diff --git a/ai-hub/app/core/orchestration/agent_loop.py b/ai-hub/app/core/orchestration/agent_loop.py
index 4db1952..f7f56e6 100644
--- a/ai-hub/app/core/orchestration/agent_loop.py
+++ b/ai-hub/app/core/orchestration/agent_loop.py
@@ -115,8 +115,9 @@
                         # Stream real-time thoughts for UI observability
                         instance = db.query(AgentInstance).filter(AgentInstance.id == agent_id).first()
                         content = event.get("content", "")
-                        if not instance.last_reasoning: instance.last_reasoning = ""
-                        instance.last_reasoning += content
+                        current_reasoning = instance.last_reasoning or ""
+                        # Apply live compression to ensure 'inplace' feeling for turn headers & boilerplate
+                        instance.last_reasoning = self._compress_reasoning(current_reasoning + content)
                         
                         # Forward to Swarm Registry so the Node List/Swarm Control UI sees it
                         registry = getattr(rag_service, "node_registry_service", None)
@@ -181,9 +182,15 @@
                 print(f"[AgentExecutor] RAG execution failed for {agent_id}: {e}")
                 print(traceback.format_exc())
                 instance = db.query(AgentInstance).filter(AgentInstance.id == agent_id).first()
-                instance.status = "error_suspended"
-                instance.last_error = str(e)
-                db.commit()
+                if instance:
+                    instance.status = "error_suspended"
+                    instance.last_error = str(e)
+                    db.commit()
+                return {
+                    "status": "error",
+                    "response": f"Execution failed: {str(e)}",
+                    "reasoning": instance.last_reasoning if instance else ""
+                }
 
         except Exception as e:
             print(f"[AgentExecutor] Unhandled loop error: {e}")
@@ -192,21 +199,36 @@
                 instance.status = "error_suspended"
                 instance.last_error = f"Unhandled loop error: {str(e)}"
                 db.commit()
+            return {
+                "status": "error",
+                "response": "Internal server error during execution.",
+                "reasoning": instance.last_reasoning if instance else ""
+            }
         finally:
             heartbeat_task.cancel()
             db.close()
 
     @staticmethod
     def _compress_reasoning(text: str) -> str:
-        """Deduplicates consecutive identical turn markers and boilerplate strategies."""
+        """Deduplicates turn markers and aggressively collapses boilerplate."""
         import re
-        # 1. Deduplicate consecutive turn headers that have no content between them
-        # (e.g. Turn 1 followed immediately by Turn 2)
-        turn_pattern = r"(\n\n---\n🛰️ \*\*\[Turn \d+\] thinking\.\.\.\*\*\n\n)(?=\n\n---\n🛰️ \*\*\[Turn \d+\] thinking\.\.\.\*\*\n\n)"
+        if not text: return ""
+
+        # Remove consecutive 'Strategy' boilerplate and turn headers
+        # Use a non-greedy approach to collapse blocks of redundant turn signaling
+        boilerplate = r"Strategy:\s*Executing\s*orchestrated\s*tasks\s*in\s*progress\.*"
+        
+        # 1. Deduplicate consecutive turn headers (e.g. Turn 1 followed by Turn 2)
+        turn_pattern = r"(?s)(\n\n---\n🛰️ \*\*\[Turn \d+\] thinking\.\.\.\*\*\n\n)(?=\n\n---\n🛰️ \*\*\[Turn \d+\] thinking\.\.\.\*\*\n\n)"
         text = re.sub(turn_pattern, "", text)
         
-        # 2. Deduplicate consecutive identical 'Strategy:' boilerplate
-        strategy_pattern = r"(Strategy: Executing orchestrated tasks in progress\.\.\.\n?)(?=\s*Strategy: Executing orchestrated tasks in progress\.\.\.)"
-        text = re.sub(strategy_pattern, "", text)
+        # 2. Collapse sequences of Turn + Boilerplate Strategy (common during autonomous waits)
+        # Keeps only the last one in a sequence of turns that did nothing.
+        text = re.sub(rf"(?s)(\n\n---\n🛰️ \*\*\[Turn \d+\] thinking\.\.\.\*\*\n\n{boilerplate}\n?)+", 
+                      r"\1", text)
+        
+        # 3. Final cleanup of repeating Strategy chunks that might have survived
+        text = re.sub(rf"({boilerplate}\s*)+", r"Strategy: Executing orchestrated tasks in progress...\n", text)
         
         return text.strip()
+