diff --git a/apps/mobile/src/features/threads/UsageLimitRecoveryCard.test.tsx b/apps/mobile/src/features/threads/UsageLimitRecoveryCard.test.tsx
index 59210f74273f7..6d13e63e1f560 100644
--- a/apps/mobile/src/features/threads/UsageLimitRecoveryCard.test.tsx
+++ b/apps/mobile/src/features/threads/UsageLimitRecoveryCard.test.tsx
@@ -27,9 +27,10 @@ import { UsageLimitRecoveryCard } from "./UsageLimitRecoveryCard";
 
 const DAY_MS = 24 * 60 * 60 * 1000;
 
-function failedThread(resetAt: string): EnvironmentThreadShell {
+function failedThread(resetAt: string, settled = false): EnvironmentThreadShell {
   return {
     id: "thread-1",
+    settledOverride: settled ? "settled" : null,
     updatedAt: new Date(0).toISOString(),
     snoozedUntil: null,
     latestRun: { runId: "run-1", completedAt: new Date(0).toISOString() },
@@ -39,6 +40,24 @@ function failedThread(resetAt: string): EnvironmentThreadShell {
 }
 
 describe("UsageLimitRecoveryCard", () => {
+  it("offers no recovery on a settled thread and points at Un-settle", () => {
+    using _timers = { [Symbol.dispose]: () => vi.useRealTimers() };
+    vi.useFakeTimers({ now: 0 });
+    const container = document.createElement("div");
+    const root = createRoot(container);
+    using _root = { [Symbol.dispose]: () => act(() => root.unmount()) };
+    act(() =>
+      root.render(
+        <UsageLimitRecoveryCard
+          thread={failedThread(new Date(DAY_MS).toISOString(), true)}
+          environmentId={"env-1" as EnvironmentId}
+        />,
+      ),
+    );
+    expect(container.querySelectorAll("button")).toHaveLength(0);
+    expect(container.textContent).toContain("Un-settle to resume at reset.");
+  });
+
   it("disables Snooze once a reset more than 24.8 days away passes", () => {
     using _timers = { [Symbol.dispose]: () => vi.useRealTimers() };
     vi.useFakeTimers({ now: 0 });
diff --git a/apps/mobile/src/features/threads/UsageLimitRecoveryCard.tsx b/apps/mobile/src/features/threads/UsageLimitRecoveryCard.tsx
index 791dc2ab5d847..c3847e75cdb22 100644
--- a/apps/mobile/src/features/threads/UsageLimitRecoveryCard.tsx
+++ b/apps/mobile/src/features/threads/UsageLimitRecoveryCard.tsx
@@ -22,9 +22,12 @@ export function UsageLimitRecoveryCard({
   const [pending, setPending] = useState(false);
   const [error, setError] = useState<string | null>(null);
   const resetAt = thread.runtime?.usageLimitResetAt ?? null;
-  const canSchedule =
+  const resetsLater =
     resetAt !== null &&
     Date.parse(resetAt) > Date.parse(thread.latestRun?.completedAt ?? thread.updatedAt);
+  // The server refuses recovery for settled threads until they are un-settled.
+  const settled = thread.settledOverride === "settled";
+  const canSchedule = resetsLater && !settled;
   const resetPassed = useDeadlinePassed(resetAt === null ? null : Date.parse(resetAt));
   const runId = thread.latestRun?.runId;
   const recovery = thread.limitRecovery;
@@ -72,7 +75,9 @@ export function UsageLimitRecoveryCard({
     <View className="mx-3 mb-2 gap-2 rounded-xl border border-warning-foreground/25 bg-screen p-3">
       <Text className="text-sm text-warning-foreground">
         {resetAt
-          ? `Usage limit resets ${DateTime.toDateUtc(DateTime.makeUnsafe(resetAt)).toLocaleString()}.`
+          ? `Usage limit resets ${DateTime.toDateUtc(DateTime.makeUnsafe(resetAt)).toLocaleString()}.${
+              resetsLater && settled ? " Un-settle to resume at reset." : ""
+            }`
           : "The provider did not report a reset time. Retry manually when your limit is available."}
       </Text>
       {canSchedule ? (
diff --git a/apps/server/src/orchestration-v2/Orchestrator.ts b/apps/server/src/orchestration-v2/Orchestrator.ts
index a6b876db1de96..8cec1f1469b95 100644
--- a/apps/server/src/orchestration-v2/Orchestrator.ts
+++ b/apps/server/src/orchestration-v2/Orchestrator.ts
@@ -3493,10 +3493,16 @@ const makeOrchestrator = Effect.fn("orchestrationV2.Orchestrator.layer")(functio
           cause: "The reset time has passed. Retry the thread manually.",
         });
       }
+      if (thread.settledOverride === "settled") {
+        return yield* new OrchestratorDispatchError({
+          commandId: command.commandId,
+          commandType: command.type,
+          cause: "The thread is settled. Un-settle it to resume at the reset.",
+        });
+      }
       if (
