diff --git a/apps/web/src/components/BranchToolbar.logic.test.ts b/apps/web/src/components/BranchToolbar.logic.test.ts
index 2f66e063ad..6137b77c52 100644
--- a/apps/web/src/components/BranchToolbar.logic.test.ts
+++ b/apps/web/src/components/BranchToolbar.logic.test.ts
@@ -1,14 +1,21 @@
-import type { GitBranch } from "@t3tools/contracts";
+import { EnvironmentId, type GitBranch } from "@t3tools/contracts";
 import { describe, expect, it } from "vitest";
 import {
   dedupeRemoteBranchesWithLocalMatches,
   deriveLocalBranchNameFromRemoteRef,
+  resolveEnvironmentOptionLabel,
   resolveBranchSelectionTarget,
+  resolveCurrentWorkspaceLabel,
   resolveDraftEnvModeAfterBranchChange,
+  resolveEffectiveEnvMode,
+  resolveEnvModeLabel,
   resolveBranchToolbarValue,
   shouldIncludeBranchPickerItem,
 } from "./BranchToolbar.logic";
 
+const localEnvironmentId = EnvironmentId.makeUnsafe("environment-local");
+const remoteEnvironmentId = EnvironmentId.makeUnsafe("environment-remote");
+
 describe("resolveDraftEnvModeAfterBranchChange", () => {
   it("switches to local mode when returning from an existing worktree to the main worktree", () => {
     expect(
@@ -76,6 +83,80 @@ describe("resolveBranchToolbarValue", () => {
   });
 });
 
+describe("resolveEnvironmentOptionLabel", () => {
+  it("prefers the primary environment's machine label", () => {
+    expect(
+      resolveEnvironmentOptionLabel({
+        isPrimary: true,
+        environmentId: localEnvironmentId,
+        runtimeLabel: "Julius's Mac mini",
+        savedLabel: "Local environment",
+      }),
+    ).toBe("Julius's Mac mini");
+  });
+
+  it("falls back to 'This device' for generic primary labels", () => {
+    expect(
+      resolveEnvironmentOptionLabel({
+        isPrimary: true,
+        environmentId: localEnvironmentId,
+        runtimeLabel: "Local environment",
+        savedLabel: "Local",
+      }),
+    ).toBe("This device");
+  });
+
+  it("keeps configured labels for non-primary environments", () => {
+    expect(
+      resolveEnvironmentOptionLabel({
+        isPrimary: false,
+        environmentId: remoteEnvironmentId,
+        runtimeLabel: null,
+        savedLabel: "Build box",
+      }),
+    ).toBe("Build box");
+  });
+});
+
+describe("resolveEffectiveEnvMode", () => {
+  it("treats draft threads already attached to a worktree as current-checkout mode", () => {
+    expect(
+      resolveEffectiveEnvMode({
+        activeWorktreePath: "/repo/.t3/worktrees/feature-a",
+        hasServerThread: false,
+        draftThreadEnvMode: "worktree",
+      }),
+    ).toBe("local");
+  });
+
+  it("keeps explicit new-worktree mode for draft threads without a worktree path", () => {
+    expect(
+      resolveEffectiveEnvMode({
+        activeWorktreePath: null,
+        hasServerThread: false,
+        draftThreadEnvMode: "worktree",
+      }),
+    ).toBe("worktree");
+  });
+});
+
+describe("resolveEnvModeLabel", () => {
+  it("uses explicit workspace labels", () => {
+    expect(resolveEnvModeLabel("local")).toBe("Current checkout");
+    expect(resolveEnvModeLabel("worktree")).toBe("New worktree");
+  });
+});
+
+describe("resolveCurrentWorkspaceLabel", () => {
+  it("describes the main repo checkout when no worktree path is active", () => {
+    expect(resolveCurrentWorkspaceLabel(null)).toBe("Current checkout");
+  });
+
+  it("describes the active checkout as a worktree when one is attached", () => {
+    expect(resolveCurrentWorkspaceLabel("/repo/.t3/worktrees/feature-a")).toBe("Current worktree");
+  });
+});
+
 describe("deriveLocalBranchNameFromRemoteRef", () => {
   it("strips the remote prefix from a remote ref", () => {
     expect(deriveLocalBranchNameFromRemoteRef("origin/feature/demo")).toBe("feature/demo");
diff --git a/apps/web/src/components/BranchToolbar.logic.ts b/apps/web/src/components/BranchToolbar.logic.ts
index adc6495953..54ec4370f4 100644
--- a/apps/web/src/components/BranchToolbar.logic.ts
+++ b/apps/web/src/components/BranchToolbar.logic.ts
@@ -15,15 +15,54 @@ export interface EnvironmentOption {
 export const EnvMode = Schema.Literals(["local", "worktree"]);
 export type EnvMode = typeof EnvMode.Type;
 
