diff --git a/packages/scout-agent/lib/compaction.test.ts b/packages/scout-agent/lib/compaction.test.ts
index 57138fe..7f8de37 100644
--- a/packages/scout-agent/lib/compaction.test.ts
+++ b/packages/scout-agent/lib/compaction.test.ts
@@ -400,8 +400,8 @@ describe("applyCompactionToMessages", () => {
     ]);
     const ids2 = result2.map((m) => m.id);
     expect(ids2).toContain("1");
-    expect(ids2).not.toContain("2");
-    expect(ids2).not.toContain("2-assistant");
+    expect(ids2).toContain("2");
+    expect(ids2).toContain("2-assistant");
     expect(ids2).not.toContain("2-assistant2");
     expect(ids2).not.toContain("3");
   });
@@ -443,7 +443,7 @@ describe("applyCompactionToMessages", () => {
   test("replaces old messages with summary and excluded messages when compaction complete", () => {
     const messages: Message[] = [
       userMsg("kept", "Will be summarized"),
-      userMsg("excluded-1", "Will be excluded and restored"),
+      userMsg("kept-1", "Will be excluded and restored"),
       assistantMsg("excluded-1-assistant", "Will be excluded and restored"),
       markerMsg("marker-msg"),
       summaryMsg("summary-msg", "Summary"),
@@ -453,7 +453,7 @@ describe("applyCompactionToMessages", () => {
     const result = applyCompactionToMessages(messages);
     const ids = result.map((m) => m.id);
     expect(ids).not.toContain("kept");
-    expect(ids).toContain("excluded-1");
+    expect(ids).not.toContain("kept-1");
     expect(ids).toContain("excluded-1-assistant");
     expect(ids).not.toContain("marker-msg");
     expect(ids).not.toContain("summary-msg");
@@ -663,7 +663,7 @@ describe("applyCompactionToMessages", () => {
     expect(ids).not.toContain("1");
     expect(ids).not.toContain("2");
     // Messages excluded during compaction request should be restored
-    expect(ids).toContain("3");
+    expect(ids).not.toContain("3");
     expect(ids).toContain("4");
     expect(ids).toContain("interrupted"); // The interrupted user message is preserved
     // Markers and summary message itself should be gone
diff --git a/packages/scout-agent/lib/compaction.ts b/packages/scout-agent/lib/compaction.ts
index 71abcef..704b9e1 100644
--- a/packages/scout-agent/lib/compaction.ts
+++ b/packages/scout-agent/lib/compaction.ts
@@ -54,11 +54,22 @@ export function isOutOfContextError(error: unknown): boolean {
   if (!apiError) {
     return false;
   }
-  return OUT_OF_CONTEXT_PATTERNS.some((pattern) =>
-    pattern.test(
-      apiError.responseBody ?? util.inspect(apiError, { depth: null })
-    )
-  );
+  let textToTest = apiError.responseBody ?? "";
+  // even though typings say message is always a string, empirically it's not always a string
+  if (!textToTest && typeof apiError.message === "string") {
+    textToTest = apiError.message;
+  }
+  if (!textToTest) {
+    try {
+      textToTest = JSON.stringify(apiError);
+    } catch {
+      // note: util.inspect returns different values in Bun and Node.js
+      // in Node.js it includes the error message, in Bun it doesn't
+      // that's why it's the final fallback
+      textToTest = util.inspect(apiError, { depth: null });
+    }
+  }
+  return OUT_OF_CONTEXT_PATTERNS.some((pattern) => pattern.test(textToTest));
 }
 
 /**
@@ -157,6 +168,10 @@ function isCompactionMarkerPart(part: Message["parts"][number]): boolean {
   );
 }
 
+function isCompactionMarkerMessage(message: Message): boolean {
+  return message.parts.some((part) => isCompactionMarkerPart(part));
+}
+
 /**
  * Check if a message part is a compaction summary.
  */
@@ -404,8 +419,9 @@ function findExcludedMessagesStartIndex(
   let lastUserIndex = messages.length;
   let found = 0;
   for (let i = messages.length - 1; i >= 0; i--) {
-    const message = messages[i];
-    if (message?.role !== "user") {
+    // biome-ignore lint/style/noNonNullAssertion: we know the message is not null
+    const message = messages[i]!;
+    if (isCompactionMarkerMessage(message)) {
       continue;
     }
     lastUserIndex = i;
diff --git a/packages/scout-agent/lib/core.test.ts b/packages/scout-agent/lib/core.test.ts
index 65b192c..1250cf3 100644
--- a/packages/scout-agent/lib/core.test.ts
+++ b/packages/scout-agent/lib/core.test.ts
@@ -1091,6 +1091,7 @@ describe("compaction", () => {
     const scout = new Scout({ agent, logger: noopLogger });
     agent.on("chat", async ({ messages }) => {
       const params = await scout.buildStreamTextParams({
+        systemPrompt: "<system>hello</system>",
         chatID,
         messages,
         model,
@@ -1455,7 +1456,7 @@ describe("compaction", () => {
         {
           id: "msg-3",
           role: "user",
-          parts: [{ type: "text", text: "Second message - will be excluded" }],
+          parts: [{ type: "text", text: "Second message to summarize" }],
         },
       ],
     });
@@ -1478,6 +1479,7 @@ describe("compaction", () => {
     // Verify: only 1 marker, so excludeCount=1
     const params = await scout.buildStreamTextParams({
       chatID,
+      systemPrompt: "system",
       messages: helper.messages as Message[],
       model,
     });
@@ -1485,7 +1487,7 @@ describe("compaction", () => {
 
     expect(allContent).toContain("CONVERSATION SUMMARY");
     expect(allContent).toContain("Summary after non-context error");
-    expect(allContent).toContain("Second message - will be excluded"); // restored
+    expect(allContent).not.toContain("Second message to summarize"); // restored
     expect(allContent).not.toContain("First message to summarize"); // summarized
     expect(allContent).not.toContain("First response to summarize"); // summarized
     expect(allContent).toContain("Retry after network error"); // added after
diff --git a/packages/scout-agent/package.json b/packages/scout-agent/package.json
index be7b219..97ce132 100644
--- a/packages/scout-agent/package.json
+++ b/packages/scout-agent/package.json
@@ -1,7 +1,7 @@
 {
   "name": "@blink-sdk/scout-agent",
   "description": "A general-purpose AI agent with GitHub, Slack, web search, and compute capabilities built on Blink SDK.",
-  "version": "0.0.13",
+  "version": "0.0.14",
   "type": "module",
   "keywords": [
     "blink",