         !Number.isFinite(resetMs) ||
         thread.archivedAt !== null ||
-        thread.settledOverride === "settled" ||
         run?.id !== command.limitRecovery.runId ||
         failure?.class !== "usage_limit" ||
         failure.resetAt !== command.limitRecovery.resetAt ||
@@ -3597,6 +3603,10 @@ const makeOrchestrator = Effect.fn("orchestrationV2.Orchestrator.layer")(functio
             ...thread,
             settledOverride: "settled",
             settledAt: alreadySettled ? thread.settledAt : (command.settledAt ?? now),
+            // Settled threads refuse recovery, so an armed resume would stay hidden until un-settled.
+            limitRecovery: thread.limitRecovery
+              ? { ...thread.limitRecovery, autoResume: false, snooze: false }
+              : thread.limitRecovery,
             pullRequests: thread.pullRequests?.map((link) => withPullRequestWatch(link, undefined)),
             unsettledAt: null,
             pinnedAt: null,
diff --git a/apps/server/src/orchestration-v2/runtimeLayer.test.ts b/apps/server/src/orchestration-v2/runtimeLayer.test.ts
index 17b103f75b85f..37eb014466f34 100644
--- a/apps/server/src/orchestration-v2/runtimeLayer.test.ts
+++ b/apps/server/src/orchestration-v2/runtimeLayer.test.ts
@@ -8000,6 +8000,7 @@ it.layer(layerTest)("usage-limit recovery", (it) => {
     "replacement",
     "manual-snooze",
     "invalid-snooze",
+    "settled",
     "cancel-resume-keep-snooze",
     "independent-patches",
     "expired-snooze",
@@ -8153,6 +8154,39 @@ it.layer(layerTest)("usage-limit recovery", (it) => {
         assert.isNull(current.thread.snoozedUntil);
         return;
       }
+      if (scenario === "settled") {
+        yield* orchestrator.dispatch({
+          type: "thread.metadata.update",
+          commandId: CommandId.make("recovery:arm-before-settle:settled"),
+          threadId,
+          limitRecovery: { runId: run.id, resetAt, autoResume: true, snooze: true },
+        });
+        yield* orchestrator.dispatch({
+          type: "thread.settle",
+          commandId: CommandId.make("recovery:settle:settled"),
+          threadId,
+        });
+        const error = yield* orchestrator
+          .dispatch({
+            type: "thread.metadata.update",
+            commandId: CommandId.make("recovery:arm:settled"),
+            threadId,
+            limitRecovery: { runId: run.id, resetAt, autoResume: true },
+          })
+          .pipe(Effect.flip);
+        assert(error._tag === "OrchestratorDispatchError");
+        assert.equal(error.cause, "The thread is settled. Un-settle it to resume at the reset.");
+        // Settling disarms the resume armed before it, so nothing is left pending out of sight.
+        assert.deepInclude(
+          (yield* orchestrator.getThreadProjection(threadId)).thread.limitRecovery,
+          {
+            runId: run.id,
+            autoResume: false,
+            snooze: false,
+          },
+        );
+        return;
+      }
       const snooze = scenario === "wake" || scenario === "cancel-resume-keep-snooze";
       const autoResume = scenario !== "wake";
       const arm = limitRecoveryCommand(shell, autoResume, DateTime.toEpochMillis(now), snooze);
diff --git a/apps/web/src/components/ChatView.tsx b/apps/web/src/components/ChatView.tsx
index 192505ea45408..65a06b7a44e63 100644
--- a/apps/web/src/components/ChatView.tsx
+++ b/apps/web/src/components/ChatView.tsx
@@ -2541,6 +2541,7 @@ export default function ChatView(props: ChatViewProps) {
           errorCode: serverRuntime.lastErrorCode ?? null,
           resetAt: serverRuntime.usageLimitResetAt ?? null,
           stoppedAt: activeThreadShell.latestRun.completedAt ?? activeThreadShell.updatedAt,
+          settled: activeThreadShell.settledOverride === "settled",
           recovery: activeThreadShell.limitRecovery ?? null,
           snoozedUntil: activeThreadShell.snoozedUntil,
           timestampFormat,
diff --git a/apps/web/src/components/chat/UsageLimitRecoveryBanner.test.tsx b/apps/web/src/components/chat/UsageLimitRecoveryBanner.test.tsx
index a4b534d66d1eb..820d7ed37afe4 100644
--- a/apps/web/src/components/chat/UsageLimitRecoveryBanner.test.tsx
+++ b/apps/web/src/components/chat/UsageLimitRecoveryBanner.test.tsx
@@ -6,17 +6,22 @@ import { usageLimitRecoveryBannerItem } from "./UsageLimitRecoveryBanner";
 
 const stoppedAt = new Date(2026, 9, 20, 12, 0);
 
