diff --git a/agent-node/agent_node/config.py b/agent-node/agent_node/config.py
index ba29271..ad9eeba 100644
--- a/agent-node/agent_node/config.py
+++ b/agent-node/agent_node/config.py
@@ -14,7 +14,7 @@
     "auth_token": os.getenv("AGENT_AUTH_TOKEN", "cortex-secret-shared-key"),
     "sync_root": "/tmp/cortex-sync",
     "tls": True,
-    "max_skill_workers": 5,
+    "max_skill_workers": 10,
     "health_report_interval": 10,
 }
 
diff --git a/agent-node/agent_node/node.py b/agent-node/agent_node/node.py
index f061dd0..90d08fc 100644
--- a/agent-node/agent_node/node.py
+++ b/agent-node/agent_node/node.py
@@ -549,6 +549,14 @@
         success, reason = self.skills.submit(task, self.sandbox, self._on_finish, self._on_event)
         if not success:
             print(f"[!] Execution Rejected: {reason}", flush=True)
+            self._send_response(
+                task.task_id,
+                agent_pb2.TaskResponse(
+                    task_id=task.task_id,
+                    status=agent_pb2.TaskResponse.ERROR,
+                    stderr=f"[NODE] Execution Rejected: {reason}",
+                )
+            )
 
     def _on_event(self, event):
         """Live Event Tunneler: Routes browser/skill events into the main stream."""
diff --git a/ai-hub/app/core/services/sub_agent.py b/ai-hub/app/core/services/sub_agent.py
index 1abbf43..8343e2f 100644
--- a/ai-hub/app/core/services/sub_agent.py
+++ b/ai-hub/app/core/services/sub_agent.py
@@ -35,12 +35,14 @@
                 if isinstance(self.result, dict) and self.result.get("error"):
                     err_msg = str(self.result.get("error")).lower()
                     # Only retry on potentially transient network/node issues
-                    if any(x in err_msg for x in ["timeout", "offline", "disconnected"]):
+                    if any(x in err_msg for x in ["timeout", "offline", "disconnected", "capacity", "rejected"]):
                         if attempt < self.retries:
-                            self.status = f"RETRYING ({attempt+1}/{self.retries})"
-                            logger.info(f"[SubAgent] {self.name} retrying due to: {err_msg}")
-                            await asyncio.sleep(2)
+                            backoff = (attempt + 1) * 3 # Incremental backoff: 3s, 6s
+                            self.status = f"RETRYING ({attempt+1}/{self.retries}) - {err_msg}"
+                            logger.info(f"[SubAgent] {self.name} retrying due to: {err_msg}. Backoff={backoff}s")
+                            await asyncio.sleep(backoff)
                             continue
+
                 
                 self.status = "COMPLETED"
                 break