diff --git a/apps/server/src/provider/ProviderInstanceRegistry.test.ts b/apps/server/src/provider/ProviderInstanceRegistry.test.ts
index de8fc1deae452..a9408c099814e 100644
--- a/apps/server/src/provider/ProviderInstanceRegistry.test.ts
+++ b/apps/server/src/provider/ProviderInstanceRegistry.test.ts
@@ -18,7 +18,9 @@ import * as ProviderLatestVersions from "@t3tools/provider-core/server/ProviderL
 import * as McpProviderSessions from "@t3tools/provider-core/server/McpProviderSessions";
 import * as HostProcess from "@t3tools/shared/HostProcess";
 import * as DateTime from "effect/DateTime";
+import * as Deferred from "effect/Deferred";
 import * as Effect from "effect/Effect";
+import * as Fiber from "effect/Fiber";
 import * as FileSystem from "effect/FileSystem";
 import * as Layer from "effect/Layer";
 import * as Path from "effect/Path";
@@ -192,6 +194,61 @@ describe("ProviderInstanceRegistry — multi-instance codex slice", () => {
     Layer.provideMerge(layerBase),
   );
 
+  it.effect.each(["replacement", "removal"] as const)(
+    "hides retired instances during reconcile (%s)",
+    (scenario) =>
+      Effect.gen(function* () {
+        let closed = 0;
+        const replacementStarted = yield* Deferred.make<void>();
+        const releaseReplacement = yield* Deferred.make<void>();
+        const driver: typeof CodexDriver = {
+          ...CodexDriver,
+          create: (input) =>
+            Effect.gen(function* () {
+              if (input.displayName === "Second") {
+                yield* Deferred.succeed(replacementStarted, undefined);
+                yield* Deferred.await(releaseReplacement);
+              }
+              const instance = yield* CodexDriver.create(input);
+              yield* Effect.addFinalizer(() => Effect.sync(() => closed++));
+              return instance;
+            }),
+        };
+        const retiredId = ProviderInstanceId.make("retired");
+        const siblingId = ProviderInstanceId.make("sibling");
+        const nextId = scenario === "replacement" ? retiredId : ProviderInstanceId.make("new");
+        const entry = {
+          driver: CodexDriver.driverKind,
+          enabled: false,
+          config: makeCodexConfig({}),
+        };
+        const { registry, mutator } = yield* makeProviderInstanceRegistry({
+          drivers: [driver],
+          configMap: { [retiredId]: entry, [siblingId]: entry },
+        });
+        const sibling = yield* registry.getInstance(siblingId);
+        const reconcile = yield* mutator
+          .reconcile({
+            [siblingId]: entry,
+            [nextId]: {
+              ...entry,
+              displayName: "Second",
+              config: makeCodexConfig({ customModels: ["replacement-model"] }),
+            },
+          })
+          .pipe(Effect.forkChild({ startImmediately: true }));
+        yield* Deferred.await(replacementStarted);
+        expect(closed).toBe(1);
+        expect(yield* registry.getInstance(retiredId)).toBeUndefined();
+        expect(yield* registry.listInstances).toEqual([sibling]);
+        yield* Deferred.succeed(releaseReplacement, undefined);
+        yield* Fiber.join(reconcile);
+        expect((yield* registry.getInstance(nextId))?.displayName).toBe("Second");
+        expect(yield* registry.getInstance(siblingId)).toBe(sibling);
+        expect(closed).toBe(1);
+      }).pipe(Effect.provide(layerTest)),
+  );
+
   it.live("treats an explicit in-config enabled:false as disabling despite the envelope", () =>
     Effect.gen(function* () {
       const staleId = ProviderInstanceId.make("codex_stale");
diff --git a/apps/server/src/provider/ProviderInstanceRegistry.ts b/apps/server/src/provider/ProviderInstanceRegistry.ts
index 3bbbe2900b9f2..02d769f5cfd45 100644
--- a/apps/server/src/provider/ProviderInstanceRegistry.ts
+++ b/apps/server/src/provider/ProviderInstanceRegistry.ts
@@ -179,7 +179,13 @@ const makeReconcile = <R>(input: {
           replacedIds.add(instanceId);
         }
       }
-      for (const id of [...removedIds, ...replacedIds]) {
+      const retiredIds = [...removedIds, ...replacedIds];
+      if (retiredIds.length > 0) {
+        const remaining = new Map(previousEntries);
+        for (const id of retiredIds) remaining.delete(id);
+        yield* Ref.set(state.entries, remaining);
+      }
+      for (const id of retiredIds) {
         const live = previousEntries.get(id);
         if (live) {
           yield* Scope.close(live.scope, Exit.void).pipe(Effect.ignore);