diff --git a/Sources/SessionPersistence.swift b/Sources/SessionPersistence.swift
index d4adea20a0ea..2cbe48393548 100644
--- a/Sources/SessionPersistence.swift
+++ b/Sources/SessionPersistence.swift
@@ -1348,6 +1348,7 @@ struct SessionPanelSnapshot: Codable, Sendable {
     var isPinned: Bool
     var isManuallyUnread: Bool
     var hasUnreadIndicator: Bool? = nil
+    var restoredUnreadContributesToWorkspace: Bool? = nil
     var notifications: [SessionNotificationSnapshot]? = nil
     var gitBranch: SessionGitBranchSnapshot?
     var listeningPorts: [Int]
diff --git a/Sources/TabManager.swift b/Sources/TabManager.swift
index f1411a6d9b5a..2c5f7a2c9262 100644
--- a/Sources/TabManager.swift
+++ b/Sources/TabManager.swift
@@ -9017,6 +9017,7 @@ extension TabManager {
                 hasher.combine(panelId)
                 hasher.combine(workspace.manualUnreadPanelIds.contains(panelId))
                 hasher.combine(workspace.restoredUnreadPanelIds.contains(panelId))
+                hasher.combine(workspace.restoredUnreadIndicatorContributesToWorkspace(panelId: panelId))
                 hasher.combine(
                     notificationStore?.hasVisibleNotificationIndicator(
                         forTabId: workspace.id,
diff --git a/Sources/Workspace+DetachedSurfaceTransfer.swift b/Sources/Workspace+DetachedSurfaceTransfer.swift
index e29c6997dc5f..eaa2c2e3406f 100644
--- a/Sources/Workspace+DetachedSurfaceTransfer.swift
+++ b/Sources/Workspace+DetachedSurfaceTransfer.swift
@@ -24,7 +24,7 @@ extension Workspace {
         let cachedTitle: String?
         let customTitle: String?
         let manuallyUnread: Bool
-        let restoredUnread: Bool
+        let restoredUnreadIndicator: RestoredPanelUnreadIndicator?
         let restorableAgent: SessionRestorableAgentSnapshot?
         let restorableAgentResumeState: RestoredAgentResumeState?
         let resumeBinding: SurfaceResumeBindingSnapshot?
@@ -50,7 +50,7 @@ extension Workspace {
                 cachedTitle: cachedTitle,
                 customTitle: customTitle,
                 manuallyUnread: manuallyUnread,
-                restoredUnread: restoredUnread,
+                restoredUnreadIndicator: restoredUnreadIndicator,
                 restorableAgent: restorableAgent,
                 restorableAgentResumeState: restorableAgentResumeState,
                 resumeBinding: resumeBinding,
diff --git a/Sources/Workspace.swift b/Sources/Workspace.swift
index 8b4c3aae493e..38cc5507426e 100644
--- a/Sources/Workspace.swift
+++ b/Sources/Workspace.swift
@@ -452,9 +452,19 @@ extension Workspace {
         let isPinned = pinnedPanelIds.contains(panelId)
         let isManuallyUnread = manualUnreadPanelIds.contains(panelId)
         let panelNotificationSnapshots = notificationSnapshots(surfaceId: panelId)
+        let panelHasUnreadNotification = hasUnreadNotification(panelId: panelId)
         let hasUnreadIndicator =
             restoredUnreadPanelIds.contains(panelId) ||
-            hasUnreadNotification(panelId: panelId)
+            hasVisibleNotificationIndicator(panelId: panelId)
+        let restoredUnreadContributesToWorkspace: Bool? = {
+            if let restoredIndicator = restoredUnreadPanelIndicators[panelId] {
+                return restoredIndicator.contributesToWorkspaceUnread
+            }
+            if hasUnreadIndicator && !panelHasUnreadNotification {
+                return false
+            }
+            return nil
+        }()
         let branchSnapshot = panelGitBranches[panelId].map {
             SessionGitBranchSnapshot(branch: $0.branch, isDirty: $0.isDirty)
         }
@@ -581,6 +591,7 @@ extension Workspace {
             isPinned: isPinned,
             isManuallyUnread: isManuallyUnread,
             hasUnreadIndicator: hasUnreadIndicator,
+            restoredUnreadContributesToWorkspace: restoredUnreadContributesToWorkspace,
             notifications: panelNotificationSnapshots.isEmpty ? nil : panelNotificationSnapshots,
             gitBranch: branchSnapshot,
             listeningPorts: listeningPorts,
@@ -1094,9 +1105,14 @@ extension Workspace {
         } else {
             clearManualUnread(panelId: panelId)
         }
-        if snapshot.hasUnreadIndicator == true,
-           snapshot.notifications?.contains(where: { !$0.isRead }) != true {
-            restorePanelUnreadIndicator(panelId)
+        let hasUnreadPanelNotification = snapshot.notifications?.contains(where: { !$0.isRead }) == true
+        if snapshot.hasUnreadIndicator == true, !hasUnreadPanelNotification {
+            let contributesToWorkspaceUnread = snapshot.restoredUnreadContributesToWorkspace
+                ?? (snapshot.notifications?.isEmpty ?? true)
+            restorePanelUnreadIndicator(
+                panelId,
+                contributesToWorkspaceUnread: contributesToWorkspaceUnread
+            )
         } else {
             clearRestoredUnreadIndicator(panelId: panelId)
         }
@@ -9009,6 +9025,19 @@ final class Workspace: Identifiable, ObservableObject {
         case terminalFirstResponder
     }
 
