diff --git a/src/client/TextEditor.tsx b/src/client/TextEditor.tsx
index 66b0fd7..405f008 100644
--- a/src/client/TextEditor.tsx
+++ b/src/client/TextEditor.tsx
@@ -28,6 +28,7 @@ import { cmSurfaceTheme, CmThemeCompartment } from './cm-themes.ts'
 import { isDarkScheme, subscribeColorScheme } from './theme.ts'
 import { SandboxStatusBar } from './SandboxStatusBar.tsx'
 import { appendToDraft } from './conversation-draft.ts'
+import { useSelectionPopup } from './selection-popup.ts'
 import { buildSelectionInsert, linesOfSelection } from './selection-payload.ts'
 import { lazyChunkComponent } from './lazy-chunk.tsx'
 import { analyzeMarkdownHtml } from './markdown-html.ts'
@@ -41,13 +42,6 @@ import css from './sidebar.module.css'
 /** Previewable files (rendered output vs source editing). */
 type ViewMode = 'preview' | 'edit'
 
-/** The floating "add to conversation" action: payload + viewport anchor. */
-interface SelectionPopup {
-  insert: string
-  left: number
-  top: number
-}
-
 /**
  * The sandbox tokens of the HTML preview iframe. NO allow-same-origin (the
  * preview must stay in an opaque origin — with the route's own origin it
@@ -71,36 +65,23 @@ export function TextEditor(props: FileViewerProps) {
   const themeCompRef = useRef<CmThemeCompartment | null>(null)
   /** The app's resolved color scheme; the editor re-themes in place on flips. */
   const [dark, setDark] = useState(() => isDarkScheme())
-  /** The floating "add to conversation" popup (viewport-anchored; null = hidden). */
-  const [popup, setPopup] = useState<SelectionPopup | null>(null)
-  /** Live mirror of the popup state for click-time reads (no re-render race). */
-  const popupRef = useRef<SelectionPopup | null>(null)
   /** The markdown preview container (selection-containment + line lookup). */
   const mdRef = useRef<HTMLDivElement>(null)
+  const markdown = viewerId === 'markdown'
+  const html = viewerId === 'html'
 
-  const hidePopup = (): void => {
-    popupRef.current = null
-    setPopup(null)
-  }
-
-  /** Anchor the popup above the selection center; clamp inside the viewport. */
-  const showPopup = (insert: string, left: number, top: number): void => {
-    const next: SelectionPopup = {
-      insert,
-      left: Math.min(Math.max(left, 80), window.innerWidth - 80),
-      top,
-    }
-    popupRef.current = next
-    setPopup(next)
-  }
-
-  /** The popup button's click: insert the stored payload into the draft. */
-  const commitPopup = (): void => {
-    const current = popupRef.current
-    if (current === null) return
-    appendToDraft(ctx, scope.sessionId, current.insert)
-    hidePopup()
-  }
+  /**
+   * The floating "add to conversation" popup (viewport-anchored; null =
+   * hidden). The hook owns show/hide/commit plus the global dismissal
+   * listeners (outside mousedown, Escape, hidden tab/window, surface
+   * leaving the viewport) — see selection-popup.ts.
+   */
+  const selectionPopup = useSelectionPopup({
+    onCommit: (insert) => { appendToDraft(ctx, scope.sessionId, insert) },
+    // The surface that must stay on screen: the markdown preview container
+    // in preview mode, the CodeMirror host otherwise.
+    getSurface: () => (markdown && mode === 'preview' ? mdRef.current : hostRef.current),
+  })
 
   useEffect(() => subscribeColorScheme(() => { setDark(isDarkScheme()) }), [])
 
@@ -110,7 +91,7 @@ export function TextEditor(props: FileViewerProps) {
     setDraft(null)
     setDirty(false)
     setSaveState('idle')
-    hidePopup()
+    selectionPopup.hide()
   }, [content])
 
   // Create the CodeMirror editor once the content is loaded. The view owns
@@ -160,33 +141,33 @@ export function TextEditor(props: FileViewerProps) {
         ...(viewerId === 'code' || viewerId === 'markdown' ? [
           CodeMirrorView.updateListener.of((update) => {
             if (update.geometryChanged || update.viewportChanged) {
-              hidePopup()
+              selectionPopup.hide()
               return
             }
             if (!update.view.hasFocus) {
-              hidePopup()
+              selectionPopup.hide()
               return
             }
             if (!(update.selectionSet || update.docChanged || update.focusChanged)) return
             const sel = update.state.selection.main
             if (sel.empty) {
-              hidePopup()
+              selectionPopup.hide()
               return
             }
             const text = update.state.sliceDoc(sel.from, sel.to)
             if (text.trim() === '') {
-              hidePopup()
+              selectionPopup.hide()
               return
             }
             // Page coordinates (the document root may scroll); the popup is
             // position:fixed, so convert to viewport coordinates.
             const rect = update.view.coordsAtPos(sel.head)
             if (rect === null) {
-              hidePopup()
+              selectionPopup.hide()
               return
             }
             const doc = update.state.doc
-            showPopup(
+            selectionPopup.show(
               buildSelectionInsert(path, scope.cwd, {
                 start: doc.lineAt(sel.from).number,
                 end: doc.lineAt(sel.to).number,
@@ -223,7 +204,7 @@ export function TextEditor(props: FileViewerProps) {
   // it becomes visible again (CodeMirror sizes itself on reveal). A mode
   // flip also invalidates any anchored selection popup.
