diff --git a/open-sse/services/compression/cacheAwareConfig.ts b/open-sse/services/compression/cacheAwareConfig.ts
index 5f0c01fb71..e6d1f2d447 100644
--- a/open-sse/services/compression/cacheAwareConfig.ts
+++ b/open-sse/services/compression/cacheAwareConfig.ts
@@ -1,23 +1,36 @@
 import type { CompressionConfig } from "./types.ts";
 import type { CachingDetectionContext } from "./cachingAware.ts";
 import { detectCachingContext, getCacheAwareStrategy } from "./cachingAware.ts";
+import {
+  normalizePreserveSystemPromptMode,
+  resolvePreserveSystemPrompt,
+} from "./preserveSystemPromptMode.ts";
 
 /**
- * #3890: honor the cache-aware `skipSystemPrompt` decision that
- * `getCacheAwareStrategy` already computes but `selectCompressionStrategy`
- * cannot return. In a caching context the system prompt is part of the
- * cacheable prefix, so compressing it breaks the upstream prompt cache.
+ * #3890/#3955 + T05/C5: materialize the engine-facing `preserveSystemPrompt`
+ * boolean from the authoritative `preserveSystemPromptMode` intent, using the
+ * cache-aware `skipSystemPrompt` signal that `getCacheAwareStrategy` already
+ * computes (a caching provider — or `cache_control` — means the system prompt is
+ * part of the cacheable prefix, so compressing it breaks the upstream cache).
+ *
+ * This generalizes the previous hard-coded "force `true` when a cache is present
+ * and the operator disabled preservation" into the three modes:
+ * - `always`      → always `true`.
+ * - `whenNoCache` → `true` only when a cache is present (the legacy `false`
+ *   behaviour — preserved exactly for back-compat).
+ * - `never`       → always `false`, even when it breaks a prompt cache.
  */
 export function resolveCacheAwareConfig(
   config: CompressionConfig,
   body?: Record<string, unknown>,
   context?: CachingDetectionContext
 ): CompressionConfig {
-  if (!body) return config;
-  const ctx = detectCachingContext(body, context);
-  const cacheAware = getCacheAwareStrategy(config.defaultMode, ctx);
-  if (cacheAware.skipSystemPrompt && config.preserveSystemPrompt === false) {
-    return { ...config, preserveSystemPrompt: true };
-  }
-  return config;
+  const mode = normalizePreserveSystemPromptMode(config);
+  // No request body → no cacheable prefix to detect; honor the mode at its no-cache baseline.
+  const hasCache = body
+    ? getCacheAwareStrategy(config.defaultMode, detectCachingContext(body, context)).skipSystemPrompt
+    : false;
+  const effective = resolvePreserveSystemPrompt(mode, { hasCache });
+  if (effective === config.preserveSystemPrompt) return config;
+  return { ...config, preserveSystemPrompt: effective };
 }
diff --git a/open-sse/services/compression/preserveSystemPromptMode.ts b/open-sse/services/compression/preserveSystemPromptMode.ts
new file mode 100644
index 0000000000..39528d442a
--- /dev/null
+++ b/open-sse/services/compression/preserveSystemPromptMode.ts
@@ -0,0 +1,72 @@
+import type { CompressionConfig, PreserveSystemPromptMode } from "./types.ts";
+
+/**
+ * T05/C5 — system-prompt preservation mode.
+ *
+ * The engine-facing field is the boolean `CompressionConfig.preserveSystemPrompt`
+ * (truthy = skip/preserve the system prompt). Its authoritative *intent* is the
+ * `preserveSystemPromptMode` enum, resolved to that boolean at the cache-aware layer
+ * (`resolveCacheAwareConfig`), which already runs upstream in `chatCore` with the
+ * caching context. This module is the single source of the enum<->boolean mapping so
+ * the legacy boolean and the new enum can never drift.
+ *
+ * Mode semantics:
+ * - `always`      → preserve the system prompt unconditionally.
+ * - `whenNoCache` → preserve it only when there is a cache to protect (provider caches
+ *                   the prefix or `cache_control` is present); compress it otherwise.