+    nonisolated enum RestoredPanelUnreadIndicator: Equatable, Sendable {
+        case visualOnly
+        case workspaceUnread
+
+        init(contributesToWorkspaceUnread: Bool) {
+            self = contributesToWorkspaceUnread ? .workspaceUnread : .visualOnly
+        }
+
+        var contributesToWorkspaceUnread: Bool {
+            self == .workspaceUnread
+        }
+    }
+
     /// Published directory for each panel
     @Published var panelDirectories: [UUID: String] = [:]
     @Published var panelTitles: [UUID: String] = [:]
@@ -9020,7 +9049,15 @@ final class Workspace: Identifiable, ObservableObject {
             syncPanelDerivedWorkspaceUnread()
         }
     }
-    @Published private(set) var restoredUnreadPanelIds: Set<UUID> = []
+    @Published private var restoredUnreadPanelIndicators: [UUID: RestoredPanelUnreadIndicator] = [:] {
+        didSet {
+            guard restoredUnreadPanelIndicators != oldValue else { return }
+            syncPanelDerivedWorkspaceUnread()
+        }
+    }
+    var restoredUnreadPanelIds: Set<UUID> {
+        Set(restoredUnreadPanelIndicators.keys)
+    }
     @Published private(set) var tmuxLayoutSnapshot: LayoutSnapshot?
     @Published private(set) var tmuxWorkspaceFlashPanelId: UUID?
     @Published private(set) var tmuxWorkspaceFlashReason: WorkspaceAttentionFlashReason?
@@ -10085,10 +10122,14 @@ final class Workspace: Identifiable, ObservableObject {
         }
     }
 
-    private func hasUnreadNotification(panelId: UUID) -> Bool {
+    private func hasVisibleNotificationIndicator(panelId: UUID) -> Bool {
         AppDelegate.shared?.notificationStore?.hasVisibleNotificationIndicator(forTabId: id, surfaceId: panelId) ?? false
     }
 
+    private func hasUnreadNotification(panelId: UUID) -> Bool {
+        AppDelegate.shared?.notificationStore?.hasUnreadNotification(forTabId: id, surfaceId: panelId) ?? false
+    }
+
     private func attentionPersistentState() -> WorkspaceAttentionPersistentState {
         let notificationStore = AppDelegate.shared?.notificationStore
         let unreadPanelIDs = Set(
@@ -10118,7 +10159,7 @@ final class Workspace: Identifiable, ObservableObject {
         guard let tabId = surfaceIdFromPanelId(panelId) else { return }
         let notificationStore = AppDelegate.shared?.notificationStore
         let shouldShowUnread = Self.shouldShowUnreadIndicator(
-            hasUnreadNotification: hasUnreadNotification(panelId: panelId),
+            hasUnreadNotification: hasVisibleNotificationIndicator(panelId: panelId),
             hasPanelUnreadIndicator: manualUnreadPanelIds.contains(panelId) || restoredUnreadPanelIds.contains(panelId),
             isWorkspaceManuallyUnread: notificationStore?.hasManualUnread(forTabId: id) ?? false,
             isWorkspaceManualUnreadRepresentative: representativePanelIdForWorkspaceManualUnread() == panelId
@@ -10136,7 +10177,11 @@ final class Workspace: Identifiable, ObservableObject {
     }
 