   useEffect(() => {
-    hidePopup()
+    selectionPopup.hide()
     if (mode === 'edit') viewRef.current?.requestMeasure()
   }, [mode])
 
@@ -254,8 +235,6 @@ export function TextEditor(props: FileViewerProps) {
     })
   }
 
-  const markdown = viewerId === 'markdown'
-  const html = viewerId === 'html'
   /** The markdown source the preview renders (draft wins over saved content). */
   const mdText = draft ?? content ?? ''
   /** The preview source: `mdText` with local image destinations rewritten to
@@ -307,22 +286,22 @@ export function TextEditor(props: FileViewerProps) {
   const handlePreviewMouseUp = (): void => {
     const sel = window.getSelection()
     if (sel === null || sel.isCollapsed || sel.anchorNode === null || sel.focusNode === null) {
-      hidePopup()
+      selectionPopup.hide()
       return
     }
     const host = mdRef.current
     if (host === null || !host.contains(sel.anchorNode) || !host.contains(sel.focusNode)) {
-      hidePopup()
+      selectionPopup.hide()
       return
     }
     const text = sel.toString()
     if (text.trim() === '') {
-      hidePopup()
+      selectionPopup.hide()
       return
     }
     const rect = sel.getRangeAt(0).getBoundingClientRect()
     const lines = linesOfSelection(mdText, text)
-    showPopup(
+    selectionPopup.show(
       buildSelectionInsert(path, scope.cwd, lines ?? undefined, text),
       rect.left + rect.width / 2,
       rect.top,
@@ -413,7 +392,7 @@ export function TextEditor(props: FileViewerProps) {
           className={css.editorMd}
           ref={mdRef}
           onMouseUp={handlePreviewMouseUp}
-          onScroll={hidePopup}
+          onScroll={selectionPopup.hide}
         >
           {/* The fence copy-button labels must come from this plugin's own
               dictionary: the DSH MarkdownText/CodeBlock are cordis-free and
@@ -461,15 +440,16 @@ export function TextEditor(props: FileViewerProps) {
           />
         </>
       )}
-      {popup !== null && createPortal(
+      {selectionPopup.popup !== null && createPortal(
         <button
           type="button"
+          ref={selectionPopup.buttonRef}
           className={css.selectionPopup}
-          style={{ left: popup.left, top: popup.top }}
+          style={{ left: selectionPopup.popup.left, top: selectionPopup.popup.top }}
           // Keep the selection (and CodeMirror focus) alive until the click
           // commits — without this the popup unmounts before click lands.
           onMouseDown={(event) => { event.preventDefault() }}
-          onClick={commitPopup}
+          onClick={selectionPopup.commit}
         >
           {t('addToConversation')}
         </button>,
diff --git a/src/client/conversation-draft.ts b/src/client/conversation-draft.ts
index 9047054..a565c38 100644
--- a/src/client/conversation-draft.ts
+++ b/src/client/conversation-draft.ts
@@ -1,29 +1,187 @@
 /**
- * Append text to the current session's composer draft through the
+ * Insert text into the current session's composer draft through the
  * conversation service — the shared path behind the explorer's @-reference
  * button and the viewer selection popup. The service is resolved lazily
  * through `ctx.get` (the inject-free read the app's own plugins use); a
  * missing service or scope degrades to a logged no-op, never a crash.
+ *
+ * Insert position (fixes upstream issue #425): the draft store only exposes
+ * the whole string (`getSnapshot().draft` + `setDraft(text)`) — there is no
+ * caret API on the conversation service. The composer's `<textarea>` keeps
+ * its last selection even while unfocused, so the live caret is probed from
+ * the DOM (guarded by a value-sync check), and the text is spliced at that
+ * position, replacing any live selection — with whitespace-aware joins, an
+ * insert into the middle of a sentence keeps single-space separation like
+ * the append path. An unknown/stale caret falls back to appending at the
+ * end (the pre-fix behavior).
+ *
+ * The caret is also *restored* after the insert: committing a programmatic
+ * draft change resets the controlled textarea's caret (observed landing at
+ * the start of the value), which would make every later insert probe the
+ * reset position and drift the stack (A|B + C + D ended up as |DACB). The
+ * placement (`placeComposerCaretAfterInsert`) puts the caret right after the
+ * inserted text once the value commit lands — the index accounts for the
+ * separating space on the left, so stacked inserts stay at their running
+ * position (A|B + C + D → ACD|B).
  */
 import type { Context, SidebarConversation } from '../context-types.ts'
 
+/** A resolved composer caret/selection in draft coordinates. */
+export interface DraftCaret {
+  start: number
+  end: number
+}
+
 /**
- * Append `text` to the session's composer draft (space-separated, like the
- * @-mentions). Returns false — and logs — when the conversation service or
- * the session scope is unavailable.
+ * The spliced draft plus the caret index (in that draft) right after the
+ * inserted text — the left-side separating space shifts the caret by one,
+ * which naive `start + text.length` misses (it would land before the tail).
