diff --git a/CHANGELOG.md b/CHANGELOG.md
index 0a283a411f..c61af02707 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -9,6 +9,7 @@
 ### 🐛 Fixed
 
 - **fix(intelligence): run pricing + models.dev sync from the live startup path** — like the Arena ELO sync (v3.8.24), the external **pricing sync** (`PRICING_SYNC_ENABLED`) and the **models.dev capability sync** (Settings → AI toggle) were only initialized from `server-init.ts`, which the Next standalone runtime never executes — and models.dev had no caller at all. Their toggles were inert in production. Both are now initialized from `instrumentation-node.ts` (self-gated, opt-in preserved, non-blocking, never fatal). (thanks @diegosouzapw)
+- **test(proxy): guard the per-connection 'direct' bypass over a global proxy + clearer label** — the per-connection "Proxy Off" toggle (`proxyEnabled: false`) already overrides a configured **global** proxy (`resolveProxyForConnection` short-circuits to `level: "direct"` before the global step). Added an explicit regression test proving the bypass beats a global assignment (and round-trips on re-enable), and relabeled the UI to "Direct (bypass proxy)" so operators recognize it. Closes the verification gap in [#2996](https://github.com/diegosouzapw/OmniRoute/issues/2996). (thanks @diegosouzapw)
 - **feat(connections): per-connection "disable cooldown" opt-out** — a connection can now opt out of the transient cooldown (`providerSpecificData.disableCooling`, with a toggle in the Edit Connection modal). When set, a recoverable failure still records the error/backoff but does **not** take the connection out of rotation, so it stays eligible for selection — useful for a primary key you never want parked on a blip. Terminal states (banned / expired / credits_exhausted) still apply. ([#2997](https://github.com/diegosouzapw/OmniRoute/issues/2997) — thanks @diegosouzapw)
 - **fix(combo): restore sessionless combo stickiness + reasoning-aware readiness (504 / TPS regression after v3.8.14)** — #3399 (v3.8.16) replaced the `<omniModel>`-tag combo pinning with a server-side context-cache pin gated on a client `sessionId`. Clients that send no session id (most OpenAI-compatible tools) lost combo stickiness, so combos re-ran strategy selection every turn → upstream prompt-cache misses → cold high-reasoning starts (~78s) → intermittent `[504] Upstream request did not return response headers` + TPS collapse (only on combos). The pin now falls back to a stable per-conversation fingerprint (`extractSessionAffinityKey(body)`) when no session id is present — **only when `context_cache_protection` is on**, so #3399's anti-leak behaviour is preserved. Separately, the stream-readiness window now grants the +30s reasoning budget **unconditionally** for high-reasoning Codex GPT-5.x (small high-reasoning prompts were 504-ing at the 80s base regardless of stickiness). ([#3825](https://github.com/diegosouzapw/OmniRoute/issues/3825) — thanks @bypanghu)
 - **test(combo): cover the `skipProviderBreaker` consumer gate** — the producer was tested but the consumer (whether a failed combo target trips the whole-provider circuit breaker) was not; the breaker decision is now an exported pure predicate (`shouldRecordProviderBreakerFailure`, behaviour-identical) with direct tests asserting a `connection_cooldown` 503 does not trip the breaker while a plain 503 does. Closes another deferred test gap from [#2743](https://github.com/diegosouzapw/OmniRoute/issues/2743). (thanks @diegosouzapw)
diff --git a/src/i18n/messages/en.json b/src/i18n/messages/en.json
index 21ebe6a8bd..b0e2ec8c2d 100644
--- a/src/i18n/messages/en.json
+++ b/src/i18n/messages/en.json
@@ -4179,9 +4179,9 @@
     "proxySourceKey": "Key",
     "proxyConfiguredBySource": "Proxy ({source}): {host}",