+ *                   This is exactly what the legacy `preserveSystemPrompt: false` already
+ *                   did via the #3890/#3955 cache guard.
+ * - `never`       → compress the system prompt even when it breaks a prompt cache.
+ */
+export const PRESERVE_SYSTEM_PROMPT_MODES: readonly PreserveSystemPromptMode[] = [
+  "always",
+  "whenNoCache",
+  "never",
+];
+
+export function isPreserveSystemPromptMode(value: unknown): value is PreserveSystemPromptMode {
+  return (
+    typeof value === "string" &&
+    (PRESERVE_SYSTEM_PROMPT_MODES as readonly string[]).includes(value)
+  );
+}
+
+/**
+ * Back-compat shim: derive the authoritative mode from a config. An explicit
+ * `preserveSystemPromptMode` always wins; otherwise the legacy boolean is mapped
+ * 1:1 to the behaviour it already had (`false → whenNoCache`, anything else → `always`).
+ */
+export function normalizePreserveSystemPromptMode(
+  config: Pick<CompressionConfig, "preserveSystemPrompt" | "preserveSystemPromptMode">
+): PreserveSystemPromptMode {
+  if (isPreserveSystemPromptMode(config.preserveSystemPromptMode)) {
+    return config.preserveSystemPromptMode;
+  }
+  return config.preserveSystemPrompt === false ? "whenNoCache" : "always";
+}
+
+/**
+ * Resolve a mode to the effective engine-facing boolean given whether a cacheable
+ * prefix is present. `true` = preserve (skip), `false` = compress the system prompt.
+ */
+export function resolvePreserveSystemPrompt(
+  mode: PreserveSystemPromptMode,
+  { hasCache }: { hasCache: boolean }
+): boolean {
+  switch (mode) {
+    case "always":
+      return true;
+    case "never":
+      return false;
+    case "whenNoCache":
+      return hasCache;
+  }
+}
+
+/**
+ * The no-cache projection of a mode — the stored/effective boolean used as a sane
+ * default for any reader that runs before the cache-aware layer materializes it.
+ */
+export function modeToBaselineBoolean(mode: PreserveSystemPromptMode): boolean {
+  return resolvePreserveSystemPrompt(mode, { hasCache: false });
+}
diff --git a/open-sse/services/compression/types.ts b/open-sse/services/compression/types.ts
index 755d9256f1..8e2e9b2d7f 100644
--- a/open-sse/services/compression/types.ts
+++ b/open-sse/services/compression/types.ts
@@ -145,13 +145,34 @@ export interface EngineToggle {
   level?: string;
 }
 
+/** T05/C5 — system-prompt preservation intent (see `CompressionConfig.preserveSystemPromptMode`). */
+export type PreserveSystemPromptMode = "always" | "whenNoCache" | "never";
+
 export interface CompressionConfig {
   enabled: boolean;
   defaultMode: CompressionMode;
   autoTriggerMode?: CompressionMode;
   autoTriggerTokens: number;
   cacheMinutes: number;
+  /**
+   * Effective, engine-facing boolean: when truthy the system prompt is skipped
+   * (preserved, not compressed). Kept as the materialized value all engines read.
+   * Its authoritative *intent* is `preserveSystemPromptMode` (T05/C5); this boolean
+   * is the no-cache projection of that mode, refined up to `true` by
+   * `resolveCacheAwareConfig` when a cacheable prefix is detected.
+   */
   preserveSystemPrompt: boolean;
+  /**
+   * T05/C5 — authoritative system-prompt preservation intent:
+   * - `always`: never compress the system prompt.
+   * - `whenNoCache`: compress it only when there is no cache to protect
+   *   (preserve when the provider caches or `cache_control` is present). This is the
+   *   behaviour the legacy `preserveSystemPrompt: false` already had via the cache guard.
+   * - `never`: always compress the system prompt, even when it breaks a prompt cache.
+   * Optional/back-compat: absent → derived from the legacy boolean
+   * (`false → whenNoCache`, otherwise `always`).