+ */
+interface SpliceResult {
+  draft: string
+  caretAfter: number
+}
+
+/**
+ * Splice `text` into `draft` at `caret` (replacing any live selection) with
+ * whitespace-aware joins and report the caret position right after the
+ * inserted text. `caret === null` (position unknown) appends at the end,
+ * exactly like the original behavior.
+ */
+function spliceInsert(draft: string, text: string, caret: DraftCaret | null): SpliceResult {
+  if (caret === null || draft === '') {
+    const next = draft.trim() === '' ? text : `${draft} ${text}`
+    return { draft: next, caretAfter: next.length }
+  }
+  const prefix = draft.slice(0, caret.start)
+  const suffix = draft.slice(caret.end)
+  if (prefix === '' && suffix === '') return { draft: text, caretAfter: text.length }
+  // One separating space, but never doubled against adjacent whitespace
+  // (or the string edges) — mirrors how typing in the middle of a sentence
+  // behaves.
+  const left = prefix === '' || /\s$/.test(prefix) ? '' : ' '
+  const right = suffix === '' || /^\s/.test(suffix) ? '' : ' '
+  return {
+    draft: `${prefix}${left}${text}${right}${suffix}`,
+    caretAfter: prefix.length + left.length + text.length,
+  }
+}
+
+/**
+ * The spliced draft string (see {@link spliceInsert}); pure string math —
+ * unit-tested directly.
+ */
+export function insertAtCaret(draft: string, text: string, caret: DraftCaret | null): string {
+  return spliceInsert(draft, text, caret).draft
+}
+
+/**
+ * Locate the composer `<textarea>` in the conversation column: prefer the
+ * `data-phase`-tagged textarea (the composer's marker), falling back to any
+ * textarea in the column, then to a bare data-phase textarea (older host
+ * layouts without the column attribute). Null in jsdom-less hosts.
+ */
+function findComposerTextarea(): HTMLTextAreaElement | null {
+  if (typeof document === 'undefined') return null
+  const column = document.querySelector('#root [data-slot="conversation"]')
+  const find = (scope: ParentNode): HTMLTextAreaElement | null =>
+    scope.querySelector('textarea[data-phase]') ?? scope.querySelector('textarea')
+  return column !== null
+    ? find(column)
+    : document.querySelector<HTMLTextAreaElement>('textarea[data-phase]')
+}
+
+/**
+ * Resolve the composer's live caret from its DOM `<textarea>`. The draft
+ * store has no caret API, so the sidebar reads the composed input's selection
+ * directly; the value-sync check (`el.value === draft`) discards stale or
+ * wrong-composer reads — a caret must never be applied against a draft it
+ * was not measured on.
+ *
+ * Returns null when the composer is missing, disabled/read-only, out of
+ * sync with the store draft, or has no measurable selection (jsdom/odd
+ * hosts report null selectionStart/End).
+ */
+export function probeComposerCaret(draft: string): DraftCaret | null {
+  const el = findComposerTextarea()
+  if (el === null || el.disabled || el.readOnly) return null
+  if (el.value !== draft) return null
+  let start = el.selectionStart
+  let end = el.selectionEnd
+  if (typeof start !== 'number' || typeof end !== 'number') return null
+  if (!Number.isFinite(start) || !Number.isFinite(end)) return null
+  start = Math.max(0, Math.min(start, draft.length))
+  end = Math.max(start, Math.min(end, draft.length))
+  return { start, end }
+}
+
+/**
+ * Restore the composer caret to `caretIndex` after a programmatic
+ * `setDraft` commit. A controlled textarea update resets the caret (React
+ * commits the value asynchronously and the browser moves the caret to the
+ * start/end), so the placement is scheduled and retried across at most two
+ * animation frames (setTimeout fallback for jsdom), and only applied when
+ * the textarea still matches `expectedDraft` — a newer edit or a different
+ * composer wins the race untouched. The caret is clamped into the value
+ * bounds, mirroring how browsers clamp type-in positions.
+ */
+export function placeComposerCaretAfterInsert(expectedDraft: string, caretIndex: number): void {
+  let remaining = 2
+  let scheduled = false
+  const schedule = (fn: () => void): void => {
+    if (scheduled) return
+    scheduled = true
+    if (typeof requestAnimationFrame === 'function') requestAnimationFrame(fn)
+    else setTimeout(fn, 0)
+  }
+  const place = (): void => {
+    scheduled = false
+    if (remaining <= 0) return
+    remaining -= 1
+    const el = findComposerTextarea()
+    if (el === null || el.disabled || el.readOnly) return
+    if (el.value !== expectedDraft) {
+      // The commit has not landed yet (or a competing edit won) — one more
+      // frame before giving up.
+      schedule(place)
+      return
+    }
+    const clamped = Math.max(0, Math.min(caretIndex, el.value.length))
+    el.setSelectionRange(clamped, clamped)
+  }
+  schedule(place)
+}
+
+/**
+ * Insert `text` into the session's composer draft at the composer's live
+ * caret (see {@link probeComposerCaret}), falling back to appending at the
+ * end when the caret cannot be resolved. Returns false — and logs — when the
+ * conversation service or the session scope is unavailable.
