diff --git a/packages/adapters/claude-local/src/server/parse.test.ts b/packages/adapters/claude-local/src/server/parse.test.ts
index 3607223e6689..31b40498c1de 100644
--- a/packages/adapters/claude-local/src/server/parse.test.ts
+++ b/packages/adapters/claude-local/src/server/parse.test.ts
@@ -156,6 +156,69 @@ describe("isClaudeTransientUpstreamError — transcript independence (PEN-3223)"
   });
 });
 
+describe("isClaudeTransientUpstreamError — login veto transcript independence (PEN-3259)", () => {
+  const capacity429 = {
+    type: "result",
+    subtype: "success",
+    is_error: true,
+    api_error_status: 429,
+    result:
+      "API Error: Request rejected (429) · All Claude subscription capacity for this tenant is " +
+      "rate-limited; capacity may reset at 2026-09-13T10:19:59.613Z; retry in 1106s",
+  };
+
+  // This copy's CLAUDE_AUTH_REQUIRED_RE does NOT match the bare word
+  // `unauthorized` — unlike the k8s twin's — so the transcript here quotes a
+  // phrase this copy actually matches (`failed to authenticate`). Picking a token
+  // the regex ignores would make the test pass without exercising the change.
+  const authMentioningStdout = [
+    '{"type":"system","subtype":"init","session_id":"s1","model":"claude-opus-4-6"}',
+    '{"type":"user","message":{"role":"user","content":[{"tool_use_id":"t1","type":"tool_result",' +
+      '"content":"deploy.log: worker failed to authenticate against the registry, retrying"}]}}',
+  ].join("\n");
+
+  it("keeps a genuine 429 transient when the transcript merely mentions auth", () => {
+    expect(
+      isClaudeTransientUpstreamError({ parsed: capacity429, stdout: authMentioningStdout }),
+    ).toBe(true);
+  });
+
+  it("classifies that 429 identically with and without the auth-mentioning transcript", () => {
+    expect(isClaudeTransientUpstreamError({ parsed: capacity429, stdout: authMentioningStdout })).toBe(
+      isClaudeTransientUpstreamError({ parsed: capacity429, stdout: "" }),
+    );
+  });
+
+  it("still vetoes when the terminal result event itself reports a login requirement", () => {
+    expect(
+      isClaudeTransientUpstreamError({
+        parsed: {
+          type: "result",
+          subtype: "success",
+          is_error: true,
+          api_error_status: 429,
+          result: "API Error: rate limited — not logged in; please run `claude login`",
+        },
+        stdout: "",
+      }),
+    ).toBe(false);
+  });
+
+  // This path is LIVE in this copy (unlike the k8s twin): execute.ts calls the
+  // classifier directly from its `!parsed` fallback, where the transcript is the
+  // only surface that can carry the CLI's login prompt.
+  it("still vetoes a transcript login prompt when no result event ever arrived", () => {
+    expect(
+      isClaudeTransientUpstreamError({
+        parsed: null,
+        stdout: "API Error: 429 rate_limit_error\nNot logged in. Please run `claude login`.",
+        stderr: "",
+        errorMessage: "Claude exited with code 1",
+      }),
+    ).toBe(false);
+  });
+});
+
 describe("isClaudeTransientUpstreamError", () => {
   it("classifies the 'out of extra usage' subscription window failure as provider quota", () => {
     expect(
diff --git a/packages/adapters/claude-local/src/server/parse.ts b/packages/adapters/claude-local/src/server/parse.ts
index a1963cf6bed5..9403de07aa66 100644
--- a/packages/adapters/claude-local/src/server/parse.ts
+++ b/packages/adapters/claude-local/src/server/parse.ts
@@ -659,12 +659,32 @@ export function isClaudeTransientUpstreamError(input: {
   if (parsed && (isClaudeMaxTurnsResult(parsed) || isClaudeUnknownSessionError(parsed) || isClaudePoisonedPreviousMessageIdError(parsed) || isClaudeImageProcessingError(parsed))) {
     return false;
   }
-  // The login and quota vetoes deliberately still read the whole transcript. Both
-  // can only ever SUPPRESS the transient label, so narrowing them would widen what
-  // this function grants — the opposite of this rule's defect. See PEN-3223.
