diff --git a/src/main/ipc/pty.test.ts b/src/main/ipc/pty.test.ts
index a4ff2845b32..b04550084cc 100644
--- a/src/main/ipc/pty.test.ts
+++ b/src/main/ipc/pty.test.ts
@@ -18,8 +18,8 @@ import { PtyWriteUnavailableError } from '../providers/pty-write-unavailable-err
 const isWindowsHost = process.platform === 'win32'
 const posixOnlyIt = isWindowsHost ? it.skip : it
 const expectedOmpStatusExtension = posix.join(
-  '/tmp/orca-user-data',
-  'omp-managed-status-extension',
+  '/tmp/default-omp-agent',
+  'extensions',
   'orca-agent-status.ts'
 )
 function expectedAttributionShimDir(): string {
@@ -413,31 +413,15 @@ describe('registerPtyHandlers', () => {
       ORCA_AGENT_HOOK_TOKEN: 'agent-token'
     })
     piBuildPtyEnvMock.mockImplementation(
-      (
-        _ptyId: string,
-        existingAgentDir?: string,
-        kind?: string,
-        options?: { materializeDefaultHome?: boolean }
-      ) => {
-        if (kind === 'omp') {
-          if (!existingAgentDir && options?.materializeDefaultHome === false) {
-            return {
-              ORCA_OMP_STATUS_EXTENSION:
-                '/tmp/orca-user-data/omp-managed-status-extension/orca-agent-status.ts'
+      (_ptyId: string, existingAgentDir?: string, kind?: string) =>
+        kind === 'omp'
+          ? {
+              ORCA_OMP_SOURCE_AGENT_DIR: existingAgentDir ?? '/tmp/default-omp-agent',
+              ORCA_OMP_STATUS_EXTENSION: `${existingAgentDir ?? '/tmp/default-omp-agent'}/extensions/orca-agent-status.ts`
+            }
+          : {
+              ORCA_PI_SOURCE_AGENT_DIR: existingAgentDir ?? '/tmp/default-pi-agent'
             }
-          }
-          return {
-            ORCA_OMP_SOURCE_AGENT_DIR: existingAgentDir ?? '/tmp/default-omp-agent',
-            ORCA_OMP_STATUS_EXTENSION: `${existingAgentDir ?? '/tmp/default-omp-agent'}/extensions/orca-agent-status.ts`
-          }
-        }
-        if (!existingAgentDir && options?.materializeDefaultHome === false) {
-          return {}
-        }
-        return {
-          ORCA_PI_SOURCE_AGENT_DIR: existingAgentDir ?? '/tmp/default-pi-agent'
-        }
-      }
     )
     isPwshAvailableMock.mockReturnValue(false)
     spawnMock.mockReturnValue({
@@ -2440,21 +2424,15 @@ describe('registerPtyHandlers', () => {
 
     it('installs Pi managed extensions without redirecting Orca terminal PTY homes', async () => {
       const env = await spawnAndGetEnv(undefined, { PI_CODING_AGENT_DIR: '/tmp/user-pi-agent' })
-      expect(piBuildPtyEnvMock).toHaveBeenCalledWith(
-        expect.any(String),
-        '/tmp/user-pi-agent',
-        'pi',
-        { materializeDefaultHome: false }
-      )
-      expect(piBuildPtyEnvMock).toHaveBeenCalledWith(expect.any(String), undefined, 'omp', {
-        materializeDefaultHome: false
-      })
+      expect(piBuildPtyEnvMock).toHaveBeenCalledWith(expect.any(String), '/tmp/user-pi-agent', 'pi')
+      expect(piBuildPtyEnvMock).toHaveBeenCalledWith(expect.any(String), undefined, 'omp')
       expect(env.PI_CODING_AGENT_DIR).toBe('/tmp/user-pi-agent')
       expect(env.ORCA_PI_CODING_AGENT_DIR).toBeUndefined()
       expect(env.ORCA_PI_SOURCE_AGENT_DIR).toBe('/tmp/user-pi-agent')
       expect(env.ORCA_OMP_CODING_AGENT_DIR).toBeUndefined()
-      expect(env.ORCA_OMP_STATUS_EXTENSION).toBe(expectedOmpStatusExtension)
-      expect(env.ORCA_OMP_SOURCE_AGENT_DIR).toBeUndefined()
+      expect(env.ORCA_OMP_STATUS_EXTENSION).toBe(
+        '/tmp/default-omp-agent/extensions/orca-agent-status.ts'
+      )
     })
 