+   */
+  preserveSystemPromptMode?: PreserveSystemPromptMode;
   mcpDescriptionCompressionEnabled?: boolean;
   comboOverrides: Record<string, CompressionMode>;
   compressionComboId?: string | null;
@@ -289,6 +310,7 @@ export const DEFAULT_COMPRESSION_CONFIG: CompressionConfig = {
   autoTriggerTokens: 0,
   cacheMinutes: 5,
   preserveSystemPrompt: true,
+  preserveSystemPromptMode: "always",
   mcpDescriptionCompressionEnabled: true,
   comboOverrides: {},
   compressionComboId: null,
diff --git a/src/app/(dashboard)/dashboard/context/settings/CompressionPanel.tsx b/src/app/(dashboard)/dashboard/context/settings/CompressionPanel.tsx
index 192ba9f39b..da6a856b06 100644
--- a/src/app/(dashboard)/dashboard/context/settings/CompressionPanel.tsx
+++ b/src/app/(dashboard)/dashboard/context/settings/CompressionPanel.tsx
@@ -51,6 +51,7 @@ interface CompressionConfig {
   enabled: boolean;
   autoTriggerTokens: number;
   preserveSystemPrompt: boolean;
+  preserveSystemPromptMode?: "always" | "whenNoCache" | "never";
   engines: Record<string, EngineToggle>;
   activeComboId: string | null;
   cavemanOutputMode?: CavemanOutputModeConfig;
@@ -458,15 +459,25 @@ export default function CompressionPanel() {
         </label>
         <label className="flex items-center justify-between">
           <span className="text-sm text-text-muted">{t("compressionPreserveSystem")}</span>
-          <span data-testid="preserve-system-toggle">
-            <Toggle
-              size="sm"
-              checked={config.preserveSystemPrompt}
-              onChange={(preserveSystemPrompt) => save({ preserveSystemPrompt })}
-              disabled={saving}
-              ariaLabel={t("compressionPreserveSystem")}
-            />
-          </span>
+          <select
+            value={
+              config.preserveSystemPromptMode ??
+              (config.preserveSystemPrompt === false ? "whenNoCache" : "always")
+            }
+            onChange={(e) =>
+              save({
+                preserveSystemPromptMode: e.target.value as "always" | "whenNoCache" | "never",
+              })
+            }
+            disabled={saving}
+            aria-label={t("compressionPreserveSystem")}
+            data-testid="preserve-system-mode-select"
+            className="w-36 rounded border border-border bg-surface px-2 py-1 text-sm text-text-main"
+          >
+            <option value="always">{t("compressionPreserveSystemAlways")}</option>
+            <option value="whenNoCache">{t("compressionPreserveSystemWhenNoCache")}</option>
+            <option value="never">{t("compressionPreserveSystemNever")}</option>
+          </select>
         </label>
       </div>
     </Card>
diff --git a/src/app/(dashboard)/dashboard/settings/components/CompressionSettingsTab.tsx b/src/app/(dashboard)/dashboard/settings/components/CompressionSettingsTab.tsx
index a68426f21d..da4b993bd7 100644
--- a/src/app/(dashboard)/dashboard/settings/components/CompressionSettingsTab.tsx
+++ b/src/app/(dashboard)/dashboard/settings/components/CompressionSettingsTab.tsx
@@ -65,6 +65,7 @@ interface CompressionConfig extends CompressionTokenSaverConfig {
   autoTriggerTokens: number;
   cacheMinutes: number;
   preserveSystemPrompt: boolean;
+  preserveSystemPromptMode?: "always" | "whenNoCache" | "never";
   mcpDescriptionCompressionEnabled?: boolean;
   comboOverrides: Record<string, CompressionMode>;
   cavemanConfig?: CavemanConfig;
@@ -372,18 +373,26 @@ export default function CompressionSettingsTab() {
 
             <label className="flex items-center justify-between">
               <span className="text-sm text-text-muted">{t("compressionPreserveSystem")}</span>
-              <button
-                onClick={() => save({ preserveSystemPrompt: !config.preserveSystemPrompt })}
-                className={`relative w-10 h-5 rounded-full transition-colors ${
-                  config.preserveSystemPrompt ? "bg-green-500" : "bg-border"
-                }`}
+              <select
+                value={
+                  config.preserveSystemPromptMode ??