+  // The login veto reads the same bounded surfaces as the haystack below, under
+  // the same `parsed` condition and for the same reason (PEN-3259). Twin of the
+  // change in `vendor/paperclip-adapter-claude-k8s/src/server/parse.ts`, which
+  // carries the full measurement. `detectClaudeLoginRequired` itself is unchanged
+  // and still reads `stdout` for its other callers, which ask whether the run
+  // needs re-authentication before any result event exists; what changes is what
+  // THIS rule passes it.
+  //
+  // This copy is the MORE exposed of the two, not the less. Its
+  // CLAUDE_AUTH_REQUIRED_RE does not match the bare word `unauthorized` (the k8s
+  // twin's does), but it does match `failed to authenticate` — which is ordinary
+  // output from git, gh, ssh and container registries rather than anything the
+  // Claude CLI says about its own session. Evaluating both copies' regexes over
+  // the same 446 reconstructed transcripts: this one fires on 308, the k8s twin
+  // on 91, and `failed to authenticate` alone accounts for 285 of the 308.
+  // (Those transcripts are k8s pod logs, so this is an exposure comparison of the
+  // two patterns against representative agent output, not a claim about runs this
+  // adapter served.)
+  //
+  // The quota veto below deliberately keeps the wide haystack: narrowing a second
+  // veto in the same change would grant a second retry family off one measurement,
+  // and `isClaudeProviderQuotaError` routes to a different outcome than this rule.
+  // Same latent shape, tracked separately rather than swept in.
   const loginMeta = detectClaudeLoginRequired({
     parsed,
-    stdout: input.stdout ?? "",
+    stdout: parsed ? "" : (input.stdout ?? ""),
     stderr: input.stderr ?? "",
   });
   if (loginMeta.requiresLogin) return false;
diff --git a/vendor/paperclip-adapter-claude-k8s/PROVENANCE.md b/vendor/paperclip-adapter-claude-k8s/PROVENANCE.md
index db8f863856d8..0e1874591d23 100644
--- a/vendor/paperclip-adapter-claude-k8s/PROVENANCE.md
+++ b/vendor/paperclip-adapter-claude-k8s/PROVENANCE.md
@@ -96,7 +96,7 @@ A manifest of `sha256(path)` over all 41 in-tree files, sorted by path under
 `LC_ALL=C`, itself hashes to:
 
 ```
-11d9dc9bd0f4539f02cb83959fd3857bae53eec8a5b59f17d5e0505fda5c148e
+61714ceda78285c3335bac59a08dc54b33845cd09c0bab61c52fac6b21fdd9a9
 ```
 
 Regenerate with:
diff --git a/vendor/paperclip-adapter-claude-k8s/src/server/parse.test.ts b/vendor/paperclip-adapter-claude-k8s/src/server/parse.test.ts
index 9d790260e7f1..19345ebfcb43 100644
--- a/vendor/paperclip-adapter-claude-k8s/src/server/parse.test.ts
+++ b/vendor/paperclip-adapter-claude-k8s/src/server/parse.test.ts
@@ -442,6 +442,124 @@ describe("isClaudeTransientUpstreamError — transcript independence (PEN-3223)"
   });
 });
 
+describe("isClaudeTransientUpstreamError — login veto transcript independence (PEN-3259)", () => {
+  // The byte-identical shape observed on the vetoed capacity refusals in the
+  // 2026-09-12 corpus: an unambiguous provider 429 on the terminal result event.
+  const capacity429 = {
+    type: "result",
+    subtype: "success",
+    is_error: true,
+    api_error_status: 429,
+    result:
+      "API Error: Request rejected (429) · All Claude subscription capacity for this tenant is " +
+      "rate-limited; capacity may reset at 2026-09-13T10:19:59.613Z; retry in 1106s",
+  };
+
+  // A transcript that merely *mentions* auth. `CLAUDE_AUTH_REQUIRED_RE` in this
+  // copy matches the bare word `unauthorized`, so an agent reading a 401 handler,
+  // tailing a log, or working on an auth ticket trips it — as this issue's own
+  // text would. None of this is the CLI asking to be logged in.