  */
 export function appendToDraft(ctx: Context, sessionId: string, text: string): boolean {
   try {
     const actx = ctx.sessions.scope(sessionId)
-    if (actx === undefined) return false
+    if (actx === undefined) {
+      console.warn('[dsh-better-sidebar] draft insert skipped: no session scope', sessionId)
+      return false
+    }
     const conversation = ctx.get('conversation') as SidebarConversation | undefined
-    if (conversation === undefined) return false
+    if (conversation === undefined) {
+      console.warn('[dsh-better-sidebar] draft insert skipped: conversation service unavailable')
+      return false
+    }
     const input = conversation.input.for(actx)
     const draft = input.state.getSnapshot().draft
-    input.setDraft(draft.trim() === '' ? text : `${draft} ${text}`)
+    const caret = probeComposerCaret(draft)
+    const { draft: next, caretAfter } = spliceInsert(draft, text, caret)
+    input.setDraft(next)
+    // Put the caret right after the inserted text once the value commit
+    // lands — see the module doc for why this keeps stacked inserts at the
+    // running position.
+    placeComposerCaretAfterInsert(next, caretAfter)
     return true
   } catch (error) {
     console.warn('[dsh-better-sidebar] draft insert failed:', error)
     return false
   }
-}
+}
\ No newline at end of file
diff --git a/src/client/selection-popup.ts b/src/client/selection-popup.ts
new file mode 100644
index 0000000..5386d9c
--- /dev/null
+++ b/src/client/selection-popup.ts
@@ -0,0 +1,157 @@
+/**
+ * The floating "add selection to conversation" popup shared by the text
+ * viewers (markdown preview + the catch-all code viewer): a viewport-anchored
+ * button portaled to `document.body`, kept alive across the selection gesture
+ * and committed on click.
+ *
+ * Dismissal contract (fixes upstream issue #425): the popup must never
+ * outlive its editor surface. The sidebar keeps every tab MOUNTED — switching
+ * tabs only flips the pane cell to `display:none` and collapsing the panel
+ * translates it off-screen — while the portaled `position:fixed` button stays
+ * pinned to its viewport anchor, ignoring both. The caller already hides on
+ * surface scrolls, selection collapse and mode flips; this hook adds the
+ * global dismissal that covers everything else:
+ *
+ * - any `mousedown` outside the button (tab bar, composer, another pane,
+ *   the collapse toggle, …) closes it;
+ * - `Escape` closes it;
+ * - the document going hidden (`visibilitychange`) or the window losing
+ *   focus closes it;
+ * - an `IntersectionObserver` on the editor surface closes it as soon as the
+ *   surface leaves the viewport — the tab-switch (`display:none`) and
+ *   panel-collapse (translated off-screen) paths have no DOM events of their
+ *   own, so the geometry signal is the only reliable one.
+ *
+ * The button's own `mousedown` is never treated as an outside click: the
+ * caller preventDefaults it to keep the selection/caret alive until the
+ * click commits (the hook's capture-phase listener runs first and must not
+ * hide for it).
+ */
+import { useEffect, useRef, useState, type RefObject } from 'react'
+
+/** The floating "add to conversation" action: payload + viewport anchor. */
+export interface SelectionPopup {
+  insert: string
+  left: number
+  top: number
+}
+
+export interface SelectionPopupOptions {
+  /** Commit the payload into the composer draft (button click). */
+  onCommit(insert: string): void
+  /**
+   * The DOM surface that must stay on screen for the popup to live: the
+   * markdown preview container in preview mode, the CodeMirror host
+   * otherwise. Called lazily (refs are null until the content loads).
+   */
+  getSurface(): HTMLElement | null
+}
+
+export interface SelectionPopupControls {
+  /** The current popup (null = hidden). */
+  popup: SelectionPopup | null
+  /** Attach to the portaled button element. */
+  buttonRef: RefObject<HTMLButtonElement>
+  /** Anchor the popup above a selection (viewport-clamped). */
+  show(insert: string, left: number, top: number): void
+  /** Hide the popup (idempotent). */
+  hide(): void
+  /** The button's click: commit the stored payload, then hide. */
+  commit(): void
+}
+
+export function useSelectionPopup(options: SelectionPopupOptions): SelectionPopupControls {
+  // Latest-callback refs: the dismissal listeners live for the mount's
+  // lifetime, so they must not capture stale closures across renders.
+  const onCommitRef = useRef(options.onCommit)
+  const getSurfaceRef = useRef(options.getSurface)
+  onCommitRef.current = options.onCommit
+  getSurfaceRef.current = options.getSurface
+
+  const [popup, setPopup] = useState<SelectionPopup | null>(null)
+  /** Live mirror for click/event-time reads (no re-render race). */
+  const popupRef = useRef<SelectionPopup | null>(null)
+  /** The portaled button itself (for the outside-click guard). */
+  const buttonRef = useRef<HTMLButtonElement>(null)
+  /** The surface visibility observer (created lazily on open). */
+  const observerRef = useRef<IntersectionObserver | null>(null)
+
+  const show = (insert: string, left: number, top: number): void => {
+    const next: SelectionPopup = {
+      insert,
+      left: Math.min(Math.max(left, 80), window.innerWidth - 80),
+      top,
+    }
+    popupRef.current = next
+    setPopup(next)
+  }
+
+  const hide = (): void => {
+    popupRef.current = null
+    setPopup(null)
+  }
+
+  const commit = (): void => {
+    const current = popupRef.current
+    if (current === null) return
+    onCommitRef.current(current.insert)
+    hide()
+  }
+
+  // Global dismissal listeners, registered once; every handler reads the
+  // live popup ref so it no-ops while no popup is open.