     func syncPanelDerivedWorkspaceUnread() {
-        AppDelegate.shared?.notificationStore?.setPanelDerivedUnread(!manualUnreadPanelIds.isEmpty, forTabId: id)
+        AppDelegate.shared?.notificationStore?.setPanelDerivedUnread(
+            !manualUnreadPanelIds.isEmpty ||
+                restoredUnreadPanelIndicators.values.contains { $0.contributesToWorkspaceUnread },
+            forTabId: id
+        )
     }
 
     private func normalizePinnedTabs(in paneId: PaneID) {
@@ -10302,7 +10347,7 @@ final class Workspace: Identifiable, ObservableObject {
 
     func markPanelUnread(_ panelId: UUID) {
         guard panels[panelId] != nil else { return }
-        let didClearRestored = restoredUnreadPanelIds.remove(panelId) != nil
+        let didClearRestored = restoredUnreadPanelIndicators.removeValue(forKey: panelId) != nil
         let didInsertManual = manualUnreadPanelIds.insert(panelId).inserted
         guard didInsertManual || didClearRestored else { return }
         manualUnreadMarkedAt[panelId] = Date()
@@ -10358,7 +10403,7 @@ final class Workspace: Identifiable, ObservableObject {
             .union(restoredUnreadPanelIds)
         guard !affectedPanelIds.isEmpty else { return false }
         manualUnreadPanelIds.removeAll()
-        restoredUnreadPanelIds.removeAll()
+        restoredUnreadPanelIndicators.removeAll()
         manualUnreadMarkedAt.removeAll()
         for panelId in affectedPanelIds {
             syncUnreadBadgeStateForPanel(panelId)
@@ -10372,9 +10417,16 @@ final class Workspace: Identifiable, ObservableObject {
         return didRemoveUnread
     }
 
-    func restorePanelUnreadIndicator(_ panelId: UUID) {
+    func restorePanelUnreadIndicator(
+        _ panelId: UUID,
+        contributesToWorkspaceUnread: Bool = true
+    ) {
         guard panels[panelId] != nil else { return }
-        guard restoredUnreadPanelIds.insert(panelId).inserted else { return }
+        let nextIndicator = RestoredPanelUnreadIndicator(
+            contributesToWorkspaceUnread: contributesToWorkspaceUnread
+        )
+        guard restoredUnreadPanelIndicators[panelId] != nextIndicator else { return }
+        restoredUnreadPanelIndicators[panelId] = nextIndicator
         syncUnreadBadgeStateForPanel(panelId)
     }
 
@@ -10388,8 +10440,12 @@ final class Workspace: Identifiable, ObservableObject {
         restoredUnreadPanelIds.contains(panelId)
     }
 
+    func restoredUnreadIndicatorContributesToWorkspace(panelId: UUID) -> Bool? {
+        restoredUnreadPanelIndicators[panelId]?.contributesToWorkspaceUnread
+    }
+
     private func clearRestoredUnreadIndicatorState(panelId: UUID) -> Bool {
-        restoredUnreadPanelIds.remove(panelId) != nil
+        restoredUnreadPanelIndicators.removeValue(forKey: panelId) != nil
     }
 