+  const authMentioningStdout = [
+    '{"type":"system","subtype":"init","session_id":"s1","model":"claude-opus-4-6"}',
+    '{"type":"user","message":{"role":"user","content":[{"tool_use_id":"t1","type":"tool_result",' +
+      '"content":"src/auth.ts:42  if (!token) return res.status(401).send(\\"unauthorized\\");"}]}}',
+    '{"type":"assistant","message":{"id":"m1","content":[{"type":"text",' +
+      '"text":"That branch returns unauthorized when the header is absent."}]}}',
+  ].join("\n");
+
+  it("keeps a genuine 429 transient when the transcript merely mentions auth", () => {
+    expect(
+      isClaudeTransientUpstreamError({ parsed: capacity429, stdout: authMentioningStdout }),
+    ).toBe(true);
+  });
+
+  it("classifies that 429 identically with and without the auth-mentioning transcript", () => {
+    const withTranscript = isClaudeTransientUpstreamError({
+      parsed: capacity429,
+      stdout: authMentioningStdout,
+    });
+    const withoutTranscript = isClaudeTransientUpstreamError({
+      parsed: capacity429,
+      stdout: "",
+    });
+    expect(withTranscript).toBe(withoutTranscript);
+    expect(withTranscript).toBe(true);
+  });
+
+  it("routes that 429 to the transient retry family end to end", () => {
+    expect(
+      classifyClaudeUpstreamFailure({
+        failed: true,
+        zeroTokenProgress: false,
+        parsed: capacity429,
+        stdout: authMentioningStdout,
+        errorMessage: describeClaudeFailure(capacity429),
+      }),
+    ).toEqual({
+      family: "transient_upstream",
+      errorCode: "claude_transient_upstream",
+      capacityCode: null,
+    });
+  });
+
+  // The narrowing must not blind the veto to a REAL auth failure. When the run is
+  // genuinely unauthenticated the result event says so on its own bounded surface,
+  // which is still read.
+  it("still vetoes when the terminal result event itself reports a login requirement", () => {
+    expect(
+      isClaudeTransientUpstreamError({
+        parsed: {
+          type: "result",
+          subtype: "success",
+          is_error: true,
+          api_error_status: 429,
+          result: "API Error: rate limited — not logged in; please run `claude login`",
+        },
+        stdout: "",
+      }),
+    ).toBe(false);
+  });
+
+  it("still vetoes on an auth failure reported through parsed.errors[]", () => {
+    expect(
+      isClaudeTransientUpstreamError({
+        parsed: {
+          type: "result",
+          subtype: "success",
+          is_error: true,
+          result: "API Error: 503 service unavailable",
+          errors: [{ message: "authentication required" }],
+        },
+        stdout: "",
+      }),
+    ).toBe(false);
+  });
+
+  it("still vetoes on an auth failure reported on stderr", () => {
+    expect(
+      isClaudeTransientUpstreamError({
+        parsed: capacity429,
+        stdout: authMentioningStdout,
+        stderr: "Invalid API key · Please run `claude login`",
+      }),
+    ).toBe(false);
+  });
+
+  // The transcript read is retained where it is the only surface that can carry a
+  // login prompt: the CLI dying before it emits a result event. Unreachable from
+  // `classifyClaudeUpstreamFailure` in this copy, live in the `claude-local` twin.
+  it("still vetoes a transcript login prompt when no result event ever arrived", () => {
+    expect(
+      isClaudeTransientUpstreamError({
+        parsed: null,
+        stdout: "API Error: 429 rate_limit_error\nNot logged in. Please run `claude login`.",
+        stderr: "",
+        errorMessage: "Claude exited with code 1",
+      }),
+    ).toBe(false);
+  });
+});
+
 describe("matchClaudeUpstreamCapacityCode", () => {
   it("returns the penstock exhaustion code from Claude's embedded provider JSON", () => {
     expect(
diff --git a/vendor/paperclip-adapter-claude-k8s/src/server/parse.ts b/vendor/paperclip-adapter-claude-k8s/src/server/parse.ts
index bc7a9ce21300..702a86bd5a23 100644
--- a/vendor/paperclip-adapter-claude-k8s/src/server/parse.ts
+++ b/vendor/paperclip-adapter-claude-k8s/src/server/parse.ts
@@ -394,21 +394,56 @@ export function isClaudeTransientUpstreamError(input: {
   )) {
     return false;
   }
-  // The login veto deliberately still reads the whole transcript, and that is a
-  // scope line rather than a clean bill of health. It can only ever SUPPRESS the
-  // transient label, so narrowing it would widen what this function grants — the
-  // opposite of this rule's defect — and a login prompt is emitted before any
-  // result event, where this classifier is unreachable anyway.