     "proxyOn": "Proxy On",
-    "proxyOff": "Proxy Off",
+    "proxyOff": "Direct (bypass proxy)",
     "proxyEnabledTitle": "Proxy is enabled for this connection",
-    "proxyDisabledTitle": "Proxy is disabled for this connection",
+    "proxyDisabledTitle": "Direct connection — bypasses every proxy (including the global proxy) for this connection",
     "perKeyProxyOn": "Per-key",
     "perKeyProxyOff": "Connection",
     "perKeyProxyEnabledTitle": "Per-key proxy assignment enabled for this provider",
diff --git a/tests/unit/proxy-registry.test.ts b/tests/unit/proxy-registry.test.ts
index 4de351fcee..c2b747ca5d 100644
--- a/tests/unit/proxy-registry.test.ts
+++ b/tests/unit/proxy-registry.test.ts
@@ -417,6 +417,61 @@ test("connection proxy toggle gates account assignments and invalidates cached r
   assert.equal((enabledResolved.proxy as any).host, "pool-proxy.local");
 });
 
+// #2996: Per-connection proxy 'direct' bypass. A connection with proxyEnabled:false
+// must go DIRECT even when a GLOBAL proxy is configured. The existing toggle test
+// (above) only proves the bypass beats an ACCOUNT-scoped assignment; this guards the
+// exact scenario the issue requests — the per-connection bypass overriding a configured
+// GLOBAL proxy (resolveProxyForConnection step 9, "global" registry level), and that it
+// is a clean two-way toggle (re-enabling returns to the global proxy).
+test("per-connection proxy 'direct' bypass overrides a configured GLOBAL proxy (#2996)", async () => {
+  await resetStorage();
+
+  const globalProxy = await proxiesDb.createProxy({
+    name: "Global Bypass Proxy",
+    type: "http",
+    host: "global-bypass.local",
+    port: 8080,
+  });
+  await proxiesDb.assignProxyToScope("global", null, globalProxy.id);
+
+  // Use a provider name unique to this test so a registry/legacy provider-scoped
+  // assignment left over from another test in the shared process cannot resolve at
+  // step 6/8 and mask the GLOBAL precondition we are asserting (mirrors the hermetic
+  // unique-provider pattern used by the "connection proxy toggle gates" test above).
+  const connection = await providersDb.createProviderConnection({
+    provider: "proxy-global-bypass-2996-provider",
+    authType: "apikey",
+    name: "Global Bypass Account",
+    apiKey: "sk-global-bypass",
+  });
+
+  // No per-connection assignment: the connection should inherit the GLOBAL proxy.
+  const globalResolved = await settingsDb.resolveProxyForConnection((connection as any).id);
+  assert.equal(globalResolved.level, "global");
+  assert.ok(globalResolved.proxy, "expected the global proxy to be resolved before bypass");
+  assert.equal((globalResolved.proxy as any).host, "global-bypass.local");
+
+  // Per-connection Proxy Off must override the configured GLOBAL proxy → direct.
+  const disabled = await providersDb.updateProviderConnection((connection as any).id, {
+    proxyEnabled: false,
+  });
+  assert.equal((disabled as any).proxyEnabled, false);
+
+  const disabledResolved = await settingsDb.resolveProxyForConnection((connection as any).id);
+  assert.equal(disabledResolved.level, "direct");
+  assert.equal(disabledResolved.proxy, null);
+
+  // Re-enabling restores the GLOBAL proxy — proves it is a clean toggle, not one-way.
+  const enabled = await providersDb.updateProviderConnection((connection as any).id, {
+    proxyEnabled: true,
+  });
+  assert.equal((enabled as any).proxyEnabled, true);
+
+  const enabledResolved = await settingsDb.resolveProxyForConnection((connection as any).id);
+  assert.equal(enabledResolved.level, "global");
+  assert.equal((enabledResolved.proxy as any).host, "global-bypass.local");
+});
+
 test("provider connection proxy toggle fields round-trip as booleans", async () => {
   await resetStorage();