+                  (config.preserveSystemPrompt === false ? "whenNoCache" : "always")
+                }
+                onChange={(e) =>
+                  save({
+                    preserveSystemPromptMode: e.target.value as
+                      | "always"
+                      | "whenNoCache"
+                      | "never",
+                  })
+                }
+                className="w-36 px-2 py-1 text-sm rounded border border-border bg-surface text-text-main"
+                data-testid="preserve-system-mode-select"
               >
-                <span
-                  className={`absolute top-0.5 w-4 h-4 rounded-full bg-white transition-transform ${
-                    config.preserveSystemPrompt ? "left-5" : "left-0.5"
-                  }`}
-                />
-              </button>
+                <option value="always">{t("compressionPreserveSystemAlways")}</option>
+                <option value="whenNoCache">{t("compressionPreserveSystemWhenNoCache")}</option>
+                <option value="never">{t("compressionPreserveSystemNever")}</option>
+              </select>
             </label>
 
             <label className="flex items-center justify-between">
diff --git a/src/i18n/messages/en.json b/src/i18n/messages/en.json
index 8029041ba5..8e6f826b7e 100644
--- a/src/i18n/messages/en.json
+++ b/src/i18n/messages/en.json
@@ -5635,6 +5635,9 @@
     "compressionAutoTrigger": "Auto-Trigger Threshold",
     "compressionCacheTTL": "Cache TTL",
     "compressionPreserveSystem": "Preserve System Prompt",
+    "compressionPreserveSystemAlways": "Always",
+    "compressionPreserveSystemWhenNoCache": "When no cache",
+    "compressionPreserveSystemNever": "Never",
     "compressionCavemanConfig": "Caveman Engine Configuration",
     "compressionCavemanConfigDesc": "Fine-tune the rule-based compression engine",
     "compressionCavemanPanelHint": "Its on/off and level are set in the panel:",
diff --git a/src/lib/db/compression.ts b/src/lib/db/compression.ts
index 75f8c18027..6a19c83fcb 100644
--- a/src/lib/db/compression.ts
+++ b/src/lib/db/compression.ts
@@ -28,6 +28,7 @@ import {
   type RtkConfig,
   type UltraConfig,
 } from "@omniroute/open-sse/services/compression/types.ts";
+import { isPreserveSystemPromptMode } from "@omniroute/open-sse/services/compression/preserveSystemPromptMode.ts";
 import { maybePrewarmUltraSlmOnConfig } from "@omniroute/open-sse/services/compression/ultra.ts";
 
 const NAMESPACE = "compression";
@@ -587,6 +588,12 @@ export async function getCompressionSettings(): Promise<CompressionConfig> {
       case "preserveSystemPrompt":
         config.preserveSystemPrompt = parsed !== false;
         break;
+      case "preserveSystemPromptMode":
+        // T05/C5 — authoritative intent; ignore unknown tokens (keep the default mode).
+        if (isPreserveSystemPromptMode(parsed)) {
+          config.preserveSystemPromptMode = parsed;
+        }
+        break;
       case "mcpDescriptionCompressionEnabled":
         config.mcpDescriptionCompressionEnabled = parsed !== false;
         break;
diff --git a/src/shared/validation/compressionConfigSchemas.ts b/src/shared/validation/compressionConfigSchemas.ts
index e5ba212711..9a473598b0 100644
--- a/src/shared/validation/compressionConfigSchemas.ts
+++ b/src/shared/validation/compressionConfigSchemas.ts
@@ -210,6 +210,7 @@ export const compressionSettingsUpdateSchema = z
     autoTriggerTokens: z.number().int().min(0).optional(),
     cacheMinutes: z.number().int().min(1).max(60).optional(),
     preserveSystemPrompt: z.boolean().optional(),
+    preserveSystemPromptMode: z.enum(["always", "whenNoCache", "never"]).optional(),
     mcpDescriptionCompressionEnabled: z.boolean().optional(),
     comboOverrides: z.record(z.string(), compressionModeSchema).optional(),
     compressionComboId: z.string().trim().min(1).nullable().optional(),
diff --git a/tests/unit/compression/cache-aware-preserve-mode.test.ts b/tests/unit/compression/cache-aware-preserve-mode.test.ts
new file mode 100644
index 0000000000..4da555570c
--- /dev/null
+++ b/tests/unit/compression/cache-aware-preserve-mode.test.ts
@@ -0,0 +1,81 @@
+/**
+ * T05/C5 — resolveCacheAwareConfig materializes the `preserveSystemPromptMode` enum
+ * into the engine-facing `preserveSystemPrompt` boolean using the cache signal.