     it('threads command: "omp" through to piBuildPtyEnv and emits OMP status metadata', async () => {
@@ -2469,8 +2447,7 @@ describe('registerPtyHandlers', () => {
       expect(piBuildPtyEnvMock).toHaveBeenCalledWith(
         expect.any(String),
         '/tmp/user-omp-agent',
-        'omp',
-        { materializeDefaultHome: true }
+        'omp'
       )
       expect(env.PI_CODING_AGENT_DIR).toBe('/tmp/user-omp-agent')
       expect(env.ORCA_OMP_CODING_AGENT_DIR).toBeUndefined()
@@ -2498,8 +2475,7 @@ describe('registerPtyHandlers', () => {
       expect(piBuildPtyEnvMock).toHaveBeenCalledWith(
         expect.any(String),
         '/tmp/user-omp-agent',
-        'omp',
-        { materializeDefaultHome: true }
+        'omp'
       )
       expect(env.ORCA_OMP_STATUS_EXTENSION).toBe(
         '/tmp/user-omp-agent/extensions/orca-agent-status.ts'
@@ -2512,12 +2488,7 @@ describe('registerPtyHandlers', () => {
         PI_CODING_AGENT_DIR: '/tmp/parent-orca-pi-overlay',
         ORCA_PI_SOURCE_AGENT_DIR: '/tmp/user-pi-agent'
       })
-      expect(piBuildPtyEnvMock).toHaveBeenCalledWith(
-        expect.any(String),
-        '/tmp/user-pi-agent',
-        'pi',
-        { materializeDefaultHome: false }
-      )
+      expect(piBuildPtyEnvMock).toHaveBeenCalledWith(expect.any(String), '/tmp/user-pi-agent', 'pi')
       expect(env.PI_CODING_AGENT_DIR).toBe('/tmp/parent-orca-pi-overlay')
       expect(env.ORCA_PI_CODING_AGENT_DIR).toBeUndefined()
       expect(env.ORCA_PI_SOURCE_AGENT_DIR).toBe('/tmp/user-pi-agent')
@@ -2536,9 +2507,7 @@ describe('registerPtyHandlers', () => {
         'omp'
       )
 
-      expect(piBuildPtyEnvMock).toHaveBeenCalledWith(expect.any(String), undefined, 'omp', {
-        materializeDefaultHome: true
-      })
+      expect(piBuildPtyEnvMock).toHaveBeenCalledWith(expect.any(String), undefined, 'omp')
       expect(env.ORCA_OMP_CODING_AGENT_DIR).toBeUndefined()
       expect(env.ORCA_OMP_SOURCE_AGENT_DIR).toBe('/tmp/default-omp-agent')
       expect(env.ORCA_PI_CODING_AGENT_DIR).toBeUndefined()
@@ -2558,9 +2527,7 @@ describe('registerPtyHandlers', () => {
         'pi'
       )
 
-      expect(piBuildPtyEnvMock).toHaveBeenCalledWith(expect.any(String), undefined, 'pi', {
-        materializeDefaultHome: true
-      })
+      expect(piBuildPtyEnvMock).toHaveBeenCalledWith(expect.any(String), undefined, 'pi')
       expect(env.ORCA_PI_CODING_AGENT_DIR).toBeUndefined()
       expect(env.ORCA_PI_SOURCE_AGENT_DIR).toBe('/tmp/default-pi-agent')
       expect(env.ORCA_OMP_CODING_AGENT_DIR).toBeUndefined()
@@ -2602,8 +2569,7 @@ describe('registerPtyHandlers', () => {
         expect(piBuildPtyEnvMock).toHaveBeenCalledWith(
           expect.any(String),
           '/home/tester/.config/pi-agent',
-          'pi',
-          { materializeDefaultHome: false }
+          'pi'
         )
         expect(env.PI_CODING_AGENT_DIR).toBeUndefined()
         expect(env.ORCA_PI_CODING_AGENT_DIR).toBeUndefined()
@@ -3005,15 +2971,8 @@ describe('registerPtyHandlers', () => {
 