     static func shouldShowUnreadIndicator(
@@ -10874,7 +10930,7 @@ final class Workspace: Identifiable, ObservableObject {
         panelCustomTitles = panelCustomTitles.filter { validSurfaceIds.contains($0.key) }
         pinnedPanelIds = pinnedPanelIds.filter { validSurfaceIds.contains($0) }
         manualUnreadPanelIds = manualUnreadPanelIds.filter { validSurfaceIds.contains($0) }
-        restoredUnreadPanelIds = restoredUnreadPanelIds.filter { validSurfaceIds.contains($0) }
+        restoredUnreadPanelIndicators = restoredUnreadPanelIndicators.filter { validSurfaceIds.contains($0.key) }
         panelGitBranches = panelGitBranches.filter { validSurfaceIds.contains($0.key) }
         manualUnreadMarkedAt = manualUnreadMarkedAt.filter { validSurfaceIds.contains($0.key) }
         surfaceListeningPorts = surfaceListeningPorts.filter { validSurfaceIds.contains($0.key) }
@@ -13583,10 +13639,10 @@ final class Workspace: Identifiable, ObservableObject {
             manualUnreadPanelIds.remove(detached.panelId)
             manualUnreadMarkedAt.removeValue(forKey: detached.panelId)
         }
-        if detached.restoredUnread {
-            restoredUnreadPanelIds.insert(detached.panelId)
+        if let restoredUnreadIndicator = detached.restoredUnreadIndicator {
+            restoredUnreadPanelIndicators[detached.panelId] = restoredUnreadIndicator
         } else {
-            restoredUnreadPanelIds.remove(detached.panelId)
+            restoredUnreadPanelIndicators.removeValue(forKey: detached.panelId)
         }
 
         guard let newTabId = bonsplitController.createTab(
@@ -13610,7 +13666,7 @@ final class Workspace: Identifiable, ObservableObject {
             panelCustomTitles.removeValue(forKey: detached.panelId)
             pinnedPanelIds.remove(detached.panelId)
             manualUnreadPanelIds.remove(detached.panelId)
-            restoredUnreadPanelIds.remove(detached.panelId)
+            restoredUnreadPanelIndicators.removeValue(forKey: detached.panelId)
             manualUnreadMarkedAt.removeValue(forKey: detached.panelId)
             panelSubscriptions.removeValue(forKey: detached.panelId)
 #if DEBUG
@@ -16121,7 +16177,7 @@ extension Workspace: BonsplitDelegate {
                 cachedTitle: cachedTitle,
                 customTitle: panelCustomTitles[panelId],
                 manuallyUnread: manualUnreadPanelIds.contains(panelId),
-                restoredUnread: restoredUnreadPanelIds.contains(panelId),
+                restoredUnreadIndicator: restoredUnreadPanelIndicators[panelId],
                 restorableAgent: restorableAgent,
                 restorableAgentResumeState: restorableAgentResumeState,
                 resumeBinding: resumeBinding,
diff --git a/cmuxTests/WorkspaceManualUnreadTests.swift b/cmuxTests/WorkspaceManualUnreadTests.swift
index 864fd7c9c4ea..3bc5f0096f58 100644
--- a/cmuxTests/WorkspaceManualUnreadTests.swift
+++ b/cmuxTests/WorkspaceManualUnreadTests.swift
@@ -134,6 +134,73 @@ final class WorkspaceManualUnreadTests: XCTestCase {
         XCTAssertEqual(store.unreadCount(forTabId: workspace.id), 0)
     }
 
