diff --git a/packages/vscode-ide-companion/src/webview/EmbeddedApp.test.tsx b/packages/vscode-ide-companion/src/webview/EmbeddedApp.test.tsx
index f86d9fcdde7..90e3c163c20 100644
--- a/packages/vscode-ide-companion/src/webview/EmbeddedApp.test.tsx
+++ b/packages/vscode-ide-companion/src/webview/EmbeddedApp.test.tsx
@@ -137,6 +137,7 @@ beforeEach(() => {
   mocks.embeddedProps.current = null;
   mocks.connectionError.current = undefined;
   mocks.errorNotifications.current = 0;
+  sdkMocks.listWorkspaceSessionsPage.mockResolvedValue({ sessions: [] });
 });
 
 afterEach(() => {
@@ -552,3 +553,92 @@ describe('EmbeddedApp host wiring', () => {
     }
   });
 });
+
+describe('session switch overlay', () => {
+  async function selectPastSession(): Promise<{
+    container: HTMLElement;
+    historyButton: HTMLButtonElement;
+  }> {
+    sdkMocks.listWorkspaceSessionsPage.mockResolvedValueOnce({
+      sessions: [
+        {
+          sessionId: 'session-2',
+          workspaceCwd: '/workspace',
+          displayName: 'Old conversation',
+          updatedAt: Date.now() - 3 * 24 * 60 * 60 * 1000,
+        },
+      ],
+    });
+    await renderApp();
+    const { container } = mounted[mounted.length - 1];
+    const historyButton = container.querySelector<HTMLButtonElement>(
+      'button[aria-label="Past conversations"]',
+    );
+    expect(historyButton).not.toBeNull();
+    await act(async () => {
+      historyButton!.dispatchEvent(new MouseEvent('click', { bubbles: true }));
+      await Promise.resolve();
+    });
+    const row = container.querySelector<HTMLElement>(
+      '[data-session-id="session-2"]',
+    );
+    expect(row).not.toBeNull();
+    await act(async () => {
+      row!.dispatchEvent(new MouseEvent('click', { bubbles: true }));
+      await Promise.resolve();
+    });
+    return { container, historyButton: historyButton! };
+  }
+
+  it('unlocks the panel when the daemon never confirms a session switch', async () => {
+    // https://github.com/QwenLM/qwen-code/issues/10405 — with the daemon
+    // unreachable the embedded shell can never confirm the switch, so the
+    // "switching session" overlay would lock the panel until a webview
+    // reload. The host must lift the lock on its own so the user can retry.
+    vi.useFakeTimers();
+    try {
+      const { container, historyButton } = await selectPastSession();
+      expect(container.textContent).toContain('Loading conversation…');
+
+      await act(async () => {
+        vi.advanceTimersByTime(60_000);
+        await Promise.resolve();
+      });
+
+      expect(container.textContent).not.toContain('Loading conversation…');
+      expect(historyButton.disabled).toBe(false);
+    } finally {
+      vi.useRealTimers();
+    }
+  });
+
+  it('still clears the overlay at once when the shell confirms the switch', async () => {
+    vi.useFakeTimers();
+    try {
+      const { container } = await selectPastSession();
+      expect(container.textContent).toContain('Loading conversation…');
+
+      await act(async () => {
+        callback<(sessionId: string | undefined) => void>(
+          mocks.embeddedProps.current as CapturedProps,
+          'onSessionIdChange',
+        )('session-2');
+        await Promise.resolve();
+      });
+
+      expect(container.textContent).not.toContain('Loading conversation…');
+
+      // A confirmed switch must also cancel the failure timer, or it would
+      // raise a bogus switch-failed notice after the fact.
+      await act(async () => {
+        vi.advanceTimersByTime(60_000);
+        await Promise.resolve();
+      });
+      expect(container.textContent).not.toContain(
+        'The conversation switch timed out.',
+      );
+    } finally {
+      vi.useRealTimers();
+    }
+  });
+});