diff --git a/src/QueryEngine.ts b/src/QueryEngine.ts
index 241f04108..0ec4ce49a 100644
--- a/src/QueryEngine.ts
+++ b/src/QueryEngine.ts
@@ -977,6 +977,15 @@ export class QueryEngine {
               uuid: msg.uuid,
             }
           }
+          // Proactive truncation: prevent unbounded growth when API doesn't
+          // return compact_boundary (e.g. third-party compat layers).
+          if (feature('HISTORY_SNIP') && snipModule) {
+            const truncated = snipModule.proactiveTruncate(this.mutableMessages)
+            if (truncated !== this.mutableMessages) {
+              this.mutableMessages.length = 0
+              this.mutableMessages.push(...truncated)
+            }
+          }
           // Don't yield other system messages in headless mode
           break
         }
diff --git a/src/services/compact/snipCompact.ts b/src/services/compact/snipCompact.ts
index ecd72176e..3be2ef624 100644
--- a/src/services/compact/snipCompact.ts
+++ b/src/services/compact/snipCompact.ts
@@ -1,17 +1,239 @@
-// Auto-generated stub — replace with real implementation
-export {};
+import type { Message } from 'src/types/message.js'
 
-import type { Message } from 'src/types/message';
+/**
+ * Estimated characters per token (conservative for mixed code/text).
+ */
+const CHARS_PER_TOKEN = 4
 
-export const isSnipMarkerMessage: (message: Message) => boolean = () => false;
-export const snipCompactIfNeeded: (
+/**
+ * Minimum message count before nudging the model to consider snipping.
+ */
+const SNIP_NUDGE_THRESHOLD = 30
+
+/**
+ * Text shown to the model as a nudge when the conversation is long enough
+ * to benefit from snipping.
+ */
+export const SNIP_NUDGE_TEXT: string =
+  'The conversation history is getting long. Consider using the /force-snip command or the snip tool to compress older messages, freeing context window space for continued work.'
+
+/**
+ * Check whether a message is an internal snip marker (not user-facing).
+ * Snip markers are system messages injected by the snip tool to track
+ * which messages have been registered for future removal.
+ */
+export function isSnipMarkerMessage(message: Message): boolean {
+  if (message.type !== 'system') return false
+  return (message as Record<string, unknown>).subtype === 'snip_marker'
+}
+
+/**
+ * Estimate the token count of a single message by serialising its content.
+ * This is a rough heuristic (~4 chars per token) used to report
+ * tokensFreed; it does not need to be exact.
+ */
+function estimateMessageTokens(message: Message): number {
+  const content = message.message?.content
+  let chars = 0
+  if (typeof content === 'string') {
+    chars = content.length
+  } else if (Array.isArray(content)) {
+    for (const block of content) {
+      if (typeof block === 'string') {
+        chars += (block as string).length
+      } else if (block && typeof block === 'object') {
+        const obj = block as unknown as Record<string, unknown>
+        const text = obj.text ?? obj.content
+        if (typeof text === 'string') {
+          chars += text.length
+        } else {
+          chars += JSON.stringify(block).length
+        }
+      }
+    }
+  } else if (content !== null && content !== undefined) {
+    chars = JSON.stringify(content).length
+  }
+  return Math.max(1, Math.ceil(chars / CHARS_PER_TOKEN))
+}
+
+/**
+ * Scan the message array for the last `snip_boundary` system message and,
+ * if found, remove all messages whose UUIDs appear in its
+ * `snipMetadata.removedUuids`.
+ *
+ * This is the core memory-saving function. When a snip boundary exists:
+ * 1. All messages listed in `removedUuids` are filtered out.
+ * 2. The boundary message itself is kept (it records what was removed).
+ * 3. Messages not in `removedUuids` (including post-boundary messages)
+ *    are preserved.
+ *
+ * Called from:
+ * - `query.ts` — strips snipped messages from the model-facing array
+ *   before sending to the API.