+  // The login veto reads the same bounded surfaces as the haystack below, under
+  // the same `parsed` condition and for the same reason (PEN-3259, the follow-up
+  // this comment used to defer). `stdout` is the whole pod log, so a veto that
+  // reads it suppresses the transient label from *transcript content* rather than
+  // from the fault — the mirror image of PEN-3223's defect, aimed at a true label
+  // instead of a false one.
   //
-  // It does carry the same defect mirrored into suppression, and that is live, not
-  // theoretical: in the PEN-3223 corpus 2 of the 9 genuine `api_error_status: 429`
-  // capacity refusals are vetoed here despite their own bounded surfaces matching,
-  // because an auth-shaped token appears somewhere in their transcript. Tracked
-  // separately rather than fixed alongside, because relaxing a veto grants retry
-  // families and needs its own evidence.
+  // Measured on 446 failed runs carrying a terminal result event (retained pod
+  // logs from 2026-09-12 on; 403 ×281, 429 ×95, 503 ×70). On that population the
+  // transcript-reading veto fires 91 times and the bounded-surface veto fires
+  // **0** times — i.e. not one run in the corpus reports an auth failure on its
+  // own result event, so every firing was transcript-only. 89 of the 91 are the
+  // bare word `unauthorized`, which any agent reading a 401 handler or tailing a
+  // log will write; this issue's own text would do it.
+  //
+  // What narrowing admits, enumerated rather than counted: 27 runs move from "no
+  // family at all" to `transient_upstream` — 19 Penstock capacity refusals ("All
+  // Claude subscription capacity for this tenant is rate-limited", each carrying
+  // an explicit reset timestamp) and 8 Anthropic 503s ("Service temporarily
+  // unavailable. This is a server-side issue, usually temporary"). Both families
+  // are transient by definition. **No 403 is admitted** — after PEN-3223 a 403's
+  // bounded surfaces do not match the transient regex, so the veto was doing no
+  // work on the other 64 firings. Nothing moves the other way: 0 runs lose a
+  // transient label. The widening is exactly those two families and nothing else.
+  //
+  // THAT SAFETY PROPERTY IS INHERITED FROM PEN-3223, NOT INTRINSIC — so do not
+  // cherry-pick this hunk ahead of it. Measured as a counterfactual on the same
+  // 446 runs: on the pre-PEN-3223 wide haystack this narrowing alone takes the
+  // transient label from 237 runs to 301, and the 403s in it from 99 to **136**.
+  // Without the haystack narrowing in front of it, relaxing the veto makes
+  // PEN-3223's defect worse rather than fixing this one; with it, 403s go to 0.
+  //
+  // Note what is NOT changed: `detectClaudeLoginRequired` is shared and is correct
+  // as written. Its other callers ask "does this run need re-authentication?"
+  // before any result event exists, where the transcript is the only surface that
+  // carries the prompt. What changes is what THIS rule passes it.
+  //
+  // Narrowing a veto grants retry families, so it is gated on the same `parsed`
+  // condition rather than applied unconditionally: with no result event there are
+  // no bounded surfaces, the CLI's login prompt is emitted before any result
+  // event, and that is exactly the shape the transcript read exists to catch.
+  //
+  // `stderr` is deliberately retained, matching `buildClaudeTerminalResultHaystack`.
+  // It is measured inert rather than assumed so: on all 446 runs, including or
+  // excluding it changes the verdict 0 times. It is kept because it is bounded
+  // CLI diagnostic output, so it is the right surface for a login prompt on a run
+  // that did produce a result event.
   const loginMeta = detectClaudeLoginRequired({
     parsed,
-    stdout: input.stdout ?? "",
+    stdout: parsed ? "" : (input.stdout ?? ""),
     stderr: input.stderr ?? "",
   });
   if (loginMeta.requiresLogin) return false;