diff --git a/packages/coding-agent/docs/tui.md b/packages/coding-agent/docs/tui.md
index 59f7c11dd..12666af4f 100644
--- a/packages/coding-agent/docs/tui.md
+++ b/packages/coding-agent/docs/tui.md
@@ -741,11 +741,16 @@ Customize the inline working indicator shown while pi is streaming a response.
 
 ```typescript
 // Static indicator
-ctx.ui.setWorkingIndicator({ frames: ["●"] });
+ctx.ui.setWorkingIndicator({ frames: [ctx.ui.theme.fg("accent", "●")] });
 
 // Custom animated indicator
 ctx.ui.setWorkingIndicator({
-  frames: ["·", "•", "●", "•"],
+  frames: [
+    ctx.ui.theme.fg("dim", "·"),
+    ctx.ui.theme.fg("muted", "•"),
+    ctx.ui.theme.fg("accent", "●"),
+    ctx.ui.theme.fg("muted", "•"),
+  ],
   intervalMs: 120,
 });
 
@@ -756,7 +761,7 @@ ctx.ui.setWorkingIndicator({ frames: [] });
 ctx.ui.setWorkingIndicator();
 ```
 
-This only affects the normal streaming working indicator. Compaction and retry loaders keep their built-in styling.
+This only affects the normal streaming working indicator. Compaction and retry loaders keep their built-in styling. Custom frames are rendered verbatim, so extensions must add their own colors when needed.
 
 **Examples:** [working-indicator.ts](../examples/extensions/working-indicator.ts)
 
diff --git a/packages/coding-agent/examples/extensions/working-indicator.ts b/packages/coding-agent/examples/extensions/working-indicator.ts
index e7fd29c86..53ce1a735 100644
--- a/packages/coding-agent/examples/extensions/working-indicator.ts
+++ b/packages/coding-agent/examples/extensions/working-indicator.ts
@@ -20,31 +20,49 @@ import type { ExtensionAPI, ExtensionContext, WorkingIndicatorOptions } from "@m
 
 type WorkingIndicatorMode = "dot" | "none" | "pulse" | "spinner" | "default";
 
-const SPINNER_INDICATOR: WorkingIndicatorOptions = {
-	frames: ["⠋", "⠙", "⠹", "⠸", "⠼", "⠴", "⠦", "⠧", "⠇", "⠏"],
-	intervalMs: 80,
-};
-const DOT_INDICATOR: WorkingIndicatorOptions = {
-	frames: ["●"],
-};
-const PULSE_INDICATOR: WorkingIndicatorOptions = {
-	frames: ["·", "•", "●", "•"],
-	intervalMs: 120,
-};
+const SPINNER_FRAMES = ["⠋", "⠙", "⠹", "⠸", "⠼", "⠴", "⠦", "⠧", "⠇", "⠏"];
+const PASTEL_RAINBOW = [
+	"\x1b[38;2;255;179;186m",
+	"\x1b[38;2;255;223;186m",
+	"\x1b[38;2;255;255;186m",
+	"\x1b[38;2;186;255;201m",
+	"\x1b[38;2;186;225;255m",
+	"\x1b[38;2;218;186;255m",
+];
+const RESET_FG = "\x1b[39m";
 const HIDDEN_INDICATOR: WorkingIndicatorOptions = {
 	frames: [],
 };
 
+function colorize(text: string, color: string): string {
+	return `${color}${text}${RESET_FG}`;
+}
+
 function getIndicator(mode: WorkingIndicatorMode): WorkingIndicatorOptions | undefined {
 	switch (mode) {
 		case "dot":
-			return DOT_INDICATOR;
+			return {
+				frames: [colorize("●", PASTEL_RAINBOW[0])],
+			};
 		case "none":
 			return HIDDEN_INDICATOR;
 		case "pulse":
-			return PULSE_INDICATOR;
+			return {
+				frames: [
+					colorize("·", PASTEL_RAINBOW[0]),
+					colorize("•", PASTEL_RAINBOW[2]),
+					colorize("●", PASTEL_RAINBOW[4]),
+					colorize("•", PASTEL_RAINBOW[5]),
+				],
+				intervalMs: 120,
+			};
 		case "spinner":
-			return SPINNER_INDICATOR;
+			return {
+				frames: SPINNER_FRAMES.map((frame, index) =>
+					colorize(frame, PASTEL_RAINBOW[index % PASTEL_RAINBOW.length]!),
+				),
+				intervalMs: 80,
+			};
 		case "default":
 			return undefined;
 	}
@@ -66,7 +84,7 @@ function describeMode(mode: WorkingIndicatorMode): string {
 }
 
 export default function (pi: ExtensionAPI) {
-	let mode: WorkingIndicatorMode = "dot";
+	let mode: WorkingIndicatorMode = "spinner";
 
 	const applyIndicator = (ctx: ExtensionContext) => {
 		ctx.ui.setWorkingIndicator(getIndicator(mode));
diff --git a/packages/coding-agent/examples/sdk/03-custom-prompt.ts b/packages/coding-agent/examples/sdk/03-custom-prompt.ts
index 7a4444d7d..eab00d842 100644
--- a/packages/coding-agent/examples/sdk/03-custom-prompt.ts
+++ b/packages/coding-agent/examples/sdk/03-custom-prompt.ts
@@ -4,10 +4,15 @@
  * Shows how to replace or modify the default system prompt.
  */
 
-import { createAgentSession, DefaultResourceLoader, SessionManager } from "@mariozechner/pi-coding-agent";
+import { createAgentSession, DefaultResourceLoader, getAgentDir, SessionManager } from "@mariozechner/pi-coding-agent";
+
+const cwd = process.cwd();
+const agentDir = getAgentDir();
 
 // Option 1: Replace prompt entirely
 const loader1 = new DefaultResourceLoader({
+	cwd,
+	agentDir,
 	systemPromptOverride: () => `You are a helpful assistant that speaks like a pirate.
 Always end responses with "Arrr!"`,
 	// Needed to avoid DefaultResourceLoader appending APPEND_SYSTEM.md from ~/.pi/agent or <cwd>/.pi.
@@ -32,6 +37,8 @@ console.log("\n");
 
 // Option 2: Append instructions to the default prompt
 const loader2 = new DefaultResourceLoader({
+	cwd,
+	agentDir,
 	appendSystemPromptOverride: (base) => [
 		...base,
 		"## Additional Instructions\n- Always be concise\n- Use bullet points when listing things",
diff --git a/packages/coding-agent/examples/sdk/04-skills.ts b/packages/coding-agent/examples/sdk/04-skills.ts
index 9ed9696b1..852c2c199 100644
--- a/packages/coding-agent/examples/sdk/04-skills.ts
+++ b/packages/coding-agent/examples/sdk/04-skills.ts
@@ -9,6 +9,7 @@ import {
 	createAgentSession,
 	createSyntheticSourceInfo,
 	DefaultResourceLoader,
+	getAgentDir,
 	SessionManager,
 	type Skill,
 } from "@mariozechner/pi-coding-agent";
@@ -24,6 +25,8 @@ const customSkill: Skill = {
 };
 
 const loader = new DefaultResourceLoader({
+	cwd: process.cwd(),
+	agentDir: getAgentDir(),
 	skillsOverride: (current) => {
 		const filteredSkills = current.skills.filter((s) => s.name.includes("browser") || s.name.includes("search"));
 		return {
diff --git a/packages/coding-agent/examples/sdk/06-extensions.ts b/packages/coding-agent/examples/sdk/06-extensions.ts
index 2d03d387d..ddc0ee385 100644
--- a/packages/coding-agent/examples/sdk/06-extensions.ts
+++ b/packages/coding-agent/examples/sdk/06-extensions.ts
@@ -13,12 +13,14 @@
  *   export default function (pi: ExtensionAPI) { ... }
  */
 
-import { createAgentSession, DefaultResourceLoader, SessionManager } from "@mariozechner/pi-coding-agent";
+import { createAgentSession, DefaultResourceLoader, getAgentDir, SessionManager } from "@mariozechner/pi-coding-agent";
 
 // Extensions are discovered automatically from standard locations.
 // You can also add paths via settings.json or DefaultResourceLoader options.
 
