diff --git a/src/main/hooks.test.ts b/src/main/hooks.test.ts
index f8744474ff3..a0b14b26cb2 100644
--- a/src/main/hooks.test.ts
+++ b/src/main/hooks.test.ts
@@ -346,7 +346,7 @@ describe('getEffectiveHooks', () => {
     expect(result?.scripts.setup).not.toContain('old-version')
   })
 
-  it('does not fall back to local settings hooks by default when yaml is missing', async () => {
+  it('falls back to legacy local hooks when policy is unset and yaml is missing', async () => {
     const fs = await import('fs')
     vi.mocked(fs.existsSync).mockReturnValue(false)
 
@@ -357,6 +357,26 @@ describe('getEffectiveHooks', () => {
     })
     const result = getEffectiveHooks(repo)
 
+    expect(result).toEqual({
+      scripts: {
+        setup: 'echo "local setup"',
+        archive: 'echo "local archive"'
+      }
+    })
+  })
+
+  it('does not fall back to local hooks when policy is explicitly shared-only', async () => {
+    const fs = await import('fs')
+    vi.mocked(fs.existsSync).mockReturnValue(false)
+
+    const { getEffectiveHooks } = await import('./hooks')
+    const repo = makeRepo({
+      mode: 'override',
+      commandSourcePolicy: 'shared-only',
+      scripts: { setup: 'echo "local setup"', archive: 'echo "local archive"' }
+    })
+    const result = getEffectiveHooks(repo)
+
     expect(result).toBeNull()
   })
 
diff --git a/src/main/hooks.ts b/src/main/hooks.ts
index 32c9eb540ab..44578cd541f 100644
--- a/src/main/hooks.ts
+++ b/src/main/hooks.ts
@@ -267,7 +267,8 @@ function ensureOrcaDirIgnored(repoPath: string): void {
 function getEffectiveHookScript(
   yamlScript: string | undefined,
   localScript: string | undefined,
-  policy: HookCommandSourcePolicy
+  policy: HookCommandSourcePolicy,
+  legacyFallback: boolean
 ): string | undefined {
   const shared = yamlScript?.trim()
   const local = localScript?.trim()
@@ -280,16 +281,36 @@ function getEffectiveHookScript(
     return [shared, local].filter(Boolean).join('\n') || undefined
   }
 
+  // Why: existing users persisted local setup/archive scripts before
+  // commandSourcePolicy existed. Without a fallback the new default
+  // 'shared-only' would silently drop those scripts when orca.yaml is missing.
+  if (legacyFallback) {
+    return shared || local || undefined
+  }
+
   return shared || undefined
 }
 
+function hasLegacyLocalScripts(repo: Repo): boolean {
+  return Boolean(
+    repo.hookSettings?.scripts.setup?.trim() || repo.hookSettings?.scripts.archive?.trim()
+  )
+}
+
 export function getEffectiveHooks(repo: Repo, worktreePath?: string): OrcaHooks | null {
   const yamlHooks = loadHooks(worktreePath ?? repo.path)
   const localSetup = repo.hookSettings?.scripts.setup
   const localArchive = repo.hookSettings?.scripts.archive
-  const policy = normalizeHookCommandSourcePolicy(repo.hookSettings?.commandSourcePolicy)
-  const setup = getEffectiveHookScript(yamlHooks?.scripts.setup, localSetup, policy)
-  const archive = getEffectiveHookScript(yamlHooks?.scripts.archive, localArchive, policy)
+  const rawPolicy = repo.hookSettings?.commandSourcePolicy
+  const policy = normalizeHookCommandSourcePolicy(rawPolicy)
+  const legacyFallback = rawPolicy === undefined && hasLegacyLocalScripts(repo)
+  const setup = getEffectiveHookScript(yamlHooks?.scripts.setup, localSetup, policy, legacyFallback)
+  const archive = getEffectiveHookScript(
+    yamlHooks?.scripts.archive,
+    localArchive,
+    policy,
+    legacyFallback
+  )
 
   if (!setup && !archive) {
     return null
@@ -332,7 +353,8 @@ export function getSetupCommandSource(
 ): { source: 'yaml' | 'local' | 'both'; command: string } | null {
   const yamlSetup = loadHooks(worktreePath ?? repo.path)?.scripts.setup?.trim()
   const localSetup = repo.hookSettings?.scripts.setup?.trim()
-  const policy = normalizeHookCommandSourcePolicy(repo.hookSettings?.commandSourcePolicy)
+  const rawPolicy = repo.hookSettings?.commandSourcePolicy
+  const policy = normalizeHookCommandSourcePolicy(rawPolicy)
 
   if (policy === 'local-only') {
     return localSetup ? { source: 'local', command: localSetup } : null
@@ -346,6 +368,12 @@ export function getSetupCommandSource(
     return { source: 'yaml', command: yamlSetup }
   }
 
+  // Why: pre-policy persisted local setup scripts must keep working when
+  // orca.yaml is missing; otherwise upgrading silently drops the legacy hook.
+  if (rawPolicy === undefined && localSetup && hasLegacyLocalScripts(repo)) {
+    return { source: 'local', command: localSetup }
+  }
+
   return null
 }