+    func testRestoredPanelUnreadIndicatorMarksWorkspaceUnreadForSidebar() throws {
+        let appDelegate = AppDelegate.shared ?? AppDelegate()
+        let store = TerminalNotificationStore.shared
+
+        let originalNotificationStore = appDelegate.notificationStore
+
+        store.replaceNotificationsForTesting([])
+        appDelegate.notificationStore = store
+
+        defer {
+            store.replaceNotificationsForTesting([])
+            appDelegate.notificationStore = originalNotificationStore
+        }
+
+        let source = Workspace()
+        let sourcePanelId = try XCTUnwrap(source.focusedPanelId)
+        source.restorePanelUnreadIndicator(sourcePanelId)
+
+        let snapshot = source.sessionSnapshot(includeScrollback: false)
+        let sourcePanelSnapshot = try XCTUnwrap(snapshot.panels.first { $0.id == sourcePanelId })
+        XCTAssertEqual(sourcePanelSnapshot.hasUnreadIndicator, true)
+        XCTAssertNil(sourcePanelSnapshot.notifications)
+
+        let restored = Workspace()
+        restored.restoreSessionSnapshot(snapshot)
+
+        let restoredPanelId = try XCTUnwrap(restored.focusedPanelId)
+        XCTAssertTrue(restored.hasRestoredUnreadIndicator(panelId: restoredPanelId))
+        XCTAssertTrue(store.hasPanelDerivedUnread(forTabId: restored.id))
+        XCTAssertEqual(store.unreadCount(forTabId: restored.id), 1)
+    }
+
+    func testLegacyRestoredPanelUnreadIndicatorMarksWorkspaceUnreadForSidebar() throws {
+        let appDelegate = AppDelegate.shared ?? AppDelegate()
+        let store = TerminalNotificationStore.shared
+
+        let originalNotificationStore = appDelegate.notificationStore
+
+        store.replaceNotificationsForTesting([])
+        appDelegate.notificationStore = store
+
+        defer {
+            store.replaceNotificationsForTesting([])
+            appDelegate.notificationStore = originalNotificationStore
+        }
+
+        let source = Workspace()
+        let sourcePanelId = try XCTUnwrap(source.focusedPanelId)
+        source.restorePanelUnreadIndicator(sourcePanelId)
+
+        var snapshot = source.sessionSnapshot(includeScrollback: false)
+        let sourcePanelIndex = try XCTUnwrap(snapshot.panels.firstIndex { $0.id == sourcePanelId })
+        snapshot.panels[sourcePanelIndex].restoredUnreadContributesToWorkspace = nil
+        XCTAssertEqual(snapshot.panels[sourcePanelIndex].hasUnreadIndicator, true)
+        XCTAssertNil(snapshot.panels[sourcePanelIndex].restoredUnreadContributesToWorkspace)
+        XCTAssertNil(snapshot.panels[sourcePanelIndex].notifications)
+
+        store.replaceNotificationsForTesting([])
+        let restored = Workspace()
+        restored.restoreSessionSnapshot(snapshot)
+
+        let restoredPanelId = try XCTUnwrap(restored.focusedPanelId)
+        XCTAssertTrue(restored.hasRestoredUnreadIndicator(panelId: restoredPanelId))
+        XCTAssertTrue(store.hasPanelDerivedUnread(forTabId: restored.id))
+        XCTAssertEqual(store.unreadCount(forTabId: restored.id), 1)
+    }
+
     func testRestoredUnreadClearsWhenWorkspaceIsExplicitlySelected() throws {
         let appDelegate = AppDelegate.shared ?? AppDelegate()
         let manager = TabManager()
@@ -1241,6 +1308,69 @@ final class WorkspaceManualUnreadTests: XCTestCase {
         XCTAssertEqual(store.unreadCount(forTabId: restored.id), 0)
     }
 