 const resourceLoader = new DefaultResourceLoader({
+	cwd: process.cwd(),
+	agentDir: getAgentDir(),
 	additionalExtensionPaths: ["./my-logging-extension.ts", "./my-safety-extension.ts"],
 	extensionFactories: [
 		(pi) => {
diff --git a/packages/coding-agent/examples/sdk/07-context-files.ts b/packages/coding-agent/examples/sdk/07-context-files.ts
index a0240659c..d49e32ecd 100644
--- a/packages/coding-agent/examples/sdk/07-context-files.ts
+++ b/packages/coding-agent/examples/sdk/07-context-files.ts
@@ -4,10 +4,12 @@
  * Context files provide project-specific instructions loaded into the system prompt.
  */
 
-import { createAgentSession, DefaultResourceLoader, SessionManager } from "@mariozechner/pi-coding-agent";
+import { createAgentSession, DefaultResourceLoader, getAgentDir, SessionManager } from "@mariozechner/pi-coding-agent";
 
 // Disable context files entirely by returning an empty list in agentsFilesOverride.
 const loader = new DefaultResourceLoader({
+	cwd: process.cwd(),
+	agentDir: getAgentDir(),
 	agentsFilesOverride: (current) => ({
 		agentsFiles: [
 			...current.agentsFiles,
diff --git a/packages/coding-agent/examples/sdk/08-prompt-templates.ts b/packages/coding-agent/examples/sdk/08-prompt-templates.ts
index b47aebb7a..6aec91039 100644
--- a/packages/coding-agent/examples/sdk/08-prompt-templates.ts
+++ b/packages/coding-agent/examples/sdk/08-prompt-templates.ts
@@ -8,6 +8,7 @@ import {
 	createAgentSession,
 	createSyntheticSourceInfo,
 	DefaultResourceLoader,
+	getAgentDir,
 	type PromptTemplate,
 	SessionManager,
 } from "@mariozechner/pi-coding-agent";
@@ -26,6 +27,8 @@ const deployTemplate: PromptTemplate = {
 };
 
 const loader = new DefaultResourceLoader({
+	cwd: process.cwd(),
+	agentDir: getAgentDir(),
 	promptsOverride: (current) => ({
 		prompts: [...current.prompts, deployTemplate],
 		diagnostics: current.diagnostics,
diff --git a/packages/coding-agent/examples/sdk/10-settings.ts b/packages/coding-agent/examples/sdk/10-settings.ts
index b2abf7e4f..bbfdea9d1 100644
--- a/packages/coding-agent/examples/sdk/10-settings.ts
+++ b/packages/coding-agent/examples/sdk/10-settings.ts
@@ -6,12 +6,14 @@
 
 import { createAgentSession, SessionManager, SettingsManager } from "@mariozechner/pi-coding-agent";
 
+const cwd = process.cwd();
+
 // Load current settings (merged global + project)
-const settingsManagerFromDisk = SettingsManager.create();
+const settingsManagerFromDisk = SettingsManager.create(cwd);
 console.log("Current settings:", JSON.stringify(settingsManagerFromDisk.getGlobalSettings(), null, 2));
 
 // Override specific settings
-const settingsManager = SettingsManager.create();
+const settingsManager = SettingsManager.create(cwd);
 settingsManager.applyOverrides({
 	compaction: { enabled: false },
 	retry: { enabled: true, maxRetries: 5, baseDelayMs: 1000 },
diff --git a/packages/coding-agent/src/core/agent-session-runtime.ts b/packages/coding-agent/src/core/agent-session-runtime.ts
index 72691ffea..5f3e8d83c 100644
--- a/packages/coding-agent/src/core/agent-session-runtime.ts
+++ b/packages/coding-agent/src/core/agent-session-runtime.ts
@@ -133,9 +133,6 @@ export class AgentSessionRuntime {
 	}
 
 	private apply(result: CreateAgentSessionRuntimeResult): void {
-		if (process.cwd() !== result.services.cwd) {
-			process.chdir(result.services.cwd);
-		}
 		this._session = result.session;
 		this._services = result.services;
 		this._diagnostics = result.diagnostics;
@@ -346,9 +343,6 @@ export async function createAgentSessionRuntime(
 ): Promise<AgentSessionRuntime> {
 	assertSessionCwdExists(options.sessionManager, options.cwd);
 	const result = await createRuntime(options);
-	if (process.cwd() !== result.services.cwd) {
-		process.chdir(result.services.cwd);
-	}
 	return new AgentSessionRuntime(
 		result.session,
 		result.services,
diff --git a/packages/coding-agent/src/core/bash-executor.ts b/packages/coding-agent/src/core/bash-executor.ts
index 2077b5ec9..3c185e21d 100644
--- a/packages/coding-agent/src/core/bash-executor.ts
+++ b/packages/coding-agent/src/core/bash-executor.ts
@@ -12,7 +12,7 @@ import { tmpdir } from "node:os";
 import { join } from "node:path";
 import stripAnsi from "strip-ansi";
 import { sanitizeBinaryOutput } from "../utils/shell.js";
-import { type BashOperations, createLocalBashOperations } from "./tools/bash.js";
+import type { BashOperations } from "./tools/bash.js";
 import { DEFAULT_MAX_BYTES, truncateTail } from "./tools/truncate.js";
 
 // ============================================================================
@@ -43,23 +43,6 @@ export interface BashResult {
 // Implementation
 // ============================================================================
 
-/**
- * Execute a bash command with optional streaming and cancellation support.
- *
- * Uses the same local BashOperations backend as createBashTool() so interactive
- * user bash and tool-invoked bash share the same process spawning behavior.
- * Sanitization, newline normalization, temp-file capture, and truncation still
- * happen in executeBashWithOperations(), so reusing the local backend does not
- * change output processing behavior.
- *
- * @param command - The bash command to execute
- * @param options - Optional streaming callback and abort signal
- * @returns Promise resolving to execution result
- */
-export function executeBash(command: string, options?: BashExecutorOptions): Promise<BashResult> {
-	return executeBashWithOperations(command, process.cwd(), createLocalBashOperations(), options);
-}
-
 /**
  * Execute a bash command using custom BashOperations.
  * Used for remote execution (SSH, containers, etc.).
diff --git a/packages/coding-agent/src/core/extensions/types.ts b/packages/coding-agent/src/core/extensions/types.ts
index 87c24e240..f7852fa43 100644
--- a/packages/coding-agent/src/core/extensions/types.ts
+++ b/packages/coding-agent/src/core/extensions/types.ts
@@ -104,7 +104,7 @@ export type TerminalInputHandler = (data: string) => { consume?: boolean; data?:
 
 /** Working indicator configuration for the interactive streaming loader. */
 export interface WorkingIndicatorOptions {
-	/** Animation frames. Use an empty array to hide the indicator entirely. */
+	/** Animation frames. Use an empty array to hide the indicator entirely. Custom frames are rendered verbatim. */
 	frames?: string[];
 	/** Frame interval in milliseconds for animated indicators. */
 	intervalMs?: number;
@@ -142,6 +142,7 @@ export interface ExtensionUIContext {
 	 * - Omit the argument to restore the default animated spinner.
 	 * - Use `frames: ["●"]` for a static indicator.
 	 * - Use `frames: []` to hide the indicator entirely.
+	 * - Custom frames are rendered as provided, so extensions must add their own colors.
 	 */
 	setWorkingIndicator(options?: WorkingIndicatorOptions): void;
 
diff --git a/packages/coding-agent/src/core/footer-data-provider.ts b/packages/coding-agent/src/core/footer-data-provider.ts
index c76520fed..120caa0b0 100644
--- a/packages/coding-agent/src/core/footer-data-provider.ts
+++ b/packages/coding-agent/src/core/footer-data-provider.ts
@@ -101,7 +101,7 @@ export class FooterDataProvider {
 	private refreshPending = false;
 	private disposed = false;
 
