef, makeTerminalContext({ id: "ctx-persist" }));
@@ -481,27 +484,19 @@ describe("composerDraftStore terminal contexts", () => {
       };
     };
     const persistedState = persistApi.getOptions().partialize(useComposerDraftStore.getState()) as {
-      draftsByThreadKey?: Record<string, { terminalContexts?: Array<Record<string, unknown>> }>;
+      draftsByThreadKey?: Record<
+        string,
+        { prompt?: string; terminalContexts?: Array<Record<string, unknown>> }
+      >;
     };
+    const persistedDraft =
+      persistedState.draftsByThreadKey?.[threadKeyFor(threadId, TEST_ENVIRONMENT_ID)];
 
-    expect(
-      persistedState.draftsByThreadKey?.[threadKeyFor(threadId, TEST_ENVIRONMENT_ID)]
-        ?.terminalContexts?.[0],
-      "Expected terminal context metadata to be persisted.",
-    ).toMatchObject({
-      id: "ctx-persist",
-      terminalId: "default",
-      terminalLabel: "Terminal 1",
-      lineStart: 4,
-      lineEnd: 5,
-    });
-    expect(
-      persistedState.draftsByThreadKey?.[threadKeyFor(threadId, TEST_ENVIRONMENT_ID)]
-        ?.terminalContexts?.[0]?.text,
-    ).toBeUndefined();
+    expect(persistedDraft?.terminalContexts).toBeUndefined();
+    expect(persistedDraft?.prompt).toBe(" keep this");
   });
 
-  it("hydrates persisted terminal contexts without in-memory snapshot text", () => {
+  it("drops persisted terminal context chips on hydrate", () => {
     const persistApi = useComposerDraftStore.persist as unknown as {
       getOptions: () => {
         merge: (
@@ -514,7 +509,7 @@ describe("composerDraftStore terminal contexts", () => {
       {
         draftsByThreadId: {
           [threadId]: {
-            prompt: INLINE_TERMINAL_CONTEXT_PLACEHOLDER,
+            prompt: `${INLINE_TERMINAL_CONTEXT_PLACEHOLDER} keep this`,
             attachments: [],
             terminalContexts: [
               {
@@ -535,16 +530,9 @@ describe("composerDraftStore terminal contexts", () => {
       useComposerDraftStore.getInitialState(),
     );
 
-    expect(mergedState.draftsByThreadKey[threadKeyFor(threadId)]?.terminalContexts).toMatchObject([
-      {
-        id: "ctx-rehydrated",
-        terminalId: "default",
-        terminalLabel: "Terminal 1",
-        lineStart: 4,
-        lineEnd: 5,
-        text: "",
-      },
-    ]);
+    const hydrated = mergedState.draftsByThreadKey[threadKeyFor(threadId)];
+    expect(hydrated?.terminalContexts).toEqual([]);
+    expect(hydrated?.prompt).toBe(" keep this");
   });
 
   it("sanitizes malformed persisted drafts during merge", () => {
diff --git a/apps/web/src/composerDraftStore.ts b/apps/web/src/composerDraftStore.ts
index f20385ee04f4..e2af27bbb621 100644
--- a/apps/web/src/composerDraftStore.ts
+++ b/apps/web/src/composerDraftStore.ts
@@ -1177,51 +1177,6 @@ function normalizePersistedElementContextDraft(
   };
 }
 