       it('installs Pi managed extensions without redirecting homes on the daemon path', async () => {
         const env = await daemonSpawnAndGetEnv({ PI_CODING_AGENT_DIR: '/user/.pi/agent' })
-        expect(piBuildPtyEnvMock).toHaveBeenCalledWith(
-          expect.any(String),
-          '/user/.pi/agent',
-          'pi',
-          { materializeDefaultHome: false }
-        )
-        expect(piBuildPtyEnvMock).toHaveBeenCalledWith(expect.any(String), undefined, 'omp', {
-          materializeDefaultHome: false
-        })
+        expect(piBuildPtyEnvMock).toHaveBeenCalledWith(expect.any(String), '/user/.pi/agent', 'pi')
+        expect(piBuildPtyEnvMock).toHaveBeenCalledWith(expect.any(String), undefined, 'omp')
         expect(env.PI_CODING_AGENT_DIR).toBe('/user/.pi/agent')
         expect(env.ORCA_PI_CODING_AGENT_DIR).toBeUndefined()
         expect(env.ORCA_PI_SOURCE_AGENT_DIR).toBe('/user/.pi/agent')
@@ -3033,8 +2992,7 @@ describe('registerPtyHandlers', () => {
         expect(piBuildPtyEnvMock).toHaveBeenCalledWith(
           expect.any(String),
           '/user/.omp/agent',
-          'omp',
-          { materializeDefaultHome: true }
+          'omp'
         )
         expect(env.PI_CODING_AGENT_DIR).toBe('/user/.omp/agent')
         expect(env.ORCA_OMP_CODING_AGENT_DIR).toBeUndefined()
@@ -3061,8 +3019,7 @@ describe('registerPtyHandlers', () => {
         expect(piBuildPtyEnvMock).toHaveBeenCalledWith(
           expect.any(String),
           '/user/.omp/agent',
-          'omp',
-          { materializeDefaultHome: true }
+          'omp'
         )
         expect(env.ORCA_OMP_STATUS_EXTENSION).toBe(
           '/user/.omp/agent/extensions/orca-agent-status.ts'
@@ -4003,9 +3960,7 @@ describe('registerPtyHandlers', () => {
         expect(sessionId).toEqual(expect.any(String))
         expect((sessionId ?? '').length).toBeGreaterThan(0)
         expect(spawnOpts.isNewSession).toBe(true)
-        expect(piBuildPtyEnvMock).toHaveBeenCalledWith(sessionId, undefined, 'pi', {
-          materializeDefaultHome: false
-        })
+        expect(piBuildPtyEnvMock).toHaveBeenCalledWith(sessionId, undefined, 'pi')
       })
 
       it('respects a caller-provided sessionId instead of minting a new one', async () => {
@@ -4020,9 +3975,7 @@ describe('registerPtyHandlers', () => {
         })
         expect(daemonSpawn.mock.calls.at(-1)![0].sessionId).toBe('user-session-42')
         expect(daemonSpawn.mock.calls.at(-1)![0].isNewSession).toBeUndefined()
-        expect(piBuildPtyEnvMock).toHaveBeenCalledWith('user-session-42', undefined, 'pi', {
-          materializeDefaultHome: false
-        })
+        expect(piBuildPtyEnvMock).toHaveBeenCalledWith('user-session-42', undefined, 'pi')
       })
 
       it('prefixes a minted sessionId with the worktreeId when provided', async () => {
@@ -4038,9 +3991,7 @@ describe('registerPtyHandlers', () => {
         })
         const sessionId = daemonSpawn.mock.calls.at(-1)![0].sessionId ?? ''
         expect(sessionId).toMatch(/^wt-alpha@@[0-9a-f]{8}$/)
-        expect(piBuildPtyEnvMock).toHaveBeenCalledWith(sessionId, undefined, 'pi', {
-          materializeDefaultHome: false
-        })
+        expect(piBuildPtyEnvMock).toHaveBeenCalledWith(sessionId, undefined, 'pi')
       })
 
       it('reuses one attach-style daemon session for fresh-agent operation retries', async () => {
@@ -4119,8 +4070,7 @@ describe('registerPtyHandlers', () => {
         expect(piBuildPtyEnvMock).toHaveBeenCalledWith(
           expect.any(String),
           '/ambient/pi/agent',
-          'pi',
-          { materializeDefaultHome: false }
+          'pi'
         )
         expect(env.PI_CODING_AGENT_DIR).toBeUndefined()
         expect(env.ORCA_PI_CODING_AGENT_DIR).toBeUndefined()
@@ -8906,13 +8856,11 @@ describe('registerPtyHandlers', () => {
         'ORCA_CLI_COMMAND/u',
         'ORCA_AGENT_HOOK_PORT/u',
         'ORCA_AGENT_HOOK_TOKEN/u',
+        'ORCA_OMP_SOURCE_AGENT_DIR/p',
         'ORCA_OMP_STATUS_EXTENSION/p',
         'POWERLEVEL9K_DISABLE_CONFIGURATION_WIZARD'
       ])
     )
-    expect(env.WSLENV?.split(':')).not.toEqual(
-      expect.arrayContaining(['ORCA_OMP_SOURCE_AGENT_DIR/p'])
-    )
   })
 