-	constructor(cwd: string = process.cwd()) {
+	constructor(cwd: string) {
 		this.cwd = cwd;
 		this.gitPaths = findGitPaths(cwd);
 		this.setupGitWatcher();
diff --git a/packages/coding-agent/src/core/index.ts b/packages/coding-agent/src/core/index.ts
index 3fa96f95a..d4faf8e2c 100644
--- a/packages/coding-agent/src/core/index.ts
+++ b/packages/coding-agent/src/core/index.ts
@@ -25,7 +25,7 @@ export {
 	createAgentSessionFromServices,
 	createAgentSessionServices,
 } from "./agent-session-services.js";
-export { type BashExecutorOptions, type BashResult, executeBash, executeBashWithOperations } from "./bash-executor.js";
+export { type BashExecutorOptions, type BashResult, executeBashWithOperations } from "./bash-executor.js";
 export type { CompactionResult } from "./compaction/index.js";
 export { createEventBus, type EventBus, type EventBusController } from "./event-bus.js";
 // Extensions system
diff --git a/packages/coding-agent/src/core/prompt-templates.ts b/packages/coding-agent/src/core/prompt-templates.ts
index 4850351fc..8527f9111 100644
--- a/packages/coding-agent/src/core/prompt-templates.ts
+++ b/packages/coding-agent/src/core/prompt-templates.ts
@@ -1,7 +1,7 @@
 import { existsSync, readdirSync, readFileSync, statSync } from "fs";
 import { homedir } from "os";
 import { basename, dirname, isAbsolute, join, resolve, sep } from "path";
-import { CONFIG_DIR_NAME, getPromptsDir } from "../config.js";
+import { CONFIG_DIR_NAME } from "../config.js";
 import { parseFrontmatter } from "../utils/frontmatter.js";
 import { createSyntheticSourceInfo, type SourceInfo } from "./source-info.js";
 
@@ -175,14 +175,14 @@ function loadTemplatesFromDir(dir: string, getSourceInfo: (filePath: string) =>
 }
 
 export interface LoadPromptTemplatesOptions {
-	/** Working directory for project-local templates. Default: process.cwd() */
-	cwd?: string;
-	/** Agent config directory for global templates. Default: from getPromptsDir() */
-	agentDir?: string;
-	/** Explicit prompt template paths (files or directories) */
-	promptPaths?: string[];
-	/** Include default prompt directories. Default: true */
-	includeDefaults?: boolean;
+	/** Working directory for project-local templates. */
+	cwd: string;
+	/** Agent config directory for global templates. */
+	agentDir: string;
+	/** Explicit prompt template paths (files or directories). */
+	promptPaths: string[];
+	/** Include default prompt directories. */
+	includeDefaults: boolean;
 }
 
 function normalizePath(input: string): string {
@@ -204,11 +204,11 @@ function resolvePromptPath(p: string, cwd: string): string {
  * 2. Project: cwd/{CONFIG_DIR_NAME}/prompts/
  * 3. Explicit prompt paths
  */
-export function loadPromptTemplates(options: LoadPromptTemplatesOptions = {}): PromptTemplate[] {
-	const resolvedCwd = options.cwd ?? process.cwd();
-	const resolvedAgentDir = options.agentDir ?? getPromptsDir();
-	const promptPaths = options.promptPaths ?? [];
-	const includeDefaults = options.includeDefaults ?? true;
+export function loadPromptTemplates(options: LoadPromptTemplatesOptions): PromptTemplate[] {
+	const resolvedCwd = options.cwd;
+	const resolvedAgentDir = options.agentDir;
+	const promptPaths = options.promptPaths;
+	const includeDefaults = options.includeDefaults;
 
 	const templates: PromptTemplate[] = [];
 
diff --git a/packages/coding-agent/src/core/resource-loader.ts b/packages/coding-agent/src/core/resource-loader.ts
index c1c49b235..9f07787e2 100644
--- a/packages/coding-agent/src/core/resource-loader.ts
+++ b/packages/coding-agent/src/core/resource-loader.ts
@@ -2,7 +2,7 @@ import { existsSync, readdirSync, readFileSync, statSync } from "node:fs";
 import { homedir } from "node:os";
 import { join, resolve, sep } from "node:path";
 import chalk from "chalk";
-import { CONFIG_DIR_NAME, getAgentDir } from "../config.js";
+import { CONFIG_DIR_NAME } from "../config.js";
 import { loadThemeFromPath, type Theme } from "../modes/interactive/theme/theme.js";
 import type { ResourceDiagnostic } from "./diagnostics.js";
 
@@ -73,11 +73,12 @@ function loadContextFileFromDir(dir: string): { path: string; content: string }
 	return null;
 }
 
-export function loadProjectContextFiles(
-	options: { cwd?: string; agentDir?: string } = {},
-): Array<{ path: string; content: string }> {
-	const resolvedCwd = options.cwd ?? process.cwd();
-	const resolvedAgentDir = options.agentDir ?? getAgentDir();
+export function loadProjectContextFiles(options: {
+	cwd: string;
+	agentDir: string;
+}): Array<{ path: string; content: string }> {
+	const resolvedCwd = options.cwd;
+	const resolvedAgentDir = options.agentDir;
 
 	const contextFiles: Array<{ path: string; content: string }> = [];
 	const seenPaths = new Set<string>();
@@ -113,8 +114,8 @@ export function loadProjectContextFiles(
 }
 
 export interface DefaultResourceLoaderOptions {
-	cwd?: string;
-	agentDir?: string;
+	cwd: string;
+	agentDir: string;
 	settingsManager?: SettingsManager;
 	eventBus?: EventBus;
 	additionalExtensionPaths?: string[];
@@ -204,8 +205,8 @@ export class DefaultResourceLoader implements ResourceLoader {
 	private lastThemePaths: string[];
 
 	constructor(options: DefaultResourceLoaderOptions) {
-		this.cwd = options.cwd ?? process.cwd();
-		this.agentDir = options.agentDir ?? getAgentDir();
+		this.cwd = options.cwd;
+		this.agentDir = options.agentDir;
 		this.settingsManager = options.settingsManager ?? SettingsManager.create(this.cwd, this.agentDir);
 		this.eventBus = options.eventBus ?? createEventBus();
 		this.packageManager = new DefaultPackageManager({
diff --git a/packages/coding-agent/src/core/settings-manager.ts b/packages/coding-agent/src/core/settings-manager.ts
index d1f3493f2..8700029ad 100644
--- a/packages/coding-agent/src/core/settings-manager.ts
+++ b/packages/coding-agent/src/core/settings-manager.ts
@@ -144,7 +144,7 @@ export class FileSettingsStorage implements SettingsStorage {
 	private globalSettingsPath: string;
 	private projectSettingsPath: string;
 
-	constructor(cwd: string = process.cwd(), agentDir: string = getAgentDir()) {
+	constructor(cwd: string, agentDir: string) {
 		this.globalSettingsPath = join(agentDir, "settings.json");
 		this.projectSettingsPath = join(cwd, CONFIG_DIR_NAME, "settings.json");
 	}
@@ -256,7 +256,7 @@ export class SettingsManager {
 	}
 
 	/** Create a SettingsManager that loads from files */
-	static create(cwd: string = process.cwd(), agentDir: string = getAgentDir()): SettingsManager {
+	static create(cwd: string, agentDir: string = getAgentDir()): SettingsManager {
 		const storage = new FileSettingsStorage(cwd, agentDir);
 		return SettingsManager.fromStorage(storage);
 	}
diff --git a/packages/coding-agent/src/core/skills.ts b/packages/coding-agent/src/core/skills.ts
index fc6077f9f..ae0e07e84 100644
--- a/packages/coding-agent/src/core/skills.ts
+++ b/packages/coding-agent/src/core/skills.ts
@@ -374,14 +374,14 @@ function escapeXml(str: string): string {
 }
 
 export interface LoadSkillsOptions {
-	/** Working directory for project-local skills. Default: process.cwd() */
-	cwd?: string;
-	/** Agent config directory for global skills. Default: ~/.pi/agent */
-	agentDir?: string;
+	/** Working directory for project-local skills. */
+	cwd: string;
+	/** Agent config directory for global skills. */
+	agentDir: string;
 	/** Explicit skill paths (files or directories) */
-	skillPaths?: string[];
-	/** Include default skills directories. Default: true */
-	includeDefaults?: boolean;
+	skillPaths: string[];
+	/** Include default skills directories. */
+	includeDefaults: boolean;
 }
 
 function normalizePath(input: string): string {
@@ -401,8 +401,8 @@ function resolveSkillPath(p: string, cwd: string): string {
  * Load skills from all configured locations.
  * Returns skills and any validation diagnostics.
  */
-export function loadSkills(options: LoadSkillsOptions = {}): LoadSkillsResult {
-	const { cwd = process.cwd(), agentDir, skillPaths = [], includeDefaults = true } = options;
+export function loadSkills(options: LoadSkillsOptions): LoadSkillsResult {
+	const { cwd, agentDir, skillPaths, includeDefaults } = options;
 
