diff --git a/src/services/worker/agents/ResponseProcessor.ts b/src/services/worker/agents/ResponseProcessor.ts
index 3487764f..74bd87ef 100644
--- a/src/services/worker/agents/ResponseProcessor.ts
+++ b/src/services/worker/agents/ResponseProcessor.ts
@@ -85,6 +85,27 @@ export async function processAgentResponse(
   // Convert nullable fields to empty strings for storeSummary (if summary exists)
   const summaryForStore = normalizeSummaryForStorage(summary);
 
+  // Fallback: When summary parse fails but observations exist, salvage a synthetic summary.
+  // Fixes Issue #1312: AI sometimes returns <observation> instead of <summary> despite clear instructions.
+  // Observations are stored normally; this only affects the session summary.
+  let finalSummaryForStore = summaryForStore;
+  if (!summaryForStore && observations.length > 0) {
+    const primary = observations[0];
+    finalSummaryForStore = {
+      request: primary.title || `Session observations (${observations.length} items)`,
+      investigated: primary.narrative || primary.facts?.join('; ') || '',
+      learned: primary.facts?.join('; ') || '',
+      completed: primary.type === 'feature' || primary.type === 'bugfix' ? (primary.title || '') : '',
+      next_steps: '',
+      notes: `[Salvaged from ${observations.length} observation(s)] AI returned <observation> instead of <summary>`
+    };
+    logger.warn('PARSER', `SALVAGED summary from ${observations.length} observation(s) — AI did not output <summary> tags`, {
+      sessionId: session.sessionDbId,
+      agentName,
+      observationIds: observations.map(o => o.title).filter(Boolean).slice(0, 3)
+    });
+  }
+
   // Get session store for atomic transaction
   const sessionStore = dbManager.getSessionStore();
 
@@ -102,7 +123,7 @@ export async function processAgentResponse(
   sessionStore.ensureMemorySessionIdRegistered(session.sessionDbId, session.memorySessionId);
 
   // Log pre-storage with session ID chain for verification
-  logger.info('DB', `STORING | sessionDbId=${session.sessionDbId} | memorySessionId=${session.memorySessionId} | obsCount=${observations.length} | hasSummary=${!!summaryForStore}`, {
+  logger.info('DB', `STORING | sessionDbId=${session.sessionDbId} | memorySessionId=${session.memorySessionId} | obsCount=${observations.length} | hasSummary=${!!finalSummaryForStore}`, {
     sessionId: session.sessionDbId,
     memorySessionId: session.memorySessionId
   });
@@ -113,7 +134,7 @@ export async function processAgentResponse(
     session.memorySessionId,
     session.project,
     observations,
-    summaryForStore,
+    finalSummaryForStore,
     session.lastPromptNumber,
     discoveryTokens,
     originalTimestamp ?? undefined,
@@ -153,7 +174,7 @@ export async function processAgentResponse(
   // Sync and broadcast summary if present
   await syncAndBroadcastSummary(
     summary,
-    summaryForStore,
+    finalSummaryForStore,
     result,
     session,
     dbManager,