diff --git a/apps/web/src/chat/markdown.test.ts b/apps/web/src/chat/markdown.test.ts
index fc56ed534..27ed00cc8 100644
--- a/apps/web/src/chat/markdown.test.ts
+++ b/apps/web/src/chat/markdown.test.ts
@@ -72,6 +72,17 @@ test("Chat Markdown admits formatting without document features", () => {
 	expect(markdown("Planner wrote **strongly**.")).toContain("<strong>strongly</strong>");
 });
 
+test("indentation keeps nested lists and code blocks intact", () => {
+	let nested =
+		/<li>parent\s*<ul>\s*<li>child<\/li>\s*<li>sibling<\/li>\s*<\/ul>\s*<\/li>\s*<li>next<\/li>/;
+
+	expect(markdown("- parent\n  - child\n  - sibling\n- next")).toMatch(nested);
+	expect(markdown("- parent\n    - child\n    - sibling\n- next")).toMatch(nested);
+	expect(markdown("1. parent\n   - child\n   - sibling\n2. next")).toMatch(nested);
+	expect(markdown("```py\nif ready:\n    run()\n```")).toContain("if ready:\n    run()");
+	expect(markdown("Ask @chopin about it")).toContain("Ask about it");
+});
+
 test("authoritative ranges render internal chips inside ordinary Markdown", () => {
 	let source = "@chopin Read **#Release: v2 (API)** and [the docs](https://example.com).";
 	let markup = markdown(source, [reference(source, "#Release: v2 (API)")]);
diff --git a/apps/web/src/chat/references.ts b/apps/web/src/chat/references.ts
index bebd7b2d0..bffdcecb7 100644
--- a/apps/web/src/chat/references.ts
+++ b/apps/web/src/chat/references.ts
@@ -490,6 +490,15 @@ function projectedDisplayUnits(source: string, references: Chat.Reference[]): Di
 			&& !word(source[offset + MENTION.length])
 		) {
 			offset += MENTION.length - 1;
+			// Whitespace is Markdown structure (indentation, code, hard breaks), so
+			// only the space left doubled by the removed mention is dropped.
+			let previous = units.at(-1);
+			if (previous && !previous.protected && /[^\S\n]/.test(previous.value)) {
+				while (
+					/[^\S\n]/.test(source[offset + 1] ?? "")
+					&& !protectedRange(references, offset + 1, offset + 2)
+				) offset++;
+			}
 			continue;
 		}
 		units.push({
@@ -499,23 +508,7 @@ function projectedDisplayUnits(source: string, references: Chat.Reference[]): Di
 		});
 	}
 
-	let collapsed: DisplayUnit[] = [];
-	for (let index = 0; index < units.length;) {
-		let current = units[index]!;
-		if (current.protected || !/[^\S\n]/.test(current.value)) {
-			collapsed.push(current);
-			index++;
-			continue;
-		}
-		let end = index + 1;
-		while (
-			end < units.length
-			&& !units[end]!.protected
-			&& /[^\S\n]/.test(units[end]!.value)
-		) end++;
-		collapsed.push(end - index >= 2 ? { ...current, value: " " } : current);
-		index = end;
-	}
+	let collapsed = units;
 	while (collapsed.length > 0 && /\s/.test(collapsed[0]!.value)) collapsed.shift();
 	while (collapsed.length > 0 && /\s/.test(collapsed.at(-1)!.value)) collapsed.pop();
 
diff --git a/e2e/chat-composer.e2e.ts b/e2e/chat-composer.e2e.ts
index 65d653c0f..56f561f7f 100644
--- a/e2e/chat-composer.e2e.ts
+++ b/e2e/chat-composer.e2e.ts
@@ -228,6 +228,24 @@ test("switching to Chat removes multiple addresses while preserving a document m
 	await expect(reference).toHaveAttribute("data-document-id", target);
 });
 
+test("a sent message keeps its nested list nested", async ({ join }) => {
+	let chat = chatPane(await join("ana"));
+	let input = chatInput(chat);
+	await fillChat(input, "Plan:\n\n- parent\n  - child\n    - grandchild\n- next");
+	await input.press("Enter");
+
+	let message = chat.locator("[data-chat-markdown]").filter({ hasText: "grandchild" });
+	let parent = message.getByRole("listitem").filter({ hasText: "parent" }).first();
+	let child = parent.getByRole("list").getByRole("listitem").filter({ hasText: "child" }).first();
+	let grandchild = child.getByRole("list").getByRole("listitem").filter({ hasText: "grandchild" });
+	await expect(grandchild).toHaveCount(1);
+	await expect(message.getByRole("listitem").filter({ hasText: "next" }).last())
+		.not.toContainText("child");
+	let left = async (item: typeof parent) => (await item.boundingBox())!.x;
+	expect(await left(child)).toBeGreaterThan(await left(parent));
+	expect(await left(grandchild)).toBeGreaterThan(await left(child));
+});
+
 test("context-menu paste undo restores the replaced native selection", async ({ join, page }) => {
 	let input = chatInput(chatPane(await join("ana")));
 	await input.fill("hello world");