 	// Resolve agentDir - if not provided, use default from config
 	const resolvedAgentDir = agentDir ?? getAgentDir();
diff --git a/packages/coding-agent/src/core/system-prompt.ts b/packages/coding-agent/src/core/system-prompt.ts
index d5c445e41..6e4749926 100644
--- a/packages/coding-agent/src/core/system-prompt.ts
+++ b/packages/coding-agent/src/core/system-prompt.ts
@@ -16,8 +16,8 @@ export interface BuildSystemPromptOptions {
 	promptGuidelines?: string[];
 	/** Text to append to system prompt. */
 	appendSystemPrompt?: string;
-	/** Working directory. Default: process.cwd() */
-	cwd?: string;
+	/** Working directory. */
+	cwd: string;
 	/** Pre-loaded context files. */
 	contextFiles?: Array<{ path: string; content: string }>;
 	/** Pre-loaded skills. */
@@ -25,7 +25,7 @@ export interface BuildSystemPromptOptions {
 }
 
 /** Build the system prompt with tools, guidelines, and context */
-export function buildSystemPrompt(options: BuildSystemPromptOptions = {}): string {
+export function buildSystemPrompt(options: BuildSystemPromptOptions): string {
 	const {
 		customPrompt,
 		selectedTools,
@@ -36,7 +36,7 @@ export function buildSystemPrompt(options: BuildSystemPromptOptions = {}): strin
 		contextFiles: providedContextFiles,
 		skills: providedSkills,
 	} = options;
-	const resolvedCwd = cwd ?? process.cwd();
+	const resolvedCwd = cwd;
 	const promptCwd = resolvedCwd.replace(/\\/g, "/");
 
 	const now = new Date();
diff --git a/packages/coding-agent/src/core/tools/bash.ts b/packages/coding-agent/src/core/tools/bash.ts
index 0a5e0a585..6c425fd9b 100644
--- a/packages/coding-agent/src/core/tools/bash.ts
+++ b/packages/coding-agent/src/core/tools/bash.ts
@@ -444,7 +444,3 @@ export function createBashToolDefinition(
 export function createBashTool(cwd: string, options?: BashToolOptions): AgentTool<typeof bashSchema> {
 	return wrapToolDefinition(createBashToolDefinition(cwd, options));
 }
-
-/** Default bash tool using process.cwd() for backwards compatibility. */
-export const bashToolDefinition = createBashToolDefinition(process.cwd());
-export const bashTool = createBashTool(process.cwd());
diff --git a/packages/coding-agent/src/core/tools/edit.ts b/packages/coding-agent/src/core/tools/edit.ts
index e4bba04de..44a38ad02 100644
--- a/packages/coding-agent/src/core/tools/edit.ts
+++ b/packages/coding-agent/src/core/tools/edit.ts
@@ -485,7 +485,3 @@ export function createEditToolDefinition(
 export function createEditTool(cwd: string, options?: EditToolOptions): AgentTool<typeof editSchema> {
 	return wrapToolDefinition(createEditToolDefinition(cwd, options));
 }
-
-/** Default edit tool using process.cwd() for backwards compatibility. */
-export const editToolDefinition = createEditToolDefinition(process.cwd());
-export const editTool = createEditTool(process.cwd());
diff --git a/packages/coding-agent/src/core/tools/find.ts b/packages/coding-agent/src/core/tools/find.ts
index 0a8cbc2ad..4ca5e2c54 100644
--- a/packages/coding-agent/src/core/tools/find.ts
+++ b/packages/coding-agent/src/core/tools/find.ts
@@ -368,7 +368,3 @@ export function createFindToolDefinition(
 export function createFindTool(cwd: string, options?: FindToolOptions): AgentTool<typeof findSchema> {
 	return wrapToolDefinition(createFindToolDefinition(cwd, options));
 }
-
-/** Default find tool using process.cwd() for backwards compatibility. */
-export const findToolDefinition = createFindToolDefinition(process.cwd());
-export const findTool = createFindTool(process.cwd());
diff --git a/packages/coding-agent/src/core/tools/grep.ts b/packages/coding-agent/src/core/tools/grep.ts
index a9c072823..46928c392 100644
--- a/packages/coding-agent/src/core/tools/grep.ts
+++ b/packages/coding-agent/src/core/tools/grep.ts
@@ -382,7 +382,3 @@ export function createGrepToolDefinition(
 export function createGrepTool(cwd: string, options?: GrepToolOptions): AgentTool<typeof grepSchema> {
 	return wrapToolDefinition(createGrepToolDefinition(cwd, options));
 }
-
-/** Default grep tool using process.cwd() for backwards compatibility. */
-export const grepToolDefinition = createGrepToolDefinition(process.cwd());
-export const grepTool = createGrepTool(process.cwd());
diff --git a/packages/coding-agent/src/core/tools/ls.ts b/packages/coding-agent/src/core/tools/ls.ts
index 68dd9eef1..cb903250c 100644
--- a/packages/coding-agent/src/core/tools/ls.ts
+++ b/packages/coding-agent/src/core/tools/ls.ts
@@ -227,7 +227,3 @@ export function createLsToolDefinition(
 export function createLsTool(cwd: string, options?: LsToolOptions): AgentTool<typeof lsSchema> {
 	return wrapToolDefinition(createLsToolDefinition(cwd, options));
 }
-
-/** Default ls tool using process.cwd() for backwards compatibility. */
-export const lsToolDefinition = createLsToolDefinition(process.cwd());
-export const lsTool = createLsTool(process.cwd());
diff --git a/packages/coding-agent/src/core/tools/read.ts b/packages/coding-agent/src/core/tools/read.ts
index 4057fc38e..26095550c 100644
--- a/packages/coding-agent/src/core/tools/read.ts
+++ b/packages/coding-agent/src/core/tools/read.ts
@@ -271,7 +271,3 @@ export function createReadToolDefinition(
 export function createReadTool(cwd: string, options?: ReadToolOptions): AgentTool<typeof readSchema> {
 	return wrapToolDefinition(createReadToolDefinition(cwd, options));
 }
-
-/** Default read tool using process.cwd() for backwards compatibility. */
-export const readToolDefinition = createReadToolDefinition(process.cwd());
-export const readTool = createReadTool(process.cwd());
diff --git a/packages/coding-agent/src/core/tools/write.ts b/packages/coding-agent/src/core/tools/write.ts
index a03da5f6c..af07bdda5 100644
--- a/packages/coding-agent/src/core/tools/write.ts
+++ b/packages/coding-agent/src/core/tools/write.ts
@@ -279,7 +279,3 @@ export function createWriteToolDefinition(
 export function createWriteTool(cwd: string, options?: WriteToolOptions): AgentTool<typeof writeSchema> {
 	return wrapToolDefinition(createWriteToolDefinition(cwd, options));
 }
-
-/** Default write tool using process.cwd() for backwards compatibility. */
-export const writeToolDefinition = createWriteToolDefinition(process.cwd());
-export const writeTool = createWriteTool(process.cwd());
diff --git a/packages/coding-agent/src/index.ts b/packages/coding-agent/src/index.ts
index 65f05f5da..1240f7c16 100644
--- a/packages/coding-agent/src/index.ts
+++ b/packages/coding-agent/src/index.ts
@@ -183,8 +183,6 @@ export {
 	createReadTool,
 	createWriteTool,
 	type PromptTemplate,
-	// Pre-built tools (use process.cwd())
-	readOnlyTools,
 } from "./core/sdk.js";
 export {
 	type BranchSummaryEntry,
@@ -235,9 +233,6 @@ export {
 	type BashToolDetails,
 	type BashToolInput,
 	type BashToolOptions,
-	bashTool,
-	bashToolDefinition,
-	codingTools,
 	createBashToolDefinition,
 	createEditToolDefinition,
 	createFindToolDefinition,
@@ -252,33 +247,23 @@ export {
 	type EditToolDetails,
 	type EditToolInput,
 	type EditToolOptions,
-	editTool,
-	editToolDefinition,
 	type FindOperations,
 	type FindToolDetails,
 	type FindToolInput,
 	type FindToolOptions,
-	findTool,
-	findToolDefinition,
 	formatSize,
 	type GrepOperations,
 	type GrepToolDetails,
 	type GrepToolInput,
 	type GrepToolOptions,
-	grepTool,
-	grepToolDefinition,
 	type LsOperations,
 	type LsToolDetails,
 	type LsToolInput,
 	type LsToolOptions,
-	lsTool,
-	lsToolDefinition,
 	type ReadOperations,
 	type ReadToolDetails,
 	type ReadToolInput,
 	type ReadToolOptions,
-	readTool,
-	readToolDefinition,
 	type ToolsOptions,
 	type TruncationOptions,
 	type TruncationResult,
@@ -289,8 +274,6 @@ export {
 	type WriteToolInput,
 	type WriteToolOptions,
 	withFileMutationQueue,
-	writeTool,
-	writeToolDefinition,
 } from "./core/tools/index.js";
 // Main entry point
 export { type MainOptions, main } from "./main.js";
diff --git a/packages/coding-agent/src/migrations.ts b/packages/coding-agent/src/migrations.ts
index fef5eb640..5b6061aca 100644
--- a/packages/coding-agent/src/migrations.ts
+++ b/packages/coding-agent/src/migrations.ts
@@ -301,7 +301,7 @@ export async function showDeprecationWarnings(warnings: string[]): Promise<void>
  *
  * @returns Object with migration results and deprecation warnings
  */
-export function runMigrations(cwd: string = process.cwd()): {
+export function runMigrations(cwd: string): {
 	migratedAuthProviders: string[];
 	deprecationWarnings: string[];
 } {
diff --git a/packages/coding-agent/src/modes/interactive/components/tool-execution.ts b/packages/coding-agent/src/modes/interactive/components/tool-execution.ts
index 283e5127f..c6ed23744 100644
--- a/packages/coding-agent/src/modes/interactive/components/tool-execution.ts
+++ b/packages/coding-agent/src/modes/interactive/components/tool-execution.ts
@@ -1,6 +1,6 @@
 import { Box, type Component, Container, getCapabilities, Image, Spacer, Text, type TUI } from "@mariozechner/pi-tui";
 import type { ToolDefinition, ToolRenderContext } from "../../../core/extensions/types.js";
-import { allToolDefinitions } from "../../../core/tools/index.js";
+import { createAllToolDefinitions, type ToolName } from "../../../core/tools/index.js";
 import { getTextOutput as getRenderedTextOutput } from "../../../core/tools/render-utils.js";
 import { convertToPng } from "../../../utils/image-convert.js";
 import { theme } from "../theme/theme.js";
@@ -45,14 +45,14 @@ export class ToolExecutionComponent extends Container {
 		options: ToolExecutionOptions = {},
 		toolDefinition: ToolDefinition<any, any> | undefined,
 		ui: TUI,
-		cwd: string = process.cwd(),
+		cwd: string,
 	) {
 		super();
 		this.toolName = toolName;
 		this.toolCallId = toolCallId;
 		this.args = args;
 		this.toolDefinition = toolDefinition;
-		this.builtInToolDefinition = allToolDefinitions[toolName as keyof typeof allToolDefinitions];
+		this.builtInToolDefinition = createAllToolDefinitions(cwd)[toolName as ToolName];
 		this.showImages = options.showImages ?? true;
 		this.ui = ui;
 		this.cwd = cwd;
diff --git a/packages/coding-agent/src/utils/shell.ts b/packages/coding-agent/src/utils/shell.ts
index 9cd545979..1e9b5ed5b 100644
--- a/packages/coding-agent/src/utils/shell.ts
+++ b/packages/coding-agent/src/utils/shell.ts
@@ -53,7 +53,7 @@ export function getShellConfig(): { shell: string; args: string[] } {
 		return cachedShellConfig;
 	}
 