-function bannerDescription(resetAt: Date, timestampFormat: TimestampFormat) {
+function banner(resetAt: Date, timestampFormat: TimestampFormat, settled = false) {
   return usageLimitRecoveryBannerItem({
     runId: RunId.make("run-1"),
     errorCode: null,
     resetAt: resetAt.toISOString(),
     stoppedAt: stoppedAt.toISOString(),
+    settled,
     snoozedUntil: null,
     recovery: null,
     timestampFormat,
     onChange: async () => {},
-  }).description;
+  });
+}
+
+function bannerDescription(resetAt: Date, timestampFormat: TimestampFormat) {
+  return banner(resetAt, timestampFormat).description;
 }
 
 describe("usageLimitRecoveryBannerItem", () => {
@@ -28,6 +33,15 @@ describe("usageLimitRecoveryBannerItem", () => {
     expect(bannerDescription(new Date(2026, 9, 20, 17, 30), timestampFormat)).toBe(expected);
   });
 
+  it("points a settled thread at Un-settle instead of offering recovery the server refuses", () => {
+    using _now = vi.spyOn(Date, "now").mockReturnValue(stoppedAt.getTime());
+    const resetAt = new Date(2026, 9, 20, 17, 30);
+    expect(banner(resetAt, "24-hour").actions).not.toBeNull();
+    const settled = banner(resetAt, "24-hour", true);
+    expect(settled.actions).toBeNull();
+    expect(settled.description).toBe("Resets 17:30. Un-settle to resume at reset");
+  });
+
   it("names the day when the reset is tomorrow", () => {
     using _now = vi.spyOn(Date, "now").mockReturnValue(stoppedAt.getTime());
     expect(bannerDescription(new Date(2026, 9, 21, 17, 30), "24-hour")).toBe(
diff --git a/apps/web/src/components/chat/UsageLimitRecoveryBanner.tsx b/apps/web/src/components/chat/UsageLimitRecoveryBanner.tsx
index aabe7734a3329..8600132e370dc 100644
--- a/apps/web/src/components/chat/UsageLimitRecoveryBanner.tsx
+++ b/apps/web/src/components/chat/UsageLimitRecoveryBanner.tsx
@@ -25,6 +25,8 @@ type RecoveryProps = {
   errorCode: string | null;
   resetAt: string | null;
   stoppedAt: string;
+  /** The server refuses recovery for settled threads until they are un-settled. */
+  settled: boolean;
   snoozedUntil: string | null;
   recovery: OrchestrationV2LimitRecovery | null;
   timestampFormat: TimestampFormat;
@@ -32,15 +34,16 @@ type RecoveryProps = {
 };
 
 export function usageLimitRecoveryBannerItem(props: RecoveryProps): ComposerBannerStackItem {
-  const { runId, errorCode, resetAt, stoppedAt, timestampFormat } = props;
-  const canSchedule = resetAt !== null && Date.parse(resetAt) > Date.parse(stoppedAt);
+  const { runId, errorCode, resetAt, stoppedAt, settled, timestampFormat } = props;
+  const resetsLater = resetAt !== null && Date.parse(resetAt) > Date.parse(stoppedAt);
   const workspaceLimit = errorCode === CHATGPT_WORKSPACE_USAGE_LIMIT_CODE;
   const chatGptLimit = workspaceLimit || errorCode === CHATGPT_USAGE_LIMIT_CODE;
-  const recoveryActions = canSchedule ? (
-    <RecoveryActions key={`${runId}:${resetAt}`} {...props} />
-  ) : null;
+  const recoveryActions =
+    resetsLater && !settled ? <RecoveryActions key={`${runId}:${resetAt}`} {...props} /> : null;
   const resetDescription = resetAt
-    ? `Resets ${formatUpcomingTimestamp(resetAt, timestampFormat)}`
+    ? `Resets ${formatUpcomingTimestamp(resetAt, timestampFormat)}${
+        resetsLater && settled ? ". Un-settle to resume at reset" : ""
+      }`
     : "Reset time unavailable; retry manually";
   if (!chatGptLimit) {
     return {