diff --git a/packages/api/src/agents/activityLabels/__tests__/host.spec.ts b/packages/api/src/agents/activityLabels/__tests__/host.spec.ts
index 50a3ff6196..ea49989e09 100644
--- a/packages/api/src/agents/activityLabels/__tests__/host.spec.ts
+++ b/packages/api/src/agents/activityLabels/__tests__/host.spec.ts
@@ -159,6 +159,31 @@ describe('resolveActivityLabelModel model precedence', () => {
       expect.objectContaining({ model_parameters: { model: 'label-model' } }),
     );
   });
+
+  /** The label often runs a cheaper model than the primary generation, so
+   *  primary-only options (thinking, output caps) must be stripped exactly
+   *  like the title path — while proxy headers survive. */
+  it('strips primary-generation options but keeps the Anthropic header carrier', async () => {
+    mockGetOptions.mockResolvedValueOnce({
+      llmConfig: {
+        model: 'resolved',
+        thinking: { type: 'enabled', budget_tokens: 4096 },
+        maxOutputTokens: 8192,
+        streaming: true,
+        modelKwargs: { max_output_tokens: 8192, service_tier: 'flex' },
+        clientOptions: { defaultHeaders: { 'x-proxy-key': 'abc' } },
+      },
+    } as never);
+    const resolved = await resolve({ activityLabel: true, activityModel: 'label-model' });
+    const clientOptions = resolved.clientOptions as Record<string, unknown>;
+    expect(clientOptions.thinking).toBeUndefined();
+    expect(clientOptions.maxOutputTokens).toBeUndefined();
+    expect(clientOptions.streaming).toBeUndefined();
+    expect(clientOptions.modelKwargs).toEqual({ service_tier: 'flex' });
+    expect(clientOptions.clientOptions).toEqual({
+      defaultHeaders: { 'x-proxy-key': 'abc' },
+    });
+  });
 });
 
 describe('mapCollectedMetadataToUsage cache tokens', () => {
diff --git a/packages/api/src/agents/activityLabels/__tests__/runtime.spec.ts b/packages/api/src/agents/activityLabels/__tests__/runtime.spec.ts
index 59ecdae66d..e74e956501 100644
--- a/packages/api/src/agents/activityLabels/__tests__/runtime.spec.ts
+++ b/packages/api/src/agents/activityLabels/__tests__/runtime.spec.ts
@@ -175,6 +175,38 @@ describe('buildPrompt', () => {
     expect(tight).toContain('…');
   });
 
+  /** Per-entry truncation alone leaves the batch dimension unbounded: a
+   *  parallel batch of hundreds of calls must not build a prompt past the
+   *  fast model's window. */
+  it('bounds the total entries section for giant parallel batches', () => {
+    const entries = Array.from({ length: 200 }, (_, i) => ({
+      toolName: `tool_${i}`,
+      toolInput: { i },
+      toolUseId: `t${i}`,
+      status: 'success' as const,
+      toolOutput: 'y'.repeat(500),
+    }));
+    const prompt = buildPrompt(entries, 600);
+    expect(prompt.length).toBeLessThan(15_000);
+    expect(prompt).toMatch(/\(\+\d+ more tool calls not shown\)/);
+    /** Prefix semantics: the first entry is always present in full. */
+    expect(prompt).toContain('- tool_0(');
+    expect(prompt).not.toContain('- tool_199(');
+  });
+
+  it('shows every entry when the batch fits the budget', () => {
+    const entries = Array.from({ length: 3 }, (_, i) => ({
+      toolName: `tool_${i}`,
+      toolInput: { i },
+      toolUseId: `t${i}`,
+      status: 'success' as const,
+      toolOutput: 'ok',
+    }));
+    const prompt = buildPrompt(entries, 600);
+    expect(prompt).toContain('- tool_2(');
+    expect(prompt).not.toContain('more tool calls not shown');
+  });
+
   it('serializes small structured values exactly like JSON.stringify', () => {
     const toolInput = { q: 'docs', filters: { lang: 'en', page: 2 }, ids: [1, 2] };
     const prompt = buildPrompt(
diff --git a/packages/api/src/agents/activityLabels/host.ts b/packages/api/src/agents/activityLabels/host.ts
index 846f874d1d..fdb30c8227 100644
--- a/packages/api/src/agents/activityLabels/host.ts
+++ b/packages/api/src/agents/activityLabels/host.ts
@@ -8,6 +8,7 @@ import type { EndpointDbMethods, OpenAIConfiguration, ServerRequest } from '~/ty
 import type { ActivityLabelLLM } from './runtime';
 import { getProviderConfig } from '~/endpoints/config/providers';
 import { resolveConfigHeaders } from '~/utils/headers';
+import { omitTitleOptions } from '~/agents/client';
 import { createSafeUser } from '~/utils/env';
 