   it('forces managed ORCA_USER_DATA_PATH for WSL spawns even when the caller provides a stale root', async () => {
diff --git a/src/main/ipc/pty.ts b/src/main/ipc/pty.ts
index fdaa2c69f37..3d3c4811747 100644
--- a/src/main/ipc/pty.ts
+++ b/src/main/ipc/pty.ts
@@ -1166,17 +1166,13 @@ export function buildPtyHostEnv(
     clearPiAgentShadowEnv(baseEnv, 'pi')
     clearPiAgentShadowEnv(baseEnv, 'omp')
     if (piAgentKind === 'pi') {
-      const piEnv = piTitlebarExtensionService.buildPtyEnv(id, preexistingPiAgentDir, 'pi', {
-        materializeDefaultHome: hasLaunchCommand
-      })
+      const piEnv = piTitlebarExtensionService.buildPtyEnv(id, preexistingPiAgentDir, 'pi')
       Object.assign(baseEnv, piEnv)
       exposePiManagedExtensionEnv(baseEnv, 'pi', piEnv)
     }
 
     if (shouldPrepareOmpShadow) {
-      const ompEnv = piTitlebarExtensionService.buildPtyEnv(id, preexistingOmpAgentDir, 'omp', {
-        materializeDefaultHome: piAgentKind === 'omp'
-      })
+      const ompEnv = piTitlebarExtensionService.buildPtyEnv(id, preexistingOmpAgentDir, 'omp')
       Object.assign(baseEnv, ompEnv)
       exposePiManagedExtensionEnv(baseEnv, 'omp', ompEnv)
     }
diff --git a/src/main/pi/titlebar-extension-service.test.ts b/src/main/pi/titlebar-extension-service.test.ts
index 43af655aa1f..7516f04dad9 100644
--- a/src/main/pi/titlebar-extension-service.test.ts
+++ b/src/main/pi/titlebar-extension-service.test.ts
@@ -643,35 +643,6 @@ describe('PiTitlebarExtensionService', () => {
         rmSync(fakeHome, { recursive: true, force: true })
       }
     })
-
-    it('bare-shell prep does not create missing ~/.pi or ~/.omp homes (#10196)', () => {
-      const fakeHome = mkdtempSync(join(tmpdir(), 'orca-no-eager-agent-home-'))
-      expect(existsSync(join(fakeHome, '.pi'))).toBe(false)
-      expect(existsSync(join(fakeHome, '.omp'))).toBe(false)
-
-      homedirOverride.current = fakeHome
-      try {
-        const svc = new PiTitlebarExtensionService()
-        const piEnv = svc.buildPtyEnv('pty-bare-pi', undefined, 'pi', {
-          materializeDefaultHome: false
-        })
-        const ompEnv = svc.buildPtyEnv('pty-bare-omp', undefined, 'omp', {
-          materializeDefaultHome: false
-        })
-
-        expect(piEnv).toEqual({})
-        expect(existsSync(join(fakeHome, '.pi'))).toBe(false)
-        expect(existsSync(join(fakeHome, '.omp'))).toBe(false)
-        expect(ompEnv.ORCA_OMP_SOURCE_AGENT_DIR).toBeUndefined()
-        expect(ompEnv.ORCA_OMP_STATUS_EXTENSION).toEqual(
-          expect.stringContaining('omp-managed-status-extension')
-        )
-        expect(existsSync(ompEnv.ORCA_OMP_STATUS_EXTENSION!)).toBe(true)
-      } finally {
-        homedirOverride.current = ''
-        rmSync(fakeHome, { recursive: true, force: true })
-      }
-    })
   })
 
   describe('isSafeDescendCandidate (Windows junction regression guard)', () => {
diff --git a/src/main/pi/titlebar-extension-service.ts b/src/main/pi/titlebar-extension-service.ts
index 4012e219c26..37d030b5e31 100644
--- a/src/main/pi/titlebar-extension-service.ts
+++ b/src/main/pi/titlebar-extension-service.ts
@@ -169,8 +169,7 @@ export class PiTitlebarExtensionService {
   buildPtyEnv(
     ptyId: string,
     existingAgentDir: string | undefined,
-    kind: PiAgentKind,
-    options?: { materializeDefaultHome?: boolean }
+    kind: PiAgentKind
   ): Record<string, string> {
     const sourceAgentDir = existingAgentDir || getDefaultPiAgentDir(kind)
     try {
@@ -181,15 +180,6 @@ export class PiTitlebarExtensionService {
       // directory should not prevent the terminal from starting.
     }
 