-	const settings = SettingsManager.create();
+	const settings = SettingsManager.create(process.cwd());
 	const customShellPath = settings.getShellPath();
 
 	// 1. Check user-specified shell path
diff --git a/packages/coding-agent/test/agent-session-compaction.test.ts b/packages/coding-agent/test/agent-session-compaction.test.ts
index feba45eef..307518f32 100644
--- a/packages/coding-agent/test/agent-session-compaction.test.ts
+++ b/packages/coding-agent/test/agent-session-compaction.test.ts
@@ -18,7 +18,7 @@ import { AuthStorage } from "../src/core/auth-storage.js";
 import { ModelRegistry } from "../src/core/model-registry.js";
 import { SessionManager } from "../src/core/session-manager.js";
 import { SettingsManager } from "../src/core/settings-manager.js";
-import { codingTools } from "../src/core/tools/index.js";
+import { createCodingTools } from "../src/index.js";
 import { API_KEY, createTestResourceLoader } from "./utilities.js";
 
 describe.skipIf(!API_KEY)("AgentSession compaction e2e", () => {
@@ -52,7 +52,7 @@ describe.skipIf(!API_KEY)("AgentSession compaction e2e", () => {
 			initialState: {
 				model,
 				systemPrompt: "You are a helpful assistant. Be concise.",
-				tools: codingTools,
+				tools: createCodingTools(process.cwd()),
 			},
 		});
 
diff --git a/packages/coding-agent/test/bash-close-hang-windows.test.ts b/packages/coding-agent/test/bash-close-hang-windows.test.ts
index ef8c79225..10ae6414e 100644
--- a/packages/coding-agent/test/bash-close-hang-windows.test.ts
+++ b/packages/coding-agent/test/bash-close-hang-windows.test.ts
@@ -3,8 +3,8 @@ import { existsSync, mkdirSync, readFileSync, rmSync } from "node:fs";
 import { tmpdir } from "node:os";
 import { join } from "node:path";
 import { afterEach, beforeEach, describe, expect, it } from "vitest";
-import { executeBash } from "../src/core/bash-executor.js";
-import { createBashTool } from "../src/core/tools/bash.js";
+import { executeBashWithOperations } from "../src/core/bash-executor.js";
+import { createBashTool, createLocalBashOperations } from "../src/core/tools/bash.js";
 
 function toBashSingleQuotedArg(value: string): string {
 	return `'${value.replace(/\\/g, "/").replace(/'/g, `'"'"'`)}'`;
@@ -87,9 +87,15 @@ describe.skipIf(process.platform !== "win32")("Windows child-process close handl
 		const controller = new AbortController();
 
 		try {
-			const result = await withTimeout(executeBash(command, { signal: controller.signal }), 3000, () => {
-				controller.abort();
-			});
+			const result = await withTimeout(
+				executeBashWithOperations(command, process.cwd(), createLocalBashOperations(), {
+					signal: controller.signal,
+				}),
+				3000,
+				() => {
+					controller.abort();
+				},
+			);
 
 			expect(result.output).toContain("child-exiting");
 			expect(result.exitCode).toBe(0);
diff --git a/packages/coding-agent/test/compaction-extensions.test.ts b/packages/coding-agent/test/compaction-extensions.test.ts
index b366a4793..48d039390 100644
--- a/packages/coding-agent/test/compaction-extensions.test.ts
+++ b/packages/coding-agent/test/compaction-extensions.test.ts
@@ -21,7 +21,7 @@ import { ModelRegistry } from "../src/core/model-registry.js";
 import { SessionManager } from "../src/core/session-manager.js";
 import { SettingsManager } from "../src/core/settings-manager.js";
 import { createSyntheticSourceInfo } from "../src/core/source-info.js";
-import { codingTools } from "../src/core/tools/index.js";
+import { createCodingTools } from "../src/index.js";
 import { createTestResourceLoader } from "./utilities.js";
 
 const API_KEY = process.env.ANTHROPIC_OAUTH_TOKEN || process.env.ANTHROPIC_API_KEY;
@@ -92,7 +92,7 @@ describe.skipIf(!API_KEY)("Compaction extensions", () => {
 			initialState: {
 				model,
 				systemPrompt: "You are a helpful assistant. Be concise.",
-				tools: codingTools,
+				tools: createCodingTools(process.cwd()),
 			},
 		});
 
diff --git a/packages/coding-agent/test/footer-data-provider.test.ts b/packages/coding-agent/test/footer-data-provider.test.ts
index c3d90532f..8a999fab4 100644
--- a/packages/coding-agent/test/footer-data-provider.test.ts
+++ b/packages/coding-agent/test/footer-data-provider.test.ts
@@ -112,7 +112,7 @@ describe("FooterDataProvider reftable branch detection", () => {
 		mkdirSync(nestedDir, { recursive: true });
 		process.chdir(nestedDir);
 