-function normalizePersistedTerminalContextDraft(
-  value: unknown,
-): PersistedTerminalContextDraft | null {
-  if (!value || typeof value !== "object") {
-    return null;
-  }
-  const candidate = value as Record<string, unknown>;
-  const id = candidate.id;
-  const threadId = candidate.threadId;
-  const createdAt = candidate.createdAt;
-  const lineStart = candidate.lineStart;
-  const lineEnd = candidate.lineEnd;
-  if (
-    typeof id !== "string" ||
-    id.length === 0 ||
-    typeof threadId !== "string" ||
-    threadId.length === 0 ||
-    typeof createdAt !== "string" ||
-    createdAt.length === 0 ||
-    typeof lineStart !== "number" ||
-    !Number.isFinite(lineStart) ||
-    typeof lineEnd !== "number" ||
-    !Number.isFinite(lineEnd)
-  ) {
-    return null;
-  }
-  const terminalId = typeof candidate.terminalId === "string" ? candidate.terminalId.trim() : "";
-  const terminalLabel =
-    typeof candidate.terminalLabel === "string" ? candidate.terminalLabel.trim() : "";
-  if (terminalId.length === 0 || terminalLabel.length === 0) {
-    return null;
-  }
-  const normalizedLineStart = Math.max(1, Math.floor(lineStart));
-  const normalizedLineEnd = Math.max(normalizedLineStart, Math.floor(lineEnd));
-  return {
-    id,
-    threadId: threadId as ThreadId,
-    createdAt,
-    terminalId,
-    terminalLabel,
-    lineStart: normalizedLineStart,
-    lineEnd: normalizedLineEnd,
-  };
-}
-
 function normalizeDraftThreadEnvMode(
   value: unknown,
   fallbackWorktreePath: string | null,
@@ -1694,12 +1649,6 @@ function normalizePersistedDraftsByThreadId(
           return normalized ? [normalized] : [];
         })
       : [];
-    const terminalContexts = Array.isArray(draftCandidate.terminalContexts)
-      ? draftCandidate.terminalContexts.flatMap((entry) => {
-          const normalized = normalizePersistedTerminalContextDraft(entry);
-          return normalized ? [normalized] : [];
-        })
-      : [];
     const elementContexts = Array.isArray(draftCandidate.elementContexts)
       ? draftCandidate.elementContexts.flatMap((entry) => {
           const normalized = normalizePersistedElementContextDraft(entry);
@@ -1716,10 +1665,7 @@ function normalizePersistedDraftsByThreadId(
       draftCandidate.interactionMode === "plan" || draftCandidate.interactionMode === "default"
         ? draftCandidate.interactionMode
         : null;
-    const prompt = ensureInlineTerminalContextPlaceholders(
-      promptCandidate,
-      terminalContexts.length,
-    );
+    const prompt = stripInlineTerminalContextPlaceholders(promptCandidate);
     // If the draft already has the v3 shape, use it directly
     const legacyDraftCandidate = draftValue as LegacyPersistedComposerThreadDraftState;
     let modelSelectionByProvider: Partial<Record<ProviderInstanceId, ModelSelection>> = {};
@@ -1769,9 +1715,8 @@ function normalizePersistedDraftsByThreadId(
     const hasModelData =
       Object.keys(modelSelectionByProvider).length > 0 || activeProvider !== null;
     if (
-      promptCandidate.length === 0 &&
+      prompt.length === 0 &&
       attachments.length === 0 &&
-      terminalContexts.length === 0 &&
       elementContexts.length === 0 &&
       reviewComments.length === 0 &&
       !hasModelData &&
@@ -1795,7 +1740,6 @@ function normalizePersistedDraftsByThreadId(
     nextDraftsByThreadKey[normalizedThreadKey] = {
       prompt,
       attachments,
-      ...(terminalContexts.length > 0 ? { terminalContexts } : {}),
       ...(elementContexts.length > 0 ? { elementContexts } : {}),
       ...(reviewComments.length > 0 ? { reviewComments } : {}),
       ...(hasModelData
@@ -1899,10 +1843,10 @@ function partializeComposerDraftStoreState(
     }
     const hasModelData =
       Object.keys(draft.modelSelectionByProvider).length > 0 || draft.activeProvider !== null;
+    const persistablePrompt = stripInlineTerminalContextPlaceholders(draft.prompt);
     if (
-      draft.prompt.length === 0 &&
+      persistablePrompt.length === 0 &&
       draft.persistedAttachments.length === 0 &&
-      draft.terminalContexts.length === 0 &&
       draft.elementContexts.length === 0 &&
       draft.previewAnnotations.length === 0 &&
       draft.reviewComments.length === 0 &&
@@ -1913,21 +1857,8 @@ function partializeComposerDraftStoreState(
       continue;
     }
     const persistedDraft: DeepMutable<PersistedComposerThreadDraftState> = {
-      prompt: draft.prompt,
+      prompt: persistablePrompt,
       attachments: draft.persistedAttachments,
-      ...(draft.terminalContexts.length > 0
-        ? {
-            terminalContexts: draft.terminalContexts.map((context) => ({
-              id: context.id,
-              threadId: context.threadId,
-              createdAt: context.createdAt,
-              terminalId: context.terminalId,
-              terminalLabel: context.terminalLabel,
-              lineStart: context.lineStart,
-              lineEnd: context.lineEnd,
-            })),
-          }
-        : {}),
       ...(draft.elementContexts.length > 0
         ? {
             elementContexts: draft.elementContexts.map((context) => ({
@@ -2193,15 +2124,11 @@ function toHydratedThreadDraft(
   const activeProvider = normalizeProviderInstanceId(persistedDraft.activeProvider) ?? null;
 
   return {
-    prompt: persistedDraft.prompt,
+    prompt: stripInlineTerminalContextPlaceholders(persistedDraft.prompt),
     images: hydrateImagesFromPersisted(persistedDraft.attachments),
     nonPersistedImageIds: [],
     persistedAttachments: [...persistedDraft.attachments],
-    terminalContexts:
-      persistedDraft.terminalContexts?.map((context) => ({
-        ...context,
-        text: "",
-      })) ?? [],
+    terminalContexts: [],
     elementContexts:
       persistedDraft.elementContexts?.map((context) => ({
         ...context,