-    if (!existsSync(sourceAgentDir) && options?.materializeDefaultHome === false) {
-      if (kind === 'omp') {
-        const statusSource = withOrcaManagedExtensionMarker(getPiAgentStatusExtensionSource(kind))
-        const statusExtensionPath = this.writeOmpFallbackStatusExtension(statusSource)
-        return statusExtensionPath ? { ORCA_OMP_STATUS_EXTENSION: statusExtensionPath } : {}
-      }
-      return {}
-    }
-
     if (kind === 'omp') {
       migrateLegacyOmpOverlayState(sourceAgentDir, this.getSourceOverlayDir(sourceAgentDir, 'omp'))
     }
diff --git a/src/relay/plugin-overlay.test.ts b/src/relay/plugin-overlay.test.ts
index 8ebec60aed2..9b90692cd28 100644
--- a/src/relay/plugin-overlay.test.ts
+++ b/src/relay/plugin-overlay.test.ts
@@ -72,10 +72,9 @@ describe('PluginOverlayManager', () => {
 
   it('installs Pi extension into the real agent extensions dir', () => {
     manager.setSources({ piExtensionSource: '// pi extension' })
-    const result = manager.materializePi('tab-2:0')
-    expect(result?.sourceAgentDir).toBeDefined()
-    const file = join(result!.sourceAgentDir!, 'extensions', 'orca-agent-status.ts')
-    expect(result?.statusExtensionPath).toBe(file)
+    const dir = manager.materializePi('tab-2:0')
+    expect(dir).not.toBeNull()
+    const file = join(dir!, 'extensions', 'orca-agent-status.ts')
     expect(existsSync(file)).toBe(true)
     expect(readFileSync(file, 'utf8')).toContain('@orca-managed-pi-extension')
   })
@@ -97,17 +96,17 @@ describe('PluginOverlayManager', () => {
       ompExtensionSource: '// omp extension'
     })
 
-    const piResult = manager.materializePi('tab-kind-pi:0', undefined, 'pi')
-    const ompResult = manager.materializePi('tab-kind-omp:0', undefined, 'omp')
+    const piDir = manager.materializePi('tab-kind-pi:0', undefined, 'pi')
+    const ompDir = manager.materializePi('tab-kind-omp:0', undefined, 'omp')
 
-    expect(piResult?.sourceAgentDir).toBeDefined()
-    expect(ompResult?.sourceAgentDir).toBeDefined()
-    expect(
-      readFileSync(join(piResult!.sourceAgentDir!, 'extensions', 'orca-agent-status.ts'), 'utf8')
-    ).toContain('// pi extension')
-    expect(
-      readFileSync(join(ompResult!.sourceAgentDir!, 'extensions', 'orca-agent-status.ts'), 'utf8')
-    ).toContain('// omp extension')
+    expect(piDir).not.toBeNull()
+    expect(ompDir).not.toBeNull()
+    expect(readFileSync(join(piDir!, 'extensions', 'orca-agent-status.ts'), 'utf8')).toContain(
+      '// pi extension'
+    )
+    expect(readFileSync(join(ompDir!, 'extensions', 'orca-agent-status.ts'), 'utf8')).toContain(
+      '// omp extension'
+    )
   })
 
   it('installs Orca status extension into the remote default Pi agent dir', () => {
@@ -130,10 +129,9 @@ describe('PluginOverlayManager', () => {
     )
 
     manager.setSources({ piExtensionSource: '// pi extension' })
-    const result = manager.materializePi('tab-pi:0')
-    const dir = result?.sourceAgentDir
+    const dir = manager.materializePi('tab-pi:0')
 
-    expect(dir).toBeDefined()
+    expect(dir).not.toBeNull()
     expect(readFileSync(join(dir!, 'auth.json'), 'utf8')).toBe('secret token')
     expect(readFileSync(join(dir!, 'skills', 'my-skill', 'SKILL.md'), 'utf8')).toBe(
       'critical user skill'
@@ -173,10 +171,9 @@ describe('PluginOverlayManager', () => {
     writeFileSync(join(customAgentDir, 'extensions', 'custom.ts'), 'custom extension')
 
     manager.setSources({ piExtensionSource: '// pi extension' })
-    const result = manager.materializePi('tab-custom-pi:0', customAgentDir)
-    const dir = result?.sourceAgentDir
+    const dir = manager.materializePi('tab-custom-pi:0', customAgentDir)
 