+    func testSessionRestorePreservesFocusedReadIndicatorWithReadNotificationsAsVisualOnly() throws {
+        let appDelegate = AppDelegate.shared ?? AppDelegate()
+        let store = TerminalNotificationStore.shared
+        let originalNotificationStore = appDelegate.notificationStore
+
+        store.replaceNotificationsForTesting([])
+        appDelegate.notificationStore = store
+
+        defer {
+            store.replaceNotificationsForTesting([])
+            appDelegate.notificationStore = originalNotificationStore
+        }
+
+        let workspace = Workspace()
+        let panelId = try XCTUnwrap(workspace.focusedPanelId)
+        store.replaceNotificationsForTesting([
+            TerminalNotification(
+                id: UUID(),
+                tabId: workspace.id,
+                surfaceId: panelId,
+                title: "Read",
+                subtitle: "",
+                body: "",
+                createdAt: Date(timeIntervalSince1970: 1_700_000_000),
+                isRead: true
+            ),
+        ])
+        store.setFocusedReadIndicator(forTabId: workspace.id, surfaceId: panelId)
+
+        let snapshot = workspace.sessionSnapshot(includeScrollback: false)
+        let panelSnapshot = try XCTUnwrap(snapshot.panels.first { $0.id == panelId })
+        XCTAssertEqual(panelSnapshot.hasUnreadIndicator, true)
+        XCTAssertEqual(panelSnapshot.restoredUnreadContributesToWorkspace, false)
+        XCTAssertEqual(panelSnapshot.notifications?.count, 1)
+        XCTAssertEqual(panelSnapshot.notifications?.first?.isRead, true)
+
+        store.replaceNotificationsForTesting([])
+        let restored = Workspace()
+        restored.restoreSessionSnapshot(snapshot)
+
+        let restoredPanelId = try XCTUnwrap(restored.focusedPanelId)
+        let restoredTabId = try XCTUnwrap(restored.surfaceIdFromPanelId(restoredPanelId))
+        XCTAssertTrue(restored.hasRestoredUnreadIndicator(panelId: restoredPanelId))
+        XCTAssertTrue(restored.bonsplitController.tab(restoredTabId)?.showsNotificationBadge ?? false)
+        XCTAssertFalse(store.hasPanelDerivedUnread(forTabId: restored.id))
+        XCTAssertEqual(store.unreadCount(forTabId: restored.id), 0)
+
+        var legacySnapshot = snapshot
+        let legacyPanelIndex = try XCTUnwrap(legacySnapshot.panels.firstIndex { $0.id == panelId })
+        legacySnapshot.panels[legacyPanelIndex].restoredUnreadContributesToWorkspace = nil
+
+        store.replaceNotificationsForTesting([])
+        let legacyRestored = Workspace()
+        legacyRestored.restoreSessionSnapshot(legacySnapshot)
+
+        let legacyRestoredPanelId = try XCTUnwrap(legacyRestored.focusedPanelId)
+        let legacyRestoredTabId = try XCTUnwrap(legacyRestored.surfaceIdFromPanelId(legacyRestoredPanelId))
+        XCTAssertTrue(legacyRestored.hasRestoredUnreadIndicator(panelId: legacyRestoredPanelId))
+        XCTAssertTrue(legacyRestored.bonsplitController.tab(legacyRestoredTabId)?.showsNotificationBadge ?? false)
+        XCTAssertFalse(store.hasPanelDerivedUnread(forTabId: legacyRestored.id))
+        XCTAssertEqual(store.unreadCount(forTabId: legacyRestored.id), 0)
+    }
+
     func testSessionRestorePreservesWorkspaceManualUnreadIndicator() throws {
         let appDelegate = AppDelegate.shared ?? AppDelegate()
         let store = TerminalNotificationStore.shared
@@ -1437,6 +1567,13 @@ final class WorkspaceManualUnreadTests: XCTestCase {
         resetUnreadState()
         workspace.restorePanelUnreadIndicator(panelId)
         XCTAssertNotEqual(cleanFingerprint, manager.sessionAutosaveFingerprint())
+
+        resetUnreadState()
+        workspace.restorePanelUnreadIndicator(panelId, contributesToWorkspaceUnread: false)
+        let visualOnlyRestoredFingerprint = manager.sessionAutosaveFingerprint()
+        XCTAssertNotEqual(cleanFingerprint, visualOnlyRestoredFingerprint)
+        workspace.restorePanelUnreadIndicator(panelId, contributesToWorkspaceUnread: true)
+        XCTAssertNotEqual(visualOnlyRestoredFingerprint, manager.sessionAutosaveFingerprint())
     }
 
     func testShouldShowUnreadIndicatorWhenNotificationIsUnread() {
diff --git a/cmuxTests/WorkspaceUnitTests.swift b/cmuxTests/WorkspaceUnitTests.swift
index 8d1ab009f1d4..0e0f2eb8c1f8 100644
--- a/cmuxTests/WorkspaceUnitTests.swift
+++ b/cmuxTests/WorkspaceUnitTests.swift
@@ -2708,7 +2708,7 @@ final class WorkspaceCreationWorkingDirectoryInheritanceTests: XCTestCase {
             cachedTitle: nil,
             customTitle: nil,
             manuallyUnread: false,
-            restoredUnread: false,
+            restoredUnreadIndicator: nil,
             restorableAgent: nil,
             restorableAgentResumeState: nil,
             resumeBinding: resumeBinding,