+  useEffect(() => {
+    const onMouseDown = (event: MouseEvent): void => {
+      if (popupRef.current === null) return
+      const button = buttonRef.current
+      if (button !== null && (button === event.target || button.contains(event.target as Node))) return
+      hide()
+    }
+    const onKeyDown = (event: KeyboardEvent): void => {
+      if (event.key === 'Escape' && popupRef.current !== null) hide()
+    }
+    const onVisibilityChange = (): void => {
+      if (document.hidden && popupRef.current !== null) hide()
+    }
+    const onWindowBlur = (): void => {
+      if (popupRef.current !== null) hide()
+    }
+    document.addEventListener('mousedown', onMouseDown, true)
+    document.addEventListener('keydown', onKeyDown, true)
+    document.addEventListener('visibilitychange', onVisibilityChange)
+    window.addEventListener('blur', onWindowBlur)
+    return () => {
+      document.removeEventListener('mousedown', onMouseDown, true)
+      document.removeEventListener('keydown', onKeyDown, true)
+      document.removeEventListener('visibilitychange', onVisibilityChange)
+      window.removeEventListener('blur', onWindowBlur)
+      observerRef.current?.disconnect()
+      observerRef.current = null
+    }
+  }, [])
+
+  // Re-target the visibility observer whenever a popup opens: the surface
+  // refs may have been null at mount (content loads async, mode flips swap
+  // the preview container for the CodeMirror host), so the surface is only
+  // trustworthy at open time.
+  useEffect(() => {
+    if (popup === null) return
+    observerRef.current?.disconnect()
+    observerRef.current = null
+    if (typeof IntersectionObserver === 'undefined') return
+    const surface = getSurfaceRef.current()
+    if (surface === null) return
+    const observer = new IntersectionObserver((entries) => {
+      for (const entry of entries) {
+        if (!entry.isIntersecting) hide()
+      }
+    }, { threshold: 0 })
+    observerRef.current = observer
+    observer.observe(surface)
+    // eslint-disable-next-line react-hooks/exhaustive-deps -- the boolean
+    // flip is the only thing that must re-run this; an anchor move while
+    // open keeps the same surface.
+  }, [popup !== null])
+
+  return { popup, buttonRef, show, hide, commit }
+}
\ No newline at end of file
diff --git a/tests/conversation-draft.spec.ts b/tests/conversation-draft.spec.ts
new file mode 100644
index 0000000..3953c7d
--- /dev/null
+++ b/tests/conversation-draft.spec.ts
@@ -0,0 +1,240 @@
+/**
+ * conversation-draft spec — the caret-resolved composer insertion (upstream
+ * issue #425 ②). `insertAtCaret` is pure string math (splice with
+ * whitespace-aware joins); `probeComposerCaret` reads the live composer
+ * `<textarea>` selection out of the DOM, guarded by a value-sync check so a
+ * stale or wrong-composer caret is never applied; `placeComposerCaretAfterInsert`
+ * restores the caret right after the inserted text once the setDraft value
+ * commit lands, keeping stacked inserts at their running position.
+ */
+// @vitest-environment jsdom
+import { afterEach, describe, expect, it, vi } from 'vitest'
+import type { Context } from '../src/context-types.ts'
+import {
+  appendToDraft,
+  insertAtCaret,
+  placeComposerCaretAfterInsert,
+  probeComposerCaret,
+} from '../src/client/conversation-draft.ts'
+
+/**
+ * Mount a fake composer textarea inside the DSH conversation column
+ * (`#root [data-slot="conversation"] textarea[data-phase]`).
+ */
+function mountComposer(draft: string, selectionStart: number, selectionEnd: number): HTMLTextAreaElement {
+  const root = document.createElement('div')
+  root.id = 'root'
+  const column = document.createElement('div')
+  column.setAttribute('data-slot', 'conversation')
+  const textarea = document.createElement('textarea')
+  textarea.setAttribute('data-phase', 'plain')
+  textarea.value = draft
+  textarea.setSelectionRange(selectionStart, selectionEnd)
+  column.append(textarea)
+  root.append(column)
+  document.body.append(root)
+  return textarea
+}
+
+afterEach(() => {
+  document.body.innerHTML = ''
+})
+
+/** Let the scheduled caret placement (rAF or setTimeout fallback) settle. */
+const tick = (): Promise<void> => new Promise((resolve) => { setTimeout(resolve, 30) })
+
+describe('probeComposerCaret', () => {
+  it('returns the textarea selection when the DOM is in sync with the draft', () => {
+    mountComposer('hello world', 5, 5)
+    expect(probeComposerCaret('hello world')).toEqual({ start: 5, end: 5 })
+  })
+
+  it('reports a live selection range, not just a collapsed caret', () => {
+    mountComposer('hello world', 6, 11)
+    expect(probeComposerCaret('hello world')).toEqual({ start: 6, end: 11 })
+  })
+
+  it('returns null when no composer is mounted', () => {
+    expect(document.querySelector('textarea')).toBeNull()
+    expect(probeComposerCaret('anything')).toBeNull()
+  })
+
+  it('returns null when the composer DOM value is out of sync with the store draft', () => {
+    mountComposer('hello', 0, 0)
+    expect(probeComposerCaret('hello changed on the server')).toBeNull()
+  })
+
+  it('returns null for a disabled composer', () => {
+    const input = mountComposer('hello', 2, 2)
+    input.disabled = true
+    expect(probeComposerCaret('hello')).toBeNull()
+  })
+
+  it('returns null for a read-only composer', () => {
+    const input = mountComposer('hello', 2, 2)
+    input.readOnly = true
+    expect(probeComposerCaret('hello')).toBeNull()
+  })
+
+  it('clamps out-of-range selections into the draft bounds', () => {
+    const input = mountComposer('hi', 0, 0)
+    // Direct property writes (jsdom does not enforce bounds like browsers).