-    expect(dir).toBeDefined()
+    expect(dir).not.toBeNull()
     expect(readFileSync(join(dir!, 'auth.json'), 'utf8')).toBe('custom token')
     expect(readFileSync(join(dir!, 'extensions', 'custom.ts'), 'utf8')).toBe('custom extension')
     expect(readFileSync(join(dir!, 'extensions', 'orca-agent-status.ts'), 'utf8')).toContain(
@@ -187,9 +184,10 @@ describe('PluginOverlayManager', () => {
   it('leaves lazy OMP agent.db in the real remote home on the relay', () => {
     manager.setSources({ piExtensionSource: '// pi extension' })
     const sourceDir = join(homeDir, '.omp', 'agent')
-    const first = manager.materializePi('tab-relay-omp-sqlite:0', undefined, 'omp')
+    const firstDir = manager.materializePi('tab-relay-omp-sqlite:0', undefined, 'omp')
 
-    expect(first?.sourceAgentDir).toBe(sourceDir)
+    expect(firstDir).not.toBeNull()
+    expect(firstDir).toBe(sourceDir)
     const sourcePath = join(sourceDir, 'agent.db')
     const content = 'agent.db relay credentials'
 
@@ -200,10 +198,10 @@ describe('PluginOverlayManager', () => {
 
     expect(readFileSync(sourcePath, 'utf8')).toBe(content)
 
-    const second = manager.materializePi('tab-relay-omp-sqlite:0', undefined, 'omp')
+    const secondDir = manager.materializePi('tab-relay-omp-sqlite:0', undefined, 'omp')
 
-    expect(second?.sourceAgentDir).toBe(first?.sourceAgentDir)
-    expect(readFileSync(join(second!.sourceAgentDir!, 'agent.db'), 'utf8')).toBe(content)
+    expect(secondDir).toBe(firstDir)
+    expect(readFileSync(join(secondDir!, 'agent.db'), 'utf8')).toBe(content)
   })
 
   // Why: per-agent source dir. The renderer picks Pi or OMP per
@@ -224,9 +222,9 @@ describe('PluginOverlayManager', () => {
       seedAgentDir('.omp', 'omp')
 
       manager.setSources({ piExtensionSource: '// pi extension' })
-      const result = manager.materializePi('tab-relay-pi-both:0', undefined, 'pi')
-      const dir = result?.sourceAgentDir
+      const dir = manager.materializePi('tab-relay-pi-both:0', undefined, 'pi')
 
+      expect(dir).not.toBeNull()
       expect(dir).toBe(join(homeDir, '.pi', 'agent'))
       expect(readFileSync(join(dir!, 'auth.json'), 'utf8')).toBe('pi token')
       const extensions = readdirSync(join(dir!, 'extensions')).sort()
@@ -240,9 +238,9 @@ describe('PluginOverlayManager', () => {
       seedAgentDir('.omp', 'omp')
 
       manager.setSources({ piExtensionSource: '// pi extension' })
-      const result = manager.materializePi('tab-relay-omp-both:0', undefined, 'omp')
-      const dir = result?.sourceAgentDir
+      const dir = manager.materializePi('tab-relay-omp-both:0', undefined, 'omp')
 
+      expect(dir).not.toBeNull()
       expect(dir).toBe(join(homeDir, '.omp', 'agent'))
       // Even though ~/.pi/agent exists, the OMP launch MUST mirror OMP's
       // source dir. Cross-agent fallback would silently shadow the user's
@@ -261,41 +259,15 @@ describe('PluginOverlayManager', () => {
       expect(existsSync(join(homeDir, '.omp'))).toBe(false)
 
       manager.setSources({ piExtensionSource: '// pi extension' })
-      const result = manager.materializePi('tab-relay-omp-empty:0', undefined, 'omp')
-      const dir = result?.sourceAgentDir
+      const dir = manager.materializePi('tab-relay-omp-empty:0', undefined, 'omp')
 