+ * - `QueryEngine.ts` `snipReplay` — trims `mutableMessages` so the
+ *   in-memory store does not grow without bound in long SDK sessions.
+ *
+ * @param messages  Full message array (may contain a snip_boundary).
+ * @param options   `force` — if true, always execute when a boundary is
+ *                  present. Without `force`, the function still executes
+ *                  if a boundary is found (the "if needed" refers to
+ *                  whether a boundary exists, not a token threshold).
+ */
+export function snipCompactIfNeeded(
   messages: Message[],
   options?: { force?: boolean },
-) => { messages: Message[]; executed: boolean; tokensFreed: number; boundaryMessage?: Message } = (messages) => ({
-  messages,
-  executed: false,
-  tokensFreed: 0,
-});
-export const isSnipRuntimeEnabled: () => boolean = () => false;
-export const shouldNudgeForSnips: (messages: Message[]) => boolean = () => false;
-export const SNIP_NUDGE_TEXT: string = '';
+): {
+  messages: Message[]
+  executed: boolean
+  tokensFreed: number
+  boundaryMessage?: Message
+} {
+  // Find the last snip_boundary message
+  let boundaryIdx = -1
+  let removedUuids: string[] | undefined
+
+  for (let i = messages.length - 1; i >= 0; i--) {
+    const msg = messages[i]!
+    if (
+      msg.type === 'system' &&
+      (msg as Record<string, unknown>).subtype === 'snip_boundary'
+    ) {
+      boundaryIdx = i
+      const meta = (msg as Record<string, unknown>).snipMetadata as
+        | { removedUuids?: string[] }
+        | undefined
+      removedUuids = meta?.removedUuids
+      break
+    }
+  }
+
+  if (boundaryIdx === -1) {
+    return { messages, executed: false, tokensFreed: 0 }
+  }
+
+  const boundaryMessage = messages[boundaryIdx]!
+
+  // No removedUuids metadata — fallback: keep boundary + everything after
+  if (!removedUuids || removedUuids.length === 0) {
+    const kept = messages.slice(boundaryIdx)
+    return {
+      messages: kept,
+      executed: true,
+      tokensFreed: 0,
+      boundaryMessage,
+    }
+  }
+
+  // Filter out messages whose UUIDs are listed in removedUuids
+  const removedSet = new Set(removedUuids)
+  const kept: Message[] = []
+  let tokensFreed = 0
+
+  for (const msg of messages) {
+    if (removedSet.has(msg.uuid)) {
+      tokensFreed += estimateMessageTokens(msg)
+      continue
+    }
+    kept.push(msg)
+  }
+
+  return {
+    messages: kept,
+    executed: true,
+    tokensFreed,
+    boundaryMessage,
+  }
+}
+
+/**
+ * Returns true when the snip runtime is active.
+ * Because this module is only loaded when the HISTORY_SNIP feature flag
+ * is enabled, this always returns true.
+ */
+export function isSnipRuntimeEnabled(): boolean {
+  return true
+}
+
+/**
+ * Determine whether the conversation is long enough to warrant a nudge
+ * to the model to consider snipping. Uses a simple message-count
+ * threshold rather than an expensive token count.
+ */
+export function shouldNudgeForSnips(messages: Message[]): boolean {
+  return messages.length >= SNIP_NUDGE_THRESHOLD
+}
+
+/**
+ * Maximum total character length of message content before proactive
+ * truncation kicks in. ~150 MB of string data corresponds to roughly
+ * 1.5x the default 200k-token context window at 4 chars/token — well
+ * beyond what any model can actually use in a single request.
+ */
+const PROACTIVE_TRUNCATE_CHARS = 150_000_000
+
+/**
+ * Minimum number of messages to keep when falling back to tail-only
+ * retention (i.e. when no compact_boundary exists in the array).