+    input.selectionStart = 5
+    input.selectionEnd = 9
+    expect(probeComposerCaret('hi')).toEqual({ start: 2, end: 2 })
+  })
+})
+
+describe('insertAtCaret', () => {
+  it('appends at the end when the caret is unknown (pre-fix behavior)', () => {
+    expect(insertAtCaret('', 'X', null)).toBe('X')
+    expect(insertAtCaret('hello', 'X', null)).toBe('hello X')
+    expect(insertAtCaret('   ', 'X', null)).toBe('X')
+  })
+
+  it('inserts at the caret in the middle of a sentence with one space each side', () => {
+    expect(insertAtCaret('hello world', 'CODE', { start: 5, end: 5 })).toBe('hello CODE world')
+  })
+
+  it('only adds the separating spaces the neighbors actually need', () => {
+    expect(insertAtCaret('one two', 'CODE', { start: 3, end: 3 })).toBe('one CODE two')
+    // Doubled gap, caret right after the word: the leading space is added,
+    // the two after the caret stay untouched (like typing in the gap).
+    expect(insertAtCaret('one  two', 'CODE', { start: 3, end: 3 })).toBe('one CODE  two')
+    // Doubled gap, caret on the second space: neither side needs a new
+    // space, both originals flank the insertion.
+    expect(insertAtCaret('one  two', 'CODE', { start: 4, end: 4 })).toBe('one CODE two')
+    expect(insertAtCaret('one two ', 'CODE', { start: 8, end: 8 })).toBe('one two CODE')
+  })
+
+  it('inserts at the start without a leading space', () => {
+    expect(insertAtCaret('hello', 'CODE', { start: 0, end: 0 })).toBe('CODE hello')
+  })
+
+  it('inserts at the end with a single trailing space', () => {
+    expect(insertAtCaret('hello', 'CODE', { start: 5, end: 5 })).toBe('hello CODE')
+  })
+
+  it('replaces the live selection', () => {
+    expect(insertAtCaret('a little tale', 'CODE', { start: 2, end: 8 })).toBe('a CODE tale')
+  })
+
+  it('replaces a selection surrounded by words with single-space joins', () => {
+    expect(insertAtCaret('abc def ghi', 'CODE', { start: 4, end: 7 })).toBe('abc CODE ghi')
+  })
+
+  it('replaces a selection spanning the whole draft', () => {
+    expect(insertAtCaret('old', 'CODE', { start: 0, end: 3 })).toBe('CODE')
+  })
+
+  it('handles an empty draft with a resolved caret', () => {
+    expect(insertAtCaret('', 'CODE', { start: 0, end: 0 })).toBe('CODE')
+  })
+})
+
+describe('placeComposerCaretAfterInsert', () => {
+  it('places the caret right after the inserted text once the value commits', async () => {
+    const input = mountComposer('AB', 1, 1) // pre-insert draft still shown
+    placeComposerCaretAfterInsert('A C B', 1 + 1)
+    input.value = 'A C B' // the setDraft commit lands
+    await tick()
+    expect(input.selectionStart).toBe(2)
+    expect(input.selectionEnd).toBe(2)
+  })
+
+  it('places the caret when the value already matches (no commit needed)', async () => {
+    const input = mountComposer('A C B', 0, 0)
+    placeComposerCaretAfterInsert('A C B', 2)
+    await tick()
+    expect(input.selectionStart).toBe(2)
+  })
+
+  it('clamps an out-of-range caret into the composer bounds', async () => {
+    const input = mountComposer('A C B', 0, 0)
+    placeComposerCaretAfterInsert('A C B', 99)
+    await tick()
+    expect(input.selectionStart).toBe(5)
+  })
+
+  it('does not clobber a composer that never matches the expected draft', async () => {
+    const input = mountComposer('OLD', 0, 0)
+    input.value = 'UNRELATED' // a competing update wins the race
+    input.setSelectionRange(1, 1)
+    placeComposerCaretAfterInsert('NEW DRAFT', 2)
+    await tick()
+    expect(input.selectionStart).toBe(1)
+  })
+
+  it('leaves the caret alone when no composer is mounted', async () => {
+    placeComposerCaretAfterInsert('X', 0)
+    await tick() // must not throw
+    expect(document.querySelector('textarea')).toBeNull()
+  })
+})
+
+describe('appendToDraft', () => {
+  /** A fake ctx exposing the conversation service face appendToDraft uses. */
+  function fakeCtx(
+    getDraft: () => string,
+    onSet: (next: string) => void,
+    withConversation = true,
+  ): Context {
+    const input = {
+      state: { getSnapshot: (): { draft: string } => ({ draft: getDraft() }) },
+      setDraft: (next: string): void => { onSet(next) },
+    }
+    return {
+      sessions: { scope: (): unknown => ({}) },
+      get: (name: string): unknown =>
+        withConversation && name === 'conversation'
+          ? { input: { for: (): unknown => input } }
+          : undefined,
+    } as unknown as Context
+  }
+
+  it('splices at the probed caret and restores the caret right after the insert', async () => {
+    const composer = mountComposer('AB', 1, 1)
+    const calls: string[] = []
+    const ctx = fakeCtx(() => 'AB', (next) => { calls.push(next); composer.value = next })
+    expect(appendToDraft(ctx, 's1', 'C')).toBe(true)
+    expect(calls).toEqual(['A C B'])
+    await tick()
+    // 'A C| B' — the caret sits right after the inserted text (the left
+    // separating space shifts it past `start + text.length`).