-		const provider = new FooterDataProvider();
+		const provider = new FooterDataProvider(nestedDir);
 		try {
 			expect(provider.getGitBranch()).toBe("main");
 			expect(vi.mocked(spawnSync)).not.toHaveBeenCalled();
@@ -125,7 +125,7 @@ describe("FooterDataProvider reftable branch detection", () => {
 		const repoDir = createPlainReftableRepo(tempDir);
 		process.chdir(repoDir);
 
-		const provider = new FooterDataProvider();
+		const provider = new FooterDataProvider(repoDir);
 		try {
 			expect(provider.getGitBranch()).toBe("main");
 			expect(vi.mocked(spawnSync)).toHaveBeenCalledWith(
@@ -146,7 +146,7 @@ describe("FooterDataProvider reftable branch detection", () => {
 		const { worktreeDir } = createReftableWorktree(tempDir);
 		process.chdir(worktreeDir);
 
-		const provider = new FooterDataProvider();
+		const provider = new FooterDataProvider(worktreeDir);
 		try {
 			expect(provider.getGitBranch()).toBe("main");
 		} finally {
@@ -159,7 +159,7 @@ describe("FooterDataProvider reftable branch detection", () => {
 		process.chdir(repoDir);
 		resolvedBranch = "";
 
-		const provider = new FooterDataProvider();
+		const provider = new FooterDataProvider(repoDir);
 		try {
 			expect(provider.getGitBranch()).toBe("detached");
 		} finally {
@@ -171,7 +171,7 @@ describe("FooterDataProvider reftable branch detection", () => {
 		const { worktreeDir, reftableDir } = createReftableWorktree(tempDir);
 		process.chdir(worktreeDir);
 
-		const provider = new FooterDataProvider();
+		const provider = new FooterDataProvider(worktreeDir);
 		try {
 			expect(provider.getGitBranch()).toBe("main");
 			vi.mocked(spawnSync).mockClear();
@@ -194,7 +194,7 @@ describe("FooterDataProvider reftable branch detection", () => {
 		const { worktreeDir, reftableDir } = createReftableWorktree(tempDir);
 		process.chdir(worktreeDir);
 
-		const provider = new FooterDataProvider();
+		const provider = new FooterDataProvider(worktreeDir);
 		try {
 			expect(provider.getGitBranch()).toBe("main");
 			vi.mocked(execFile).mockClear();
@@ -215,7 +215,7 @@ describe("FooterDataProvider reftable branch detection", () => {
 		const { worktreeDir, reftableDir } = createReftableWorktree(tempDir);
 		process.chdir(worktreeDir);
 
-		const provider = new FooterDataProvider();
+		const provider = new FooterDataProvider(worktreeDir);
 		try {
 			expect(provider.getGitBranch()).toBe("main");
 			resolvedBranch = "foo";
diff --git a/packages/coding-agent/test/prompt-templates.test.ts b/packages/coding-agent/test/prompt-templates.test.ts
index bef43f44b..67be0da4e 100644
--- a/packages/coding-agent/test/prompt-templates.test.ts
+++ b/packages/coding-agent/test/prompt-templates.test.ts
@@ -12,6 +12,7 @@ import { mkdirSync, rmSync, writeFileSync } from "fs";
 import { tmpdir } from "os";
 import { join } from "path";
 import { afterAll, describe, expect, test } from "vitest";
+import { getAgentDir } from "../src/config.js";
 import { loadPromptTemplates, parseCommandArgs, substituteArgs } from "../src/core/prompt-templates.js";
 
 // ============================================================================
@@ -406,6 +407,8 @@ You are given one or more GitHub PR URLs: $@`,
 		);
 
 		const templates = loadPromptTemplates({
+			cwd: process.cwd(),
+			agentDir: getAgentDir(),
 			promptPaths: [testDir],
 			includeDefaults: false,
 		});
@@ -427,6 +430,8 @@ Wrap it. Additional instructions: $ARGUMENTS`,
 		);
 
 		const templates = loadPromptTemplates({
+			cwd: process.cwd(),
+			agentDir: getAgentDir(),
 			promptPaths: [testDir],
 			includeDefaults: false,
 		});
@@ -447,6 +452,8 @@ Audit changelog entries for all commits since the last release.`,
 		);
 
 		const templates = loadPromptTemplates({
+			cwd: process.cwd(),
+			agentDir: getAgentDir(),
 			promptPaths: [testDir],
 			includeDefaults: false,
 		});
@@ -467,6 +474,8 @@ Do something`,
 		);
 
 		const templates = loadPromptTemplates({
+			cwd: process.cwd(),
+			agentDir: getAgentDir(),
 			promptPaths: [testDir],
 			includeDefaults: false,
 		});
@@ -487,6 +496,8 @@ Analyze GitHub issue(s): $ARGUMENTS`,
 		);
 
 		const templates = loadPromptTemplates({
+			cwd: process.cwd(),
+			agentDir: getAgentDir(),
 			promptPaths: [testDir],
 			includeDefaults: false,
 		});
diff --git a/packages/coding-agent/test/skills.test.ts b/packages/coding-agent/test/skills.test.ts
index f7426b30a..84803e6b1 100644
--- a/packages/coding-agent/test/skills.test.ts
+++ b/packages/coding-agent/test/skills.test.ts
@@ -354,6 +354,7 @@ describe("skills", () => {
 				agentDir: emptyAgentDir,
 				cwd: emptyCwd,
 				skillPaths: [join(fixturesDir, "valid-skill")],
+				includeDefaults: true,
 			});
 			expect(skills).toHaveLength(1);
 			expect(skills[0].sourceInfo.scope).toBe("temporary");
@@ -365,6 +366,7 @@ describe("skills", () => {
 				agentDir: emptyAgentDir,
 				cwd: emptyCwd,
 				skillPaths: ["/non/existent/path"],
+				includeDefaults: true,
 			});
 			expect(skills).toHaveLength(0);
 			expect(diagnostics.some((d: ResourceDiagnostic) => d.message.includes("does not exist"))).toBe(true);
@@ -376,11 +378,13 @@ describe("skills", () => {
 				agentDir: emptyAgentDir,
 				cwd: emptyCwd,
 				skillPaths: ["~/.pi/agent/skills"],
+				includeDefaults: true,
 			});
 			const { skills: withoutTilde } = loadSkills({
 				agentDir: emptyAgentDir,
 				cwd: emptyCwd,
 				skillPaths: [homeSkillsDir],
+				includeDefaults: true,
 			});
 			expect(withTilde.length).toBe(withoutTilde.length);
 		});
diff --git a/packages/coding-agent/test/system-prompt.test.ts b/packages/coding-agent/test/system-prompt.test.ts
index ce60df9ae..31a5d6b42 100644
--- a/packages/coding-agent/test/system-prompt.test.ts
+++ b/packages/coding-agent/test/system-prompt.test.ts
@@ -8,6 +8,7 @@ describe("buildSystemPrompt", () => {
 				selectedTools: [],
 				contextFiles: [],
 				skills: [],
+				cwd: process.cwd(),
 			});
 
 			expect(prompt).toContain("Available tools:\n(none)");
@@ -18,6 +19,7 @@ describe("buildSystemPrompt", () => {
 				selectedTools: [],
 				contextFiles: [],
 				skills: [],
+				cwd: process.cwd(),
 			});
 
 			expect(prompt).toContain("Show file paths clearly");
@@ -35,6 +37,7 @@ describe("buildSystemPrompt", () => {
 				},
 				contextFiles: [],
 				skills: [],
+				cwd: process.cwd(),
 			});
 
