diff --git a/packages/coding-agent/src/core/agent-session.ts b/packages/coding-agent/src/core/agent-session.ts
index fe450e5e..54dbb1a8 100644
--- a/packages/coding-agent/src/core/agent-session.ts
+++ b/packages/coding-agent/src/core/agent-session.ts
@@ -2370,7 +2370,7 @@ export class AgentSession {
 		this._pendingNextTurnMessages = [];
 
 		if (!selectedEntry.parentId) {
-			this.sessionManager.newSession();
+			this.sessionManager.newSession({ parentSession: previousSessionFile });
 		} else {
 			this.sessionManager.createBranchedSession(selectedEntry.parentId);
 		}
diff --git a/packages/coding-agent/src/core/session-manager.ts b/packages/coding-agent/src/core/session-manager.ts
index b8c74c69..839a9e9b 100644
--- a/packages/coding-agent/src/core/session-manager.ts
+++ b/packages/coding-agent/src/core/session-manager.ts
@@ -1150,6 +1150,7 @@ export class SessionManager {
 	 * Returns the new session file path, or undefined if not persisting.
 	 */
 	createBranchedSession(leafId: string): string | undefined {
+		const previousSessionFile = this.sessionFile;
 		const path = this.getBranch(leafId);
 		if (path.length === 0) {
 			throw new Error(`Entry ${leafId} not found`);
@@ -1169,7 +1170,7 @@ export class SessionManager {
 			id: newSessionId,
 			timestamp,
 			cwd: this.cwd,
-			parentSession: this.persist ? this.sessionFile : undefined,
+			parentSession: this.persist ? previousSessionFile : undefined,
 		};
 
 		// Collect labels for entries in the path
@@ -1206,6 +1207,8 @@ export class SessionManager {
 			}
 			this.fileEntries = [header, ...pathWithoutLabels, ...labelEntries];
 			this.sessionId = newSessionId;
+			this.sessionFile = newSessionFile;
+			this.flushed = true;
 			this._buildIndex();
 			return newSessionFile;
 		}
diff --git a/packages/coding-agent/test/git-update.test.ts b/packages/coding-agent/test/git-update.test.ts
index 72e6bdc9..c79521dc 100644
--- a/packages/coding-agent/test/git-update.test.ts
+++ b/packages/coding-agent/test/git-update.test.ts
@@ -88,15 +88,15 @@ describe("DefaultPackageManager git update", () => {
 		// Create "remote" repository
 		mkdirSync(remoteDir, { recursive: true });
 		git(["init"], remoteDir);
-		git(["config", "user.email", "test@test.com"], remoteDir);
-		git(["config", "user.name", "Test"], remoteDir);
+		git(["config", "--local", "user.email", "test@test.com"], remoteDir);
+		git(["config", "--local", "user.name", "Test"], remoteDir);
 		createCommit(remoteDir, "extension.ts", "// v1", "Initial commit");
 
 		// Clone to installed directory (simulating what install() does)
 		mkdirSync(join(agentDir, "git", "github.com", "test"), { recursive: true });
 		git(["clone", remoteDir, installedDir], tempDir);
-		git(["config", "user.email", "test@test.com"], installedDir);
-		git(["config", "user.name", "Test"], installedDir);
+		git(["config", "--local", "user.email", "test@test.com"], installedDir);
+		git(["config", "--local", "user.name", "Test"], installedDir);
 
 		// Add to global packages so update() processes this source
 		settingsManager.setPackages([gitSource]);