+    expect(composer.selectionStart).toBe(3)
+    expect(composer.selectionEnd).toBe(3)
+  })
+
+  it('appends and places the caret at the end when the caret is unknown', async () => {
+    const composer = mountComposer('hi', 0, 0)
+    composer.value = 'hi changed' // out of sync → caret unresolved → append
+    const calls: string[] = []
+    const ctx = fakeCtx(() => 'hi', (next) => { calls.push(next); composer.value = next })
+    appendToDraft(ctx, 's1', 'X')
+    expect(calls).toEqual(['hi X'])
+    await tick()
+    expect(composer.selectionStart).toBe(4)
+  })
+
+  it('keeps stacked inserts at the running caret (A|B + C + D → ACD|B)', async () => {
+    const composer = mountComposer('AB', 1, 1)
+    let draft = 'AB'
+    const ctx = fakeCtx(() => draft, (next) => { draft = next; composer.value = next })
+    appendToDraft(ctx, 's1', 'C')
+    await tick()
+    expect(draft).toBe('A C B')
+    expect(composer.selectionStart).toBe(3) // A C| B
+    appendToDraft(ctx, 's1', 'D')
+    await tick()
+    expect(draft).toBe('A C D B')
+    expect(composer.selectionStart).toBe(5) // A C D| B
+  })
+
+  it('returns false and logs when the conversation service is unavailable', () => {
+    const consoleWarn = vi.spyOn(console, 'warn').mockImplementation(() => undefined)
+    const ctx = fakeCtx(() => '', (): void => undefined, false)
+    expect(appendToDraft(ctx, 's1', 'X')).toBe(false)
+    expect(consoleWarn).toHaveBeenCalledTimes(1)
+    consoleWarn.mockRestore()
+  })
+})
\ No newline at end of file
diff --git a/tests/selection-popup.spec.tsx b/tests/selection-popup.spec.tsx
new file mode 100644
index 0000000..c366c2e
--- /dev/null
+++ b/tests/selection-popup.spec.tsx
@@ -0,0 +1,190 @@
+/**
+ * useSelectionPopup spec — the "add to conversation" popup's global dismissal
+ * contract (upstream issue #425 ①). The portaled fixed button must hide on an
+ * outside mousedown, on Escape, when the document goes hidden, when the
+ * window loses focus, and as soon as the editor surface leaves the viewport
+ * (the geometry signal behind tab switches and panel collapse) — yet it must
+ * survive a mousedown ON the button so the click can still commit the
+ * selection.
+ */
+// @vitest-environment jsdom
+import { afterEach, beforeEach, describe, expect, it } from 'vitest'
+import { createElement, useRef } from 'react'
+import { createPortal } from 'react-dom'
+import { createRoot } from 'react-dom/client'
+import { act } from 'react-dom/test-utils'
+import { useSelectionPopup } from '../src/client/selection-popup.ts'
+
+// The act() environment flag (React 18.2 reads it before flushing effects).