+      expect(dir).not.toBeNull()
       expect(dir).toBe(join(homeDir, '.omp', 'agent'))
       // Pi-only home must NOT leak into the OMP home.
       expect(existsSync(join(dir!, 'auth.json'))).toBe(false)
       const extensions = readdirSync(join(dir!, 'extensions')).sort()
       expect(extensions).toEqual(['orca-agent-status.ts'])
     })
-
-    it('bare-shell prep does not create missing remote agent homes (#10196)', () => {
-      expect(existsSync(join(homeDir, '.pi'))).toBe(false)
-      expect(existsSync(join(homeDir, '.omp'))).toBe(false)
-      manager.setSources({
-        piExtensionSource: '// pi extension',
-        ompExtensionSource: '// omp extension'
-      })
-
-      expect(
-        manager.materializePi('tab-bare-pi:0', undefined, 'pi', {
-          materializeDefaultHome: false
-        })
-      ).toBeNull()
-      const bareOmp = manager.materializePi('tab-bare-omp:0', undefined, 'omp', {
-        materializeDefaultHome: false
-      })
-      expect(bareOmp?.sourceAgentDir).toBeUndefined()
-      expect(bareOmp?.statusExtensionPath).toEqual(
-        expect.stringContaining(join('.orca-relay', 'omp-managed-status-extension'))
-      )
-      expect(existsSync(bareOmp!.statusExtensionPath!)).toBe(true)
-      expect(readFileSync(bareOmp!.statusExtensionPath!, 'utf8')).toContain('// omp extension')
-      expect(existsSync(join(homeDir, '.pi'))).toBe(false)
-      expect(existsSync(join(homeDir, '.omp'))).toBe(false)
-    })
   })
 
   it('does not override a missing preexisting Pi agent dir', () => {
@@ -311,8 +283,8 @@ describe('PluginOverlayManager', () => {
       ompExtensionSource: 'omp'
     })
     const opencodeDir = manager.materializeOpenCode('tab-3:0')!
-    const piDir = manager.materializePi('tab-3:0', undefined, 'pi')!.sourceAgentDir!
-    const ompDir = manager.materializePi('tab-3:0', undefined, 'omp')!.sourceAgentDir!
+    const piDir = manager.materializePi('tab-3:0', undefined, 'pi')!
+    const ompDir = manager.materializePi('tab-3:0', undefined, 'omp')!
     expect(piDir).not.toBe(ompDir)
     expect(existsSync(opencodeDir)).toBe(true)
     expect(existsSync(piDir)).toBe(true)
diff --git a/src/relay/plugin-overlay.ts b/src/relay/plugin-overlay.ts
index 49e2799e5ed..ada88830bda 100644
--- a/src/relay/plugin-overlay.ts
+++ b/src/relay/plugin-overlay.ts
@@ -41,7 +41,6 @@ const PI_OVERLAY_SUBDIR_BY_KIND: Record<PiAgentKind, string> = {
 const OPENCODE_PLUGIN_FILE = 'orca-opencode-status.js'
 const PI_EXTENSION_FILE = 'orca-agent-status.ts'
 const PI_AGENT_SUBDIR = 'agent'
-const OMP_MANAGED_STATUS_EXTENSION_DIR = 'omp-managed-status-extension'
 const ORCA_MANAGED_EXTENSION_MARKER = '@orca-managed-pi-extension'
 
 function withOrcaManagedPiExtensionMarker(source: string): string {
@@ -80,9 +79,8 @@ export type PluginSources = {
   ompExtensionSource?: string
 }
 
-export type MaterializePiResult = {
-  sourceAgentDir?: string
-  statusExtensionPath?: string
+export function getRelayPiStatusExtensionPath(agentDir: string): string {
+  return join(agentDir, 'extensions', PI_EXTENSION_FILE)
 }
 
 /** Presence of this file is what makes an overlay usable — a rebuild that failed
@@ -238,30 +236,10 @@ export class PluginOverlayManager {
     }
   }
 