 			expect(prompt).toContain("- read:");
@@ -53,6 +56,7 @@ describe("buildSystemPrompt", () => {
 				},
 				contextFiles: [],
 				skills: [],
+				cwd: process.cwd(),
 			});
 
 			expect(prompt).toContain("- dynamic_tool: Run dynamic test behavior");
@@ -63,6 +67,7 @@ describe("buildSystemPrompt", () => {
 				selectedTools: ["read", "dynamic_tool"],
 				contextFiles: [],
 				skills: [],
+				cwd: process.cwd(),
 			});
 
 			expect(prompt).not.toContain("dynamic_tool");
@@ -76,6 +81,7 @@ describe("buildSystemPrompt", () => {
 				promptGuidelines: ["Use dynamic_tool for project summaries."],
 				contextFiles: [],
 				skills: [],
+				cwd: process.cwd(),
 			});
 
 			expect(prompt).toContain("- Use dynamic_tool for project summaries.");
@@ -87,6 +93,7 @@ describe("buildSystemPrompt", () => {
 				promptGuidelines: ["Use dynamic_tool for summaries.", "  Use dynamic_tool for summaries.  ", "   "],
 				contextFiles: [],
 				skills: [],
+				cwd: process.cwd(),
 			});
 
 			expect(prompt.match(/- Use dynamic_tool for summaries\./g)).toHaveLength(1);
diff --git a/packages/coding-agent/test/tool-execution-component.test.ts b/packages/coding-agent/test/tool-execution-component.test.ts
index 1bfb0ec27..b9b597eb4 100644
--- a/packages/coding-agent/test/tool-execution-component.test.ts
+++ b/packages/coding-agent/test/tool-execution-component.test.ts
@@ -40,7 +40,15 @@ describe("ToolExecutionComponent parity", () => {
 			renderResult: () => new Text("custom result", 0, 0),
 		};
 
-		const component = new ToolExecutionComponent("custom_tool", "tool-1", {}, {}, toolDefinition, createFakeTui());
+		const component = new ToolExecutionComponent(
+			"custom_tool",
+			"tool-1",
+			{},
+			{},
+			toolDefinition,
+			createFakeTui(),
+			process.cwd(),
+		);
 		expect(stripAnsi(component.render(120).join("\n"))).toContain("custom call");
 
 		component.updateResult(
@@ -69,6 +77,7 @@ describe("ToolExecutionComponent parity", () => {
 			{},
 			overrideDefinition,
 			createFakeTui(),
+			process.cwd(),
 		);
 		component.updateResult({ content: [], details: { diff: "+1 after", firstChangedLine: 1 }, isError: false });
 		const rendered = stripAnsi(component.render(120).join("\n"));
@@ -85,6 +94,7 @@ describe("ToolExecutionComponent parity", () => {
 			{},
 			undefined,
 			createFakeTui(),
+			process.cwd(),
 		);
 		const rendered = stripAnsi(component.render(120).join("\n"));
 		expect(rendered).toContain("read");
@@ -119,6 +129,7 @@ describe("ToolExecutionComponent parity", () => {
 			{},
 			createReadToolDefinition(process.cwd()),
 			createFakeTui(),
+			process.cwd(),
 		);
 		component.updateResult({ content: [{ type: "text", text: "hello" }], details: undefined, isError: false }, false);
 		const rendered = stripAnsi(component.render(120).join("\n"));
@@ -138,6 +149,7 @@ describe("ToolExecutionComponent parity", () => {
 			{},
 			overrideDefinition,
 			createFakeTui(),
+			process.cwd(),
 		);
 		component.updateResult({ content: [{ type: "text", text: "hello" }], details: undefined, isError: false }, false);
 		const rendered = stripAnsi(component.render(120).join("\n"));
@@ -158,6 +170,7 @@ describe("ToolExecutionComponent parity", () => {
 			{},
 			overrideDefinition,
 			createFakeTui(),
+			process.cwd(),
 		);
 		component.updateResult({ content: [{ type: "text", text: "hello" }], details: undefined, isError: false }, false);
 		const rendered = stripAnsi(component.render(120).join("\n"));
@@ -179,6 +192,7 @@ describe("ToolExecutionComponent parity", () => {
 				renderResult: () => new Text("override result", 0, 0),
 			},
 			createFakeTui(),
+			process.cwd(),
 		);
 		component.updateResult({ content: [{ type: "text", text: "hello" }], details: undefined, isError: false }, false);
 		const rendered = stripAnsi(component.render(120).join("\n"));
@@ -201,6 +215,7 @@ describe("ToolExecutionComponent parity", () => {
 				renderResult: () => new Text("wrapped override result", 0, 0),
 			},
 			createFakeTui(),
+			process.cwd(),
 		);
 		component.updateResult({ content: [{ type: "text", text: "hello" }], details: undefined, isError: false }, false);
 		const rendered = stripAnsi(component.render(120).join("\n"));
@@ -221,7 +236,15 @@ describe("ToolExecutionComponent parity", () => {
 			},
 		};
 
-		const component = new ToolExecutionComponent("custom_tool", "tool-5", {}, {}, toolDefinition, createFakeTui());
+		const component = new ToolExecutionComponent(
+			"custom_tool",
+			"tool-5",
+			{},
+			{},
+			toolDefinition,
+			createFakeTui(),
+			process.cwd(),
+		);
 		component.updateResult({ content: [{ type: "text", text: "done" }], details: {}, isError: false }, false);
 		const rendered = stripAnsi(component.render(120).join("\n"));
 		expect(rendered).toContain("custom call shared-token");
@@ -243,6 +266,7 @@ describe("ToolExecutionComponent parity", () => {
 			{},
 			toolDefinition,
 			createFakeTui(),
+			process.cwd(),
 		);
 		component.updateResult({ content: [{ type: "text", text: "done" }], details: {}, isError: false }, false);
 		const rendered = stripAnsi(component.render(120).join("\n"));
@@ -261,6 +285,7 @@ describe("ToolExecutionComponent parity", () => {
 			{},
 			toolDefinition,
 			createFakeTui(),
+			process.cwd(),
 		);
 		component.updateResult({ content: [{ type: "text", text: "done" }], details: {}, isError: false }, false);
 		const rendered = stripAnsi(component.render(120).join("\n"));
@@ -276,6 +301,7 @@ describe("ToolExecutionComponent parity", () => {
 			{},
 			createWriteToolDefinition(process.cwd()),
 			createFakeTui(),
+			process.cwd(),
 		);
 		const rendered = stripAnsi(component.render(120).join("\n"));
 		expect(rendered).toContain("one");
@@ -291,6 +317,7 @@ describe("ToolExecutionComponent parity", () => {
 			{},
 			createReadToolDefinition(process.cwd()),
 			createFakeTui(),
+			process.cwd(),
 		);
 		component.updateResult(
 			{ content: [{ type: "text", text: "one\ntwo\n" }], details: undefined, isError: false },
diff --git a/packages/coding-agent/test/tools.test.ts b/packages/coding-agent/test/tools.test.ts
index 5cb122790..2d45dbae5 100644
--- a/packages/coding-agent/test/tools.test.ts
+++ b/packages/coding-agent/test/tools.test.ts
@@ -2,16 +2,26 @@ import { existsSync, mkdirSync, readFileSync, rmSync, writeFileSync } from "fs";
 import { tmpdir } from "os";
 import { join } from "path";
 import { afterEach, beforeEach, describe, expect, it, vi } from "vitest";
-import { executeBash } from "../src/core/bash-executor.js";
-import { bashTool, createBashTool, createLocalBashOperations } from "../src/core/tools/bash.js";
-import { editTool } from "../src/core/tools/edit.js";
-import { findTool } from "../src/core/tools/find.js";
-import { grepTool } from "../src/core/tools/grep.js";
-import { lsTool } from "../src/core/tools/ls.js";
-import { readTool } from "../src/core/tools/read.js";
-import { writeTool } from "../src/core/tools/write.js";
+import { executeBashWithOperations } from "../src/core/bash-executor.js";
+import { createBashTool, createLocalBashOperations } from "../src/core/tools/bash.js";
+import {
+	createEditTool,
+	createFindTool,
+	createGrepTool,
+	createLsTool,
+	createReadTool,
+	createWriteTool,
+} from "../src/index.js";
 import * as shellModule from "../src/utils/shell.js";
 