 /** Cache-token details in the LangChain-standard normalized shape. */
@@ -289,7 +290,36 @@ export async function resolveActivityLabelModel({
   ) {
     provider = Providers.AZURE;
   }
-  const clientOptions = { ...(llmConfig ?? {}) } as MaybeAzureConfig;
+  /** Sanitized copy, exactly like the title path: the label often runs a
+   *  DIFFERENT (cheaper) model than the primary generation, so
+   *  primary-generation options must not ride along. `omitTitleOptions`
+   *  drops thinking/streaming/output-cap keys that can make the label
+   *  request fail outright on the substitute model — or spend extended
+   *  thinking on a 4–9 word header and blow the settlement window. The
+   *  `modelKwargs` output caps go for the same reason (copied, not mutated:
+   *  `llmConfig` is shared with the memoized provider resolution). */
+  const rawOptions = { ...(llmConfig ?? {}) } as MaybeAzureConfig & {
+    modelKwargs?: Record<string, unknown>;
+    clientOptions?: { defaultHeaders?: unknown };
+  };
+  if (rawOptions.modelKwargs != null) {
+    const modelKwargs = { ...rawOptions.modelKwargs };
+    delete modelKwargs.max_completion_tokens;
+    delete modelKwargs.max_output_tokens;
+    rawOptions.modelKwargs = modelKwargs;
+  }
+  /** The filter drops the Anthropic `clientOptions` carrier (thinking,
+   *  streaming), which would also drop its `defaultHeaders` — restore the
+   *  SAME object reference so gateway/proxy metadata still reaches label
+   *  requests and `resolveConfigHeaders` mutates the object the client is
+   *  actually built from. */
+  const anthropicCarrier = rawOptions.clientOptions;
+  const clientOptions = Object.fromEntries(
+    Object.entries(rawOptions).filter(([key]) => !omitTitleOptions.has(key)),
+  ) as MaybeAzureConfig & { clientOptions?: { defaultHeaders?: unknown } };
+  if (anthropicCarrier?.defaultHeaders != null && clientOptions.clientOptions == null) {
+    clientOptions.clientOptions = anthropicCarrier;
+  }
   if (options.configOptions) {
     clientOptions.configuration = options.configOptions;
   }
diff --git a/packages/api/src/agents/activityLabels/runtime.ts b/packages/api/src/agents/activityLabels/runtime.ts
index 53a90d1073..f623f75c3d 100644
--- a/packages/api/src/agents/activityLabels/runtime.ts
+++ b/packages/api/src/agents/activityLabels/runtime.ts
@@ -174,6 +174,13 @@ const DEFAULT_CHAR_LIMIT = 600;
  *  reach a distinguishing path or query past the first 200 characters. */
 const INTENT_CHAR_LIMIT = 200;
 const SUMMARY_TIMEOUT_MS = 12_000;
+/** Total budget for the entries section. Per-entry truncation alone leaves
+ *  the batch dimension unbounded — a parallel batch of hundreds of calls
+ *  would build a prompt past the fast model's window and bill input tokens
+ *  far beyond what a one-line header justifies. Scales with the configured
+ *  per-entry limit so a raised `activityCharLimit` still fits several
+ *  entries; entries past the budget are skipped WITHOUT serializing them. */
+const ENTRIES_CHAR_BUDGET = 8_000;
 /** Hard bound on the PERSISTED label. The instruction asks for 4–9 words, but
  *  a model that ignores it — or is steered by injection through untrusted
  *  tool output — could otherwise turn one header into thousands of tokens
@@ -348,14 +355,32 @@ export function buildPrompt(
           .join('\n'),
     );
   }
-  const lines = entries.map((entry) => {
+  const budget = Math.max(ENTRIES_CHAR_BUDGET, charLimit * 4);
+  const lines: string[] = [];
+  let used = 0;
+  let omitted = 0;
+  for (const entry of entries) {
+    /** Prefix cut, never a mid-list sample: once the budget is spent the
+     *  remaining entries are skipped unserialized (a giant batch must not
+     *  even pay the stringify cost for lines that will be dropped). The
+     *  first entry always fits, and the line that crosses the budget is
+     *  kept, so at least one complete call is always shown. */
+    if (lines.length > 0 && used >= budget) {
+      omitted += 1;
+      continue;
+    }
     const input = truncate(stringifyUnknown(entry.toolInput, charLimit), charLimit);
     const outcome =
       entry.status === 'error'
         ? `ERROR: ${truncate(entry.error ?? 'unknown error', charLimit)}`
         : truncate(stringifyUnknown(entry.toolOutput, charLimit), charLimit);
-    return `- ${entry.toolName}(${input}) → ${outcome}`;
-  });
+    const line = `- ${entry.toolName}(${input}) → ${outcome}`;
+    lines.push(line);
+    used += line.length;
+  }
+  if (omitted > 0) {
+    lines.push(`- (+${omitted} more tool calls not shown)`);
+  }
   /** Flagged as reference material: without this the model tends to read the
    *  list as the thing to summarize and hands back a transcription of it. */
   sections.push(`What it called, and what came back (do not restate these):\n${lines.join('\n')}`);