+ * The legacy boolean behaviour is covered by strategySelector-cache-aware.test.ts /
+ * compression-cache-guard-3955.test.ts (unchanged); this file covers the new enum.
+ */
+import { describe, it } from "node:test";
+import assert from "node:assert/strict";
+import { resolveCacheAwareConfig } from "../../../open-sse/services/compression/cacheAwareConfig.ts";
+import type {
+  CompressionConfig,
+  PreserveSystemPromptMode,
+} from "../../../open-sse/services/compression/types.ts";
+
+function cfg(overrides: Partial<CompressionConfig> = {}): CompressionConfig {
+  return {
+    enabled: true,
+    defaultMode: "standard",
+    autoTriggerTokens: 0,
+    cacheMinutes: 5,
+    preserveSystemPrompt: true,
+    comboOverrides: {},
+    ...overrides,
+  } as CompressionConfig;
+}
+
+// A request whose prefix the upstream caches (anthropic + explicit cache_control).
+const CACHING_BODY = {
+  messages: [{ role: "system", content: "x", cache_control: { type: "ephemeral" } }],
+};
+const CACHING_CTX = { provider: "anthropic", targetFormat: "claude" } as const;
+// google has no prompt caching → no cacheable prefix to protect.
+const NON_CACHING_BODY = { messages: [{ role: "system", content: "x" }] };
+const NON_CACHING_CTX = { provider: "google" } as const;
+
+function resolved(mode: PreserveSystemPromptMode, caching: boolean): boolean {
+  const out = resolveCacheAwareConfig(
+    cfg({ preserveSystemPromptMode: mode, preserveSystemPrompt: true }),
+    caching ? CACHING_BODY : NON_CACHING_BODY,
+    caching ? CACHING_CTX : NON_CACHING_CTX
+  );
+  return out.preserveSystemPrompt;
+}
+
+describe("T05/C5 preserveSystemPromptMode -> effective boolean", () => {
+  it("always: preserves regardless of cache", () => {
+    assert.equal(resolved("always", true), true);
+    assert.equal(resolved("always", false), true);
+  });
+
+  it("whenNoCache: preserves only when a cache is present", () => {
+    assert.equal(resolved("whenNoCache", true), true);
+    assert.equal(resolved("whenNoCache", false), false);
+  });
+
+  it("never: compresses the system prompt even when it would break the prompt cache", () => {
+    assert.equal(resolved("never", true), false);
+    assert.equal(resolved("never", false), false);
+  });
+
+  it("the explicit mode overrides a contradicting legacy boolean", () => {
+    // mode=never wins even though the legacy boolean asks to preserve.