-  private writeOmpManagedStatusExtension(extensionSource: string): string | null {
-    const fallbackDir = join(this.homeDir, RELAY_HOOKS_DIR, OMP_MANAGED_STATUS_EXTENSION_DIR)
-    try {
-      mkdirSync(fallbackDir, { recursive: true })
-      const fallbackPath = join(fallbackDir, PI_EXTENSION_FILE)
-      if (!this.canOverwritePiExtension(fallbackPath)) {
-        return null
-      }
-      writeFileSync(fallbackPath, extensionSource)
-      return fallbackPath
-    } catch (err) {
-      process.stderr.write(
-        `[plugin-overlay] failed to write OMP managed status extension: ${err instanceof Error ? err.message : String(err)}\n`
-      )
-      return null
-    }
-  }
-
-  materializePi(
-    id: string,
-    existingAgentDir?: string,
-    kind: PiAgentKind = 'pi',
-    options?: { materializeDefaultHome?: boolean }
-  ): MaterializePiResult | null {
+  /** Install the Pi/OMP status extension into the remote real agent dir and
+   *  return that directory. `kind` selects which Pi-compatible agent's default
+   *  dir to use when `existingAgentDir` is not supplied. */
+  materializePi(id: string, existingAgentDir?: string, kind: PiAgentKind = 'pi'): string | null {
     const extensionSource = this.getPiExtensionSource(kind)
     if (!extensionSource || !isUsableId(id)) {
       return null
@@ -271,17 +249,6 @@ export class PluginOverlayManager {
       if (existingAgentDir && !existsSync(existingAgentDir)) {
         return null
       }
-      if (
-        !existingAgentDir &&
-        !existsSync(sourceAgentDir) &&
-        options?.materializeDefaultHome === false
-      ) {
-        if (kind === 'omp') {
-          const statusExtensionPath = this.writeOmpManagedStatusExtension(extensionSource)
-          return statusExtensionPath ? { statusExtensionPath } : null
-        }
-        return null
-      }
       const extensionsDir = join(sourceAgentDir, 'extensions')
       mkdirSync(extensionsDir, { recursive: true })
       const extensionPath = join(extensionsDir, PI_EXTENSION_FILE)
@@ -289,10 +256,7 @@ export class PluginOverlayManager {
         return null
       }
       writeFileSync(extensionPath, extensionSource)
-      return {
-        sourceAgentDir,
-        statusExtensionPath: extensionPath
-      }
+      return sourceAgentDir
     } catch (err) {
       process.stderr.write(
         `[plugin-overlay] failed to install ${kind} extension: ${err instanceof Error ? err.message : String(err)}\n`
diff --git a/src/relay/relay.ts b/src/relay/relay.ts
index 716641b2dc0..6daf87b309c 100644
--- a/src/relay/relay.ts
+++ b/src/relay/relay.ts
@@ -33,7 +33,7 @@ import { PortScanHandler } from './port-scan-handler'
 import { AgentExecHandler } from './agent-exec-handler'
 import { WorkspaceSessionHandler } from './workspace-session-handler'
 import { endpointDirForRelaySocket, RelayAgentHookServer } from './agent-hook-server'
-import { PluginOverlayManager } from './plugin-overlay'
+import { PluginOverlayManager, getRelayPiStatusExtensionPath } from './plugin-overlay'
 import {
   AGENT_HOOK_INSTALL_PLUGINS_METHOD,
   AGENT_HOOK_NOTIFICATION_METHOD,
@@ -585,11 +585,9 @@ async function main(): Promise<void> {
       const shouldPrepareOmpShadow = kind === 'omp' || !hasLaunchCommand
       if (kind === 'pi') {
         const sourceDir = resolvePiSourceAgentDir(ctx.env, ctx.shell, 'pi')
-        const result = pluginOverlay.materializePi(overlayId, sourceDir, 'pi', {
-          materializeDefaultHome: hasLaunchCommand
-        })
-        if (result?.sourceAgentDir) {
-          env.ORCA_PI_SOURCE_AGENT_DIR = result.sourceAgentDir
+        const dir = pluginOverlay.materializePi(overlayId, sourceDir, 'pi')
+        if (dir) {
+          env.ORCA_PI_SOURCE_AGENT_DIR = dir
         }
       }
       if (shouldPrepareOmpShadow) {
@@ -598,14 +596,10 @@ async function main(): Promise<void> {
           kind === 'omp'
             ? resolvePiSourceAgentDir(ctx.env, ctx.shell, 'omp')
             : ctx.env.ORCA_OMP_SOURCE_AGENT_DIR
-        const result = pluginOverlay.materializePi(overlayId, sourceDir, 'omp', {
-          materializeDefaultHome: kind === 'omp'
-        })
-        if (result?.statusExtensionPath) {
-          env.ORCA_OMP_STATUS_EXTENSION = result.statusExtensionPath
-        }
-        if (result?.sourceAgentDir) {
-          env.ORCA_OMP_SOURCE_AGENT_DIR = result.sourceAgentDir
+        const dir = pluginOverlay.materializePi(overlayId, sourceDir, 'omp')
+        if (dir) {
+          env.ORCA_OMP_STATUS_EXTENSION = getRelayPiStatusExtensionPath(dir)
+          env.ORCA_OMP_SOURCE_AGENT_DIR = dir
         }
       }
     }