diff --git a/Sources/CodeIsland/AppState.swift b/Sources/CodeIsland/AppState.swift
index 2dbb0a4..4a396ce 100644
--- a/Sources/CodeIsland/AppState.swift
+++ b/Sources/CodeIsland/AppState.swift
@@ -38,6 +38,8 @@ final class AppState {
     private var completionQueue: [String] = []
     /// Mouse must enter the panel before auto-collapse is allowed (prevents instant dismiss)
     var completionHasBeenEntered = false
+    /// Auto-collapse timer fired but mouse is inside panel — defer collapse until mouse leaves
+    var deferCollapseOnMouseLeave = false
     private var processMonitors: [String: (source: DispatchSourceProcess, process: ProcessIdentity)] = [:]
     private var exitingSessions: [String: ProcessIdentity] = [:]
     private var saveTimer: Timer?
@@ -621,6 +623,7 @@ final class AppState {
         activeSessionId = sessionId
         surface = .completionCard(sessionId: sessionId)
         completionHasBeenEntered = false
+        deferCollapseOnMouseLeave = false
 
         autoCollapseTask?.cancel()
         autoCollapseTask = Task { @MainActor in
@@ -633,9 +636,15 @@ final class AppState {
     func cancelCompletionQueue() {
         autoCollapseTask?.cancel()
         completionQueue.removeAll()
+        deferCollapseOnMouseLeave = false
     }
 
     private func showNextCompletionOrCollapse() {
+        // Once the mouse has entered the completion card, defer collapse until it leaves
+        if completionHasBeenEntered {
+            deferCollapseOnMouseLeave = true
+            return
+        }
         // showNextPending handles: interactive items first, then completionQueue, then collapse
         if showNextPending() { return }
         withAnimation(NotchAnimation.close) {
diff --git a/Sources/CodeIsland/NotchPanelView.swift b/Sources/CodeIsland/NotchPanelView.swift
index 91ab9ba..8020f1f 100644
--- a/Sources/CodeIsland/NotchPanelView.swift
+++ b/Sources/CodeIsland/NotchPanelView.swift
@@ -219,13 +219,14 @@ struct NotchPanelView: View {
                     // Completion card: mark entered on hover-in, block collapse until entered
                     if hovering {
                         appState.completionHasBeenEntered = true
-                    } else if appState.completionHasBeenEntered {
-                        // Mouse entered then left — allow collapse
+                    } else if appState.completionHasBeenEntered || appState.deferCollapseOnMouseLeave {
+                        // Mouse entered then left — allow collapse (immediate or deferred)
                         hoverTimer?.invalidate()
                         hoverTimer = nil
+                        appState.deferCollapseOnMouseLeave = false
+                        appState.cancelCompletionQueue()
                         withAnimation(NotchAnimation.close) {
                             appState.surface = .collapsed
-                            appState.cancelCompletionQueue()
                         }
                     }
                     return