+    const out = resolveCacheAwareConfig(
+      cfg({ preserveSystemPromptMode: "never", preserveSystemPrompt: true }),
+      CACHING_BODY,
+      CACHING_CTX
+    );
+    assert.equal(out.preserveSystemPrompt, false);
+  });
+
+  it("no body: honors the mode at its no-cache baseline", () => {
+    assert.equal(
+      resolveCacheAwareConfig(cfg({ preserveSystemPromptMode: "whenNoCache" })).preserveSystemPrompt,
+      false
+    );
+    assert.equal(
+      resolveCacheAwareConfig(cfg({ preserveSystemPromptMode: "always" })).preserveSystemPrompt,
+      true
+    );
+  });
+});
diff --git a/tests/unit/compression/db.test.ts b/tests/unit/compression/db.test.ts
index 9f4731da42..2df3895713 100644
--- a/tests/unit/compression/db.test.ts
+++ b/tests/unit/compression/db.test.ts
@@ -51,6 +51,7 @@ describe("getCompressionSettings", () => {
     assert.equal(settings.autoTriggerTokens, 0);
     assert.equal(settings.cacheMinutes, 5);
     assert.equal(settings.preserveSystemPrompt, true);
+    assert.equal(settings.preserveSystemPromptMode, "always");
     assert.deepEqual(settings.comboOverrides, {});
     assert.equal(settings.ultra?.enabled, false);
     assert.equal(settings.ultra?.compressionRate, 0.5);
@@ -77,6 +78,25 @@ describe("updateCompressionSettings", () => {
     await updateCompressionSettings({ defaultMode: "off" } as any);
   });
 
+  it("round-trips preserveSystemPromptMode and ignores unknown tokens (T05/C5)", async () => {
+    await updateCompressionSettings({ preserveSystemPromptMode: "never" } as any);
+    let settings = await getCompressionSettings();
+    assert.equal(settings.preserveSystemPromptMode, "never");
+
+    await updateCompressionSettings({ preserveSystemPromptMode: "whenNoCache" } as any);
+    settings = await getCompressionSettings();
+    assert.equal(settings.preserveSystemPromptMode, "whenNoCache");
+
+    // An unknown persisted token is rejected on read and falls back to the safe
+    // default mode ("always"), never crashing the settings load.
+    await updateCompressionSettings({ preserveSystemPromptMode: "garbage" } as any);
+    settings = await getCompressionSettings();
+    assert.equal(settings.preserveSystemPromptMode, "always");
+
+    // Reset
+    await updateCompressionSettings({ preserveSystemPromptMode: "always" } as any);
+  });
+
   it("updates autoTriggerTokens", async () => {
     await updateCompressionSettings({ autoTriggerTokens: 5000 } as any);
     const settings = await getCompressionSettings();
diff --git a/tests/unit/compression/preserve-system-prompt-mode.test.ts b/tests/unit/compression/preserve-system-prompt-mode.test.ts
new file mode 100644
index 0000000000..8cb09fc7db
--- /dev/null
+++ b/tests/unit/compression/preserve-system-prompt-mode.test.ts
@@ -0,0 +1,78 @@
+import test from "node:test";
+import assert from "node:assert/strict";
+import {
+  PRESERVE_SYSTEM_PROMPT_MODES,
+  isPreserveSystemPromptMode,
+  normalizePreserveSystemPromptMode,
+  resolvePreserveSystemPrompt,
+  modeToBaselineBoolean,
+} from "../../../open-sse/services/compression/preserveSystemPromptMode.ts";
+
+// T05/C5 — preserveSystemPrompt boolean -> enum (always | whenNoCache | never) + back-compat shim.
+
+test("isPreserveSystemPromptMode only accepts the three known tokens", () => {
+  for (const m of PRESERVE_SYSTEM_PROMPT_MODES) assert.equal(isPreserveSystemPromptMode(m), true);
+  for (const bad of ["", "Always", "no-cache", true, false, 1, null, undefined, {}]) {
+    assert.equal(isPreserveSystemPromptMode(bad), false, `${String(bad)} must be rejected`);
+  }
+});
+
+test("normalize: an explicit mode wins over the legacy boolean", () => {
+  assert.equal(
+    normalizePreserveSystemPromptMode({ preserveSystemPrompt: true, preserveSystemPromptMode: "never" }),
+    "never"
+  );
+  assert.equal(
+    normalizePreserveSystemPromptMode({ preserveSystemPrompt: false, preserveSystemPromptMode: "always" }),
+    "always"
+  );
+});
+
+test("normalize: the shim maps the legacy boolean 1:1 (true->always, false->whenNoCache)", () => {
+  // The shim is a behaviour identity: legacy `false` already meant "compress unless
+  // there is a cache" via the #3890/#3955 guard, i.e. exactly `whenNoCache`.