+ */
+const PROACTIVE_TRUNCATE_MIN_TAIL = 50
+
+/**
+ * Proactively truncate old messages when the in-memory store grows too
+ * large. Unlike `snipCompactIfNeeded` (which waits for a snip_boundary
+ * from the API), this runs client-side after every push — ensuring
+ * unbounded growth cannot happen even when the API never returns a
+ * compact_boundary (e.g. third-party compat layers).
+ *
+ * Strategy:
+ * 1. If a `compact_boundary` exists, keep it and everything after it.
+ * 2. Otherwise, keep only the last `PROACTIVE_TRUNCATE_MIN_TAIL` messages.
+ *
+ * Returns the same array reference when no truncation is needed.
+ */
+export function proactiveTruncate(messages: Message[]): Message[] {
+  if (messages.length < PROACTIVE_TRUNCATE_MIN_TAIL) return messages
+
+  let totalChars = 0
+  for (const msg of messages) {
+    const content = msg.message?.content
+    if (typeof content === 'string') {
+      totalChars += content.length
+    } else if (Array.isArray(content)) {
+      for (const block of content) {
+        if (typeof block === 'string') {
+          totalChars += (block as string).length
+        } else if (block && typeof block === 'object') {
+          const obj = block as unknown as Record<string, unknown>
+          const text = obj.text ?? obj.content
+          if (typeof text === 'string') {
+            totalChars += text.length
+          }
+        }
+      }
+    }
+  }
+
+  if (totalChars < PROACTIVE_TRUNCATE_CHARS) return messages
+
+  // Find last compact_boundary — the standard anchor point
+  let boundaryIdx = -1
+  for (let i = messages.length - 1; i >= 0; i--) {
+    const msg = messages[i]!
+    if (
+      msg.type === 'system' &&
+      (msg as Record<string, unknown>).subtype === 'compact_boundary'
+    ) {
+      boundaryIdx = i
+      break
+    }
+  }
+
+  const keepFrom =
+    boundaryIdx >= 0
+      ? boundaryIdx
+      : Math.max(0, messages.length - PROACTIVE_TRUNCATE_MIN_TAIL)
+  if (keepFrom === 0) return messages
+
+  return messages.slice(keepFrom)
+}
diff --git a/src/utils/telemetry/instrumentation.ts b/src/utils/telemetry/instrumentation.ts
index 224f04815..936e009f3 100644
--- a/src/utils/telemetry/instrumentation.ts
+++ b/src/utils/telemetry/instrumentation.ts
@@ -205,10 +205,49 @@ async function getOtlpReaders() {
 
   return exporters.map(exporter => {
     if ('export' in exporter) {
-      return new PeriodicExportingMetricReader({
+      const reader = new PeriodicExportingMetricReader({
         exporter,
         exportIntervalMillis: exportInterval,
       })
+      // Wrap the export callback to auto-shutdown the reader on auth
+      // failures (401/403). Without this the PeriodicExportingMetricReader's
+      // internal setInterval keeps retrying forever, leaking handles.
+      const originalExport = (
+        exporter as unknown as {
+          export: (
+            metrics: unknown,
+            callback: (result: { error?: Error }) => void,
+          ) => unknown
+        }
+      ).export.bind(exporter)
+      ;(
+        exporter as unknown as {
+          export: (
+            metrics: unknown,
+            callback: (result: { error?: Error }) => void,
+          ) => unknown
+        }
+      ).export = (metrics, callback) => {
+        return originalExport(metrics, result => {
+          if (result.error) {
+            const msg = result.error.message || ''
+            if (
+              msg.includes('401') ||
+              msg.includes('403') ||
+              msg.includes('Unauthorized') ||
+              msg.includes('authentication')
+            ) {
+              logForDebugging(
+                `[3P telemetry] Auth error detected, shutting down metric reader`,
+                { level: 'error' },
+              )
+              void reader.shutdown()
+            }
+          }
+          callback(result)
+        })
+      }
+      return reader
     }
     return exporter
   })