diff --git a/backend/apps/agents/manager/run/RunOptions.py b/backend/apps/agents/manager/run/RunOptions.py
index c72705e4..93270aae 100644
--- a/backend/apps/agents/manager/run/RunOptions.py
+++ b/backend/apps/agents/manager/run/RunOptions.py
@@ -293,7 +293,15 @@ class RunOptions(AgentManagerProtocol):
                 fenced = wrap_platform_note(f"Summary of earlier conversation (older turns compacted):\n{distilled}")
                 history = f"{fenced}\n\n{history}" if history else fenced
             if history:
-                if isinstance(prompt_content, str):
+                # SYSTEM channel, not the user message (ENG-358 structural fix): a transcript recap
+                # inside user content is byte-for-byte what anti-distillation filters hunt, and no
+                # rewording makes that shape safe forever. The system prompt is platform-authored
+                # context by definition, and this branch only runs on fresh-session turns where the
+                # cached prefix is already busted, so the cache cost is zero.
+                p_sys = options_kwargs.get("system_prompt")
+                if isinstance(p_sys, dict):
+                    p_sys["append"] = f"{p_sys.get('append', '')}\n\n{history}".strip()
+                elif isinstance(prompt_content, str):
                     prompt_content = history + "\n\n" + prompt_content
                 elif isinstance(prompt_content, list):
                     prompt_content.insert(0, {"type": "text", "text": history})
diff --git a/backend/tests/test_content_policy_block.py b/backend/tests/test_content_policy_block.py
index 96ac90dd..0bce0208 100644
--- a/backend/tests/test_content_policy_block.py
+++ b/backend/tests/test_content_policy_block.py
@@ -72,3 +72,17 @@ def test_second_policy_block_renders_the_terminal_card():
     asyncio.run(handle_run_error(Exception(TOS_TEXT), s, "sid-pol2", TurnState(), []))
     cards = [m for m in s.messages if m.role == "system"]
     assert len(cards) == 1 and "declined this request" in str(cards[0].content)
+
+
+def test_recap_rides_the_system_channel_not_the_user_message():
+    """The structural ENG-358 fix: history injection must land in system_prompt.append, and the
+    user message must stay exactly what the user (or the continuation) wrote. A transcript recap
+    inside user content is the anti-distillation filter's exact target shape."""
+    src = open("backend/apps/agents/manager/run/RunOptions.py").read()
+    inject = src.split('p_sys = options_kwargs.get("system_prompt")')[1][:600]
+    assert 'p_sys["append"]' in inject, "system-channel injection missing"
+    # The user-message fallback survives only for the exotic no-system_prompt case.
+    before = src.split('p_sys = options_kwargs.get("system_prompt")')[0]
+    tail = before[-1200:]
+    assert "elif isinstance(prompt_content, str)" not in tail.replace(
+        'p_sys = options_kwargs.get("system_prompt")', ""), "primary path must not touch prompt_content"