+  assert.equal(normalizePreserveSystemPromptMode({ preserveSystemPrompt: true }), "always");
+  assert.equal(normalizePreserveSystemPromptMode({ preserveSystemPrompt: false }), "whenNoCache");
+});
+
+test("normalize: an invalid mode string falls back to the legacy boolean", () => {
+  assert.equal(
+    normalizePreserveSystemPromptMode({
+      preserveSystemPrompt: false,
+      preserveSystemPromptMode: "garbage" as unknown as "always",
+    }),
+    "whenNoCache"
+  );
+});
+
+test("resolve: always preserves and never compresses regardless of cache", () => {
+  assert.equal(resolvePreserveSystemPrompt("always", { hasCache: true }), true);
+  assert.equal(resolvePreserveSystemPrompt("always", { hasCache: false }), true);
+  assert.equal(resolvePreserveSystemPrompt("never", { hasCache: true }), false);
+  assert.equal(resolvePreserveSystemPrompt("never", { hasCache: false }), false);
+});
+
+test("resolve: whenNoCache preserves only when a cache is present", () => {
+  assert.equal(resolvePreserveSystemPrompt("whenNoCache", { hasCache: true }), true);
+  assert.equal(resolvePreserveSystemPrompt("whenNoCache", { hasCache: false }), false);
+});
+
+test("modeToBaselineBoolean is the no-cache projection", () => {
+  assert.equal(modeToBaselineBoolean("always"), true);
+  assert.equal(modeToBaselineBoolean("whenNoCache"), false);
+  assert.equal(modeToBaselineBoolean("never"), false);
+});
+
+test("back-compat identity: legacy config resolves to the old cache-guard outcome", () => {
+  // Old behaviour: preserveSystemPrompt=false stays false without cache, forced true with cache.
+  const legacyFalse = { preserveSystemPrompt: false };
+  const mode = normalizePreserveSystemPromptMode(legacyFalse);
+  assert.equal(resolvePreserveSystemPrompt(mode, { hasCache: false }), false);
+  assert.equal(resolvePreserveSystemPrompt(mode, { hasCache: true }), true);
+
+  // Old behaviour: preserveSystemPrompt=true is always preserved.
+  const legacyTrue = { preserveSystemPrompt: true };
+  const modeT = normalizePreserveSystemPromptMode(legacyTrue);
+  assert.equal(resolvePreserveSystemPrompt(modeT, { hasCache: false }), true);
+  assert.equal(resolvePreserveSystemPrompt(modeT, { hasCache: true }), true);
+});
diff --git a/tests/unit/ui/compression-settings-tab-consolidation.test.tsx b/tests/unit/ui/compression-settings-tab-consolidation.test.tsx
index 101aaf5724..c5d5f6b182 100644
--- a/tests/unit/ui/compression-settings-tab-consolidation.test.tsx
+++ b/tests/unit/ui/compression-settings-tab-consolidation.test.tsx
@@ -111,4 +111,34 @@ describe("CompressionSettingsTab — compression controls consolidation (T11)",
     expect(container.textContent).toContain("compressionSkipRules");
     expect(container.textContent).toContain("compressionPreservePatterns");
   });
+
+  it("renders the preserveSystemPrompt 3-way mode select reflecting the shim (T05/C5)", async () => {
+    await renderTab();
+    const select = container.querySelector<HTMLSelectElement>(
+      '[data-testid="preserve-system-mode-select"]'
+    );
+    expect(select).not.toBeNull();
+    const values = Array.from(select!.querySelectorAll("option")).map((o) => o.value);
+    expect(values).toEqual(["always", "whenNoCache", "never"]);
+    // CONFIG has preserveSystemPrompt: true and no explicit mode → shim renders "always".
+    expect(select!.value).toBe("always");
+  });
+
+  it("saves the chosen mode via PUT (T05/C5)", async () => {
+    await renderTab();
+    const select = container.querySelector<HTMLSelectElement>(
+      '[data-testid="preserve-system-mode-select"]'
+    );
+    await act(async () => {
+      select!.value = "never";
+      select!.dispatchEvent(new Event("change", { bubbles: true }));
+      await new Promise((resolve) => setTimeout(resolve, 0));
+    });
+    const putCall = (globalThis.fetch as ReturnType<typeof vi.fn>).mock.calls.find(
+      ([, init]) => (init as RequestInit | undefined)?.method === "PUT"
+    );
+    expect(putCall).toBeTruthy();
+    const body = JSON.parse(String((putCall![1] as RequestInit).body));
+    expect(body.preserveSystemPromptMode).toBe("never");
+  });
 });