+const readTool = createReadTool(process.cwd());
+const writeTool = createWriteTool(process.cwd());
+const editTool = createEditTool(process.cwd());
+const bashTool = createBashTool(process.cwd());
+const grepTool = createGrepTool(process.cwd());
+const findTool = createFindTool(process.cwd());
+const lsTool = createLsTool(process.cwd());
+
 // Helper to extract text from content blocks
 function getTextOutput(result: any): string {
 	return (
@@ -438,7 +448,11 @@ describe("Coding Agent Tools", () => {
 		});
 
 		it("should preserve executeBash sanitization when using local bash operations", async () => {
-			const result = await executeBash("printf '\\033[31mred\\033[0m\\r\\n'");
+			const result = await executeBashWithOperations(
+				"printf '\\033[31mred\\033[0m\\r\\n'",
+				process.cwd(),
+				createLocalBashOperations(),
+			);
 
 			expect(result.exitCode).toBe(0);
 			expect(result.output).toBe("red\n");
@@ -468,7 +482,7 @@ describe("Coding Agent Tools", () => {
 		});
 
 		it("executeBash should persist full output when truncation happens by line count only", async () => {
-			const result = await executeBash("seq 3000");
+			const result = await executeBashWithOperations("seq 3000", process.cwd(), createLocalBashOperations());
 			const fullOutputPath = result.fullOutputPath;
 
 			expect(result.truncated).toBe(true);
diff --git a/packages/coding-agent/test/utilities.ts b/packages/coding-agent/test/utilities.ts
index 5ede0a574..b5113be1d 100644
--- a/packages/coding-agent/test/utilities.ts
+++ b/packages/coding-agent/test/utilities.ts
@@ -17,7 +17,7 @@ import { ModelRegistry } from "../src/core/model-registry.js";
 import type { ResourceLoader } from "../src/core/resource-loader.js";
 import { SessionManager } from "../src/core/session-manager.js";
 import { SettingsManager } from "../src/core/settings-manager.js";
-import { codingTools } from "../src/core/tools/index.js";
+import { createCodingTools } from "../src/index.js";
 
 /**
  * API key for authenticated tests. Tests using this should be wrapped in
@@ -242,7 +242,7 @@ export function createTestSession(options: TestSessionOptions = {}): TestSession
 		initialState: {
 			model,
 			systemPrompt: options.systemPrompt ?? "You are a helpful assistant. Be extremely concise.",
-			tools: codingTools,
+			tools: createCodingTools(process.cwd()),
 		},
 	});
 
diff --git a/packages/tui/src/autocomplete.ts b/packages/tui/src/autocomplete.ts
index 4ff1b6b73..7137d5f4f 100644
--- a/packages/tui/src/autocomplete.ts
+++ b/packages/tui/src/autocomplete.ts
@@ -265,11 +265,7 @@ export class CombinedAutocompleteProvider implements AutocompleteProvider {
 	private basePath: string;
 	private fdPath: string | null;
 
-	constructor(
-		commands: (SlashCommand | AutocompleteItem)[] = [],
-		basePath: string = process.cwd(),
-		fdPath: string | null = null,
-	) {
+	constructor(commands: (SlashCommand | AutocompleteItem)[] = [], basePath: string, fdPath: string | null = null) {
 		this.commands = commands;
 		this.basePath = basePath;
 		this.fdPath = fdPath;
diff --git a/packages/tui/src/components/loader.ts b/packages/tui/src/components/loader.ts
index 780363d57..6bac6ce81 100644
--- a/packages/tui/src/components/loader.ts
+++ b/packages/tui/src/components/loader.ts
@@ -20,6 +20,7 @@ export class Loader extends Text {
 	private currentFrame = 0;
 	private intervalId: NodeJS.Timeout | null = null;
 	private ui: TUI | null = null;
+	private renderIndicatorVerbatim = false;
 
 	constructor(
 		ui: TUI,
@@ -55,7 +56,8 @@ export class Loader extends Text {
 	}
 
 	setIndicator(indicator?: LoaderIndicatorOptions): void {
-		this.frames = indicator?.frames ? [...indicator.frames] : [...DEFAULT_FRAMES];
+		this.renderIndicatorVerbatim = indicator !== undefined;
+		this.frames = indicator?.frames !== undefined ? [...indicator.frames] : [...DEFAULT_FRAMES];
 		this.intervalMs = indicator?.intervalMs && indicator.intervalMs > 0 ? indicator.intervalMs : DEFAULT_INTERVAL_MS;
 		this.currentFrame = 0;
 		this.start();
@@ -74,7 +76,8 @@ export class Loader extends Text {
 
 	private updateDisplay(): void {
 		const frame = this.frames[this.currentFrame] ?? "";
-		const indicator = frame.length > 0 ? `${this.spinnerColorFn(frame)} ` : "";
+		const renderedFrame = this.renderIndicatorVerbatim ? frame : this.spinnerColorFn(frame);
+		const indicator = frame.length > 0 ? `${renderedFrame} ` : "";
 		this.setText(`${indicator}${this.messageColorFn(this.message)}`);
 		if (this.ui) {
 			this.ui.requestRender();
diff --git a/packages/tui/test/editor.test.ts b/packages/tui/test/editor.test.ts
index 51566eb9f..666d90590 100644
--- a/packages/tui/test/editor.test.ts
+++ b/packages/tui/test/editor.test.ts
@@ -2476,14 +2476,17 @@ describe("Editor component", () => {
 
 		it("awaits async slash command argument completions", async () => {
 			const editor = new Editor(createTestTUI(), defaultEditorTheme);
-			const provider = new CombinedAutocompleteProvider([
-				{
-					name: "load-skills",
-					description: "Load skills",
-					getArgumentCompletions: async (prefix) =>
-						prefix.startsWith("s") ? [{ value: "skill-a", label: "skill-a" }] : null,
-				},
-			]);
+			const provider = new CombinedAutocompleteProvider(
+				[
+					{
+						name: "load-skills",
+						description: "Load skills",
+						getArgumentCompletions: async (prefix) =>
+							prefix.startsWith("s") ? [{ value: "skill-a", label: "skill-a" }] : null,
+					},
+				],
+				process.cwd(),
+			);
 			editor.setAutocompleteProvider(provider);
 			editor.setText("/load-skills ");
 
@@ -2498,15 +2501,18 @@ describe("Editor component", () => {
 
 		it("ignores invalid slash command argument completion results", async () => {
 			const editor = new Editor(createTestTUI(), defaultEditorTheme);
-			const provider = new CombinedAutocompleteProvider([
-				{
-					name: "load-skills",
-					description: "Load skills",
-					getArgumentCompletions: (() => "not-an-array") as unknown as (
-						argumentPrefix: string,
-					) => Promise<{ value: string; label: string }[] | null>,
-				},
-			]);
+			const provider = new CombinedAutocompleteProvider(
+				[
+					{
+						name: "load-skills",
+						description: "Load skills",
+						getArgumentCompletions: (() => "not-an-array") as unknown as (
+							argumentPrefix: string,
+						) => Promise<{ value: string; label: string }[] | null>,
+					},
+				],
+				process.cwd(),
+			);
 			editor.setAutocompleteProvider(provider);
 			editor.setText("/load-skills ");
 
@@ -2518,14 +2524,17 @@ describe("Editor component", () => {
 
 		it("does not show argument completions when command has no argument completer", async () => {
 			const editor = new Editor(createTestTUI(), defaultEditorTheme);
-			const provider = new CombinedAutocompleteProvider([
-				{ name: "help", description: "Show help" },
-				{
-					name: "model",
-					description: "Switch model",
-					getArgumentCompletions: () => [{ value: "claude-opus", label: "claude-opus" }],
-				},
-			]);
+			const provider = new CombinedAutocompleteProvider(
+				[
+					{ name: "help", description: "Show help" },
+					{
+						name: "model",
+						description: "Switch model",
+						getArgumentCompletions: () => [{ value: "claude-opus", label: "claude-opus" }],
+					},
+				],
+				process.cwd(),
+			);
 			editor.setAutocompleteProvider(provider);
 
 			editor.handleInput("/");