diff --git a/src/resources/extensions/gsd/tests/complete-milestone-false-merge.test.ts b/src/resources/extensions/gsd/tests/complete-milestone-false-merge.test.ts
new file mode 100644
index 000000000..3c7e40996
--- /dev/null
+++ b/src/resources/extensions/gsd/tests/complete-milestone-false-merge.test.ts
@@ -0,0 +1,142 @@
+/**
+ * complete-milestone-false-merge.test.ts — Regression test for #4175.
+ *
+ * Before the fix, a failed complete-milestone unit could leave a stub
+ * SUMMARY blocker placeholder on disk. stopAuto's SUMMARY-presence check
+ * then treated the milestone as complete and merged the worktree branch
+ * into main — emitting a misleading metadata-only merge warning for a
+ * milestone that was never legitimately finished.
+ *
+ * The fix has three cooperating parts:
+ *   1. stopAuto uses DB status (authoritative) instead of SUMMARY presence
+ *      when the project DB is available.
+ *   2. postUnitPreVerification pauses auto-mode for complete-milestone
+ *      after retries are exhausted instead of writing a blocker placeholder.
+ *   3. recoverTimedOutUnit pauses for complete-milestone instead of
+ *      writing a blocker placeholder.
+ *
+ * This test guards all three via source inspection so a future refactor
+ * cannot silently reintroduce the false-merge path.
+ */
+
+import test from "node:test";
+import assert from "node:assert/strict";
+import { readFileSync } from "node:fs";
+import { join } from "node:path";
+
+const gsdDir = join(import.meta.dirname, "..");
+const autoSrc = readFileSync(join(gsdDir, "auto.ts"), "utf-8");
+const postUnitSrc = readFileSync(join(gsdDir, "auto-post-unit.ts"), "utf-8");
+const timeoutSrc = readFileSync(join(gsdDir, "auto-timeout-recovery.ts"), "utf-8");
+
+test("#4175: stopAuto uses DB status as the authoritative milestone-complete signal", () => {
+  const step4Idx = autoSrc.indexOf("Step 4: Auto-worktree exit");
+  assert.ok(step4Idx !== -1, "Step 4 comment exists in stopAuto");
+  const step5Idx = autoSrc.indexOf("Step 5:", step4Idx);
+  const step4Block = autoSrc.slice(step4Idx, step5Idx);
+
+  assert.ok(
+    step4Block.includes("isDbAvailable()"),
+    "Step 4 should branch on isDbAvailable() so DB is consulted when present",
+  );
+  assert.ok(
+    step4Block.includes("getMilestone(s.currentMilestoneId)"),
+    "Step 4 should read authoritative milestone status via getMilestone()",
+  );
+  assert.ok(
+    /status\s*===\s*"complete"/.test(step4Block),
+    'Step 4 should compare the DB row status to "complete"',
+  );
+});
+
+test("#4175: stopAuto imports getMilestone from gsd-db", () => {
+  assert.ok(
+    /import\s*\{[^}]*\bgetMilestone\b[^}]*\}\s*from\s*"\.\/gsd-db\.js"/.test(autoSrc),
+    "auto.ts should import getMilestone from ./gsd-db.js",
+  );
+});
+
+test("#4175: stopAuto still falls back to SUMMARY presence when DB is unavailable", () => {
+  const step4Idx = autoSrc.indexOf("Step 4: Auto-worktree exit");
+  const step5Idx = autoSrc.indexOf("Step 5:", step4Idx);
+  const step4Block = autoSrc.slice(step4Idx, step5Idx);
+
+  assert.ok(
+    step4Block.includes("resolveMilestoneFile"),
+    "Step 4 should keep SUMMARY-file resolution for DB-unavailable projects",
+  );
+  assert.ok(
+    step4Block.includes("preserveBranch"),
+    "Step 4 should still preserve branch for incomplete milestones (fallback path)",
+  );
+});
+
+test("#4175: postUnitPreVerification pauses complete-milestone after retries exhausted", () => {
+  // The pause branch must live inside the retries-exhausted block, above the
+  // writeBlockerPlaceholder call — otherwise the stub SUMMARY is still written.
+  const retriesExhaustedIdx = postUnitSrc.indexOf(
+    "if (attempt > MAX_VERIFICATION_RETRIES)",
+  );
+  assert.ok(
+    retriesExhaustedIdx !== -1,
+    "retries-exhausted guard exists in postUnitPreVerification",
+  );
+
+  const blockerCallIdx = postUnitSrc.indexOf("writeBlockerPlaceholder", retriesExhaustedIdx);
+  assert.ok(
+    blockerCallIdx !== -1,
+    "blocker placeholder call still exists for non-milestone units",
+  );
+
+  const exhaustedBlock = postUnitSrc.slice(retriesExhaustedIdx, blockerCallIdx);
+
+  assert.ok(
+    /s\.currentUnit\.type\s*===\s*"complete-milestone"/.test(exhaustedBlock),
+    "retries-exhausted block should specifically handle complete-milestone",
+  );
+  assert.ok(
+    /pauseAuto\s*\(\s*ctx\s*,\s*pi\s*\)/.test(exhaustedBlock),
+    "complete-milestone path should call pauseAuto instead of falling through",
+  );
+  // The pause branch must return so execution never reaches writeBlockerPlaceholder.
+  assert.ok(
+    /return\s+"dispatched"\s*;/.test(exhaustedBlock),
+    "complete-milestone pause branch should return before the placeholder call",
+  );
+});
+
+test("#4175: recoverTimedOutUnit pauses complete-milestone instead of writing a blocker placeholder", () => {
+  // The complete-milestone pause branch must sit immediately above the
+  // "retries exhausted" writeBlockerPlaceholder call so a failed
+  // complete-milestone never produces a stub SUMMARY. Anchor on the
+  // comment that precedes that specific placeholder call rather than the
+  // function's earlier writeBlockerPlaceholder use sites or its import.
+  // Use lastIndexOf so we find the final retries-exhausted block in
+  // recoverTimedOutUnit, not an earlier helper with the same comment.
+  const exhaustedAnchor = "Retries exhausted — write a blocker placeholder";
+  const exhaustedIdx = timeoutSrc.lastIndexOf(exhaustedAnchor);
+  assert.ok(
+    exhaustedIdx !== -1,
+    "retries-exhausted blocker-placeholder path still exists for non-milestone units",
+  );
+
+  const guardIdx = timeoutSrc.lastIndexOf(
+    'unitType === "complete-milestone"',
+    exhaustedIdx,
+  );
+  assert.ok(
+    guardIdx !== -1,
+    "complete-milestone guard should appear above the retries-exhausted placeholder call",
+  );
+
+  const guardBlock = timeoutSrc.slice(guardIdx, exhaustedIdx);
+  assert.ok(
+    /return\s+"paused"\s*;/.test(guardBlock),
+    "complete-milestone guard should return 'paused' before the placeholder call",
+  );
+  // The guard itself must not call writeBlockerPlaceholder.
+  assert.ok(
+    !guardBlock.includes("writeBlockerPlaceholder"),
+    "complete-milestone guard must not write a blocker placeholder",
+  );
+});