+;(globalThis as Record<string, unknown>).IS_REACT_ACT_ENVIRONMENT = true
+
+/** jsdom ships no IntersectionObserver; a controllable stand-in. */
+class FakeIntersectionObserver implements IntersectionObserver {
+  static last: FakeIntersectionObserver | null = null
+  readonly root: Element | Document | null = null
+  readonly rootMargin = '0px'
+  readonly thresholds: readonly number[] = [0]
+  readonly targets = new Set<Element>()
+  constructor(readonly callback: IntersectionObserverCallback) {
+    FakeIntersectionObserver.last = this
+  }
+  observe(target: Element): void { this.targets.add(target) }
+  unobserve(target: Element): void { this.targets.delete(target) }
+  disconnect(): void { this.targets.clear() }
+  takeRecords(): IntersectionObserverEntry[] { return [] }
+  /** Test hook: report that every observed target is (or is not) intersecting. */
+  fire(intersecting: boolean): void {
+    this.callback([{ isIntersecting: intersecting } as IntersectionObserverEntry], this)
+  }
+}
+
+interface HarnessCtl {
+  show(insert: string): void
+  button(): HTMLButtonElement | null
+}
+
+let ctl: HarnessCtl
+
+/** The popup consumer's rendering shape: the hook + a portaled button. */
+function Harness(props: { onCommit: (insert: string) => void }) {
+  const surfaceRef = useRef<HTMLDivElement | null>(null)
+  const surface = useSelectionPopup({
+    onCommit: props.onCommit,
+    getSurface: () => surfaceRef.current,
+  })
+  ctl = {
+    show: (insert: string) => act(() => { surface.show(insert, 100, 100) }),
+    button: () => document.querySelector<HTMLButtonElement>('[data-popup]'),
+  }
+  return createElement('div', null,
+    createElement('div', { ref: surfaceRef, 'data-surface': true }),
+    surface.popup === null ? null : createPortal(
+      createElement('button', {
+        type: 'button',
+        ref: surface.buttonRef,
+        'data-popup': true,
+        onClick: surface.commit,
+      }, surface.popup.insert),
+      document.body,
+    ),
+  )
+}
+
+let container: HTMLDivElement
+let root: ReturnType<typeof createRoot>
+let commitCalls: string[]
+
+function mount(): void {
+  container = document.createElement('div')
+  document.body.append(container)
+  root = createRoot(container)
+  commitCalls = []
+  act(() => {
+    root.render(createElement(Harness, { onCommit: (insert: string) => { commitCalls.push(insert) } }))
+  })
+}
+
+function unmount(): void {
+  act(() => { root.unmount() })
+  container.remove()
+}
+
+const RealIntersectionObserver = globalThis.IntersectionObserver
+
+beforeEach(() => {
+  ;(globalThis as { IntersectionObserver: unknown }).IntersectionObserver = FakeIntersectionObserver
+  FakeIntersectionObserver.last = null
+})
+
+afterEach(() => {
+  ;(globalThis as { IntersectionObserver: unknown }).IntersectionObserver = RealIntersectionObserver
+  document.body.innerHTML = ''
+})
+
+describe('useSelectionPopup', () => {
+  it('shows the popup button with the payload', () => {
+    mount()
+    ctl.show('PAYLOAD')
+    const button = ctl.button()
+    expect(button).not.toBeNull()
+    expect(button?.textContent).toBe('PAYLOAD')
+    unmount()
+  })
+
+  it('commits the payload on click, then hides', () => {
+    mount()
+    ctl.show('PAYLOAD')
+    const button = ctl.button()!
+    act(() => { button.dispatchEvent(new MouseEvent('click', { bubbles: true })) })
+    expect(commitCalls).toEqual(['PAYLOAD'])
+    expect(ctl.button()).toBeNull()
+    unmount()
+  })
+
+  it('hides on a mousedown outside the button', () => {
+    mount()
+    ctl.show('PAYLOAD')
+    const elsewhere = document.createElement('div')
+    document.body.append(elsewhere)
+    act(() => { elsewhere.dispatchEvent(new MouseEvent('mousedown', { bubbles: true })) })
+    expect(ctl.button()).toBeNull()
+    unmount()
+  })
+
+  it('survives a mousedown ON the button so the click can commit', () => {
+    mount()
+    ctl.show('PAYLOAD')
+    const button = ctl.button()!
+    act(() => { button.dispatchEvent(new MouseEvent('mousedown', { bubbles: true })) })
+    expect(ctl.button()).not.toBeNull()
+    unmount()
+  })
+
+  it('hides on Escape', () => {
+    mount()
+    ctl.show('PAYLOAD')
+    act(() => { document.dispatchEvent(new KeyboardEvent('keydown', { key: 'Escape' })) })
+    expect(ctl.button()).toBeNull()
+    unmount()
+  })
+
+  it('hides when the document goes hidden (browser tab switched away)', () => {
+    mount()
+    ctl.show('PAYLOAD')
+    const prototypeDescriptor = Object.getOwnPropertyDescriptor(Document.prototype, 'hidden')
+    Object.defineProperty(document, 'hidden', { value: true, configurable: true })
+    try {
+      act(() => { document.dispatchEvent(new Event('visibilitychange')) })
+      expect(ctl.button()).toBeNull()
+    } finally {
+      if (prototypeDescriptor !== undefined) Object.defineProperty(document, 'hidden', prototypeDescriptor)
+      else delete (document as { hidden?: boolean }).hidden
+    }
+    unmount()
+  })
+
+  it('hides when the window loses focus', () => {
+    mount()
+    ctl.show('PAYLOAD')
+    act(() => { window.dispatchEvent(new Event('blur')) })
+    expect(ctl.button()).toBeNull()
+    unmount()
+  })
+
+  it('watches the editor surface: off-viewport (tab switch / collapse) hides, on-viewport keeps', () => {
+    mount()
+    ctl.show('PAYLOAD')
+    const observer = FakeIntersectionObserver.last
+    expect(observer).not.toBeNull()
+    expect(observer!.targets.size).toBe(1)
+    // The observed target is the hook's surface element.
+    expect([...observer!.targets][0]?.getAttribute('data-surface')).toBe('true')
+    // Surfaced on screen (or display:none removed): the popup stays.
+    act(() => { observer!.fire(true) })
+    expect(ctl.button()).not.toBeNull()
+    // Hidden / translated off-screen: the popup must not survive it.
+    act(() => { observer!.fire(false) })
+    expect(ctl.button()).toBeNull()
+    unmount()
+  })
+})
\ No newline at end of file