+const GENERIC_LOCAL_ENVIRONMENT_LABELS = new Set(["local", "local environment"]);
+
+function normalizeDisplayLabel(value: string | null | undefined): string | null {
+  const trimmed = value?.trim();
+  return trimmed && trimmed.length > 0 ? trimmed : null;
+}
+
+export function resolveEnvironmentOptionLabel(input: {
+  isPrimary: boolean;
+  environmentId: EnvironmentId;
+  runtimeLabel?: string | null;
+  savedLabel?: string | null;
+}): string {
+  const runtimeLabel = normalizeDisplayLabel(input.runtimeLabel);
+  const savedLabel = normalizeDisplayLabel(input.savedLabel);
+
+  if (input.isPrimary) {
+    const preferredLocalLabel = [runtimeLabel, savedLabel].find((label) => {
+      if (!label) return false;
+      return !GENERIC_LOCAL_ENVIRONMENT_LABELS.has(label.toLowerCase());
+    });
+    return preferredLocalLabel ?? "This device";
+  }
+
+  return runtimeLabel ?? savedLabel ?? input.environmentId;
+}
+
+export function resolveEnvModeLabel(mode: EnvMode): string {
+  return mode === "worktree" ? "New worktree" : "Current checkout";
+}
+
+export function resolveCurrentWorkspaceLabel(activeWorktreePath: string | null): string {
+  return activeWorktreePath ? "Current worktree" : resolveEnvModeLabel("local");
+}
+
 export function resolveEffectiveEnvMode(input: {
   activeWorktreePath: string | null;
   hasServerThread: boolean;
   draftThreadEnvMode: EnvMode | undefined;
 }): EnvMode {
   const { activeWorktreePath, hasServerThread, draftThreadEnvMode } = input;
-  return activeWorktreePath || (!hasServerThread && draftThreadEnvMode === "worktree")
-    ? "worktree"
-    : "local";
+  if (!hasServerThread) {
+    if (activeWorktreePath) {
+      return "local";
+    }
+    return draftThreadEnvMode === "worktree" ? "worktree" : "local";
+  }
+  return activeWorktreePath ? "worktree" : "local";
 }
 
 export function resolveDraftEnvModeAfterBranchChange(input: {
diff --git a/apps/web/src/components/BranchToolbar.tsx b/apps/web/src/components/BranchToolbar.tsx
index 94d11ae7bd..10e6023a41 100644
--- a/apps/web/src/components/BranchToolbar.tsx
+++ b/apps/web/src/components/BranchToolbar.tsx
@@ -62,6 +62,7 @@ export function BranchToolbar({
     hasServerThread: serverThread !== undefined,
     draftThreadEnvMode: draftThread?.envMode,
   });
+  const envModeLocked = envLocked || (serverThread !== undefined && activeWorktreePath !== null);
 
   const showEnvironmentPicker =
     availableEnvironments && availableEnvironments.length > 1 && onEnvironmentChange;
@@ -83,7 +84,7 @@ export function BranchToolbar({
           </>
         )}
         <BranchToolbarEnvModeSelector
-          envLocked={envLocked}
+          envLocked={envModeLocked}
           effectiveEnvMode={effectiveEnvMode}
           activeWorktreePath={activeWorktreePath}
           onEnvModeChange={onEnvModeChange}
diff --git a/apps/web/src/components/BranchToolbarEnvModeSelector.tsx b/apps/web/src/components/BranchToolbarEnvModeSelector.tsx
index e1145f65f4..39bf50359d 100644
--- a/apps/web/src/components/BranchToolbarEnvModeSelector.tsx
+++ b/apps/web/src/components/BranchToolbarEnvModeSelector.tsx
@@ -1,13 +1,20 @@
-import { FolderIcon, GitForkIcon } from "lucide-react";
-import { memo } from "react";
+import { FolderGit2Icon, FolderGitIcon, FolderIcon } from "lucide-react";
+import { memo, useMemo } from "react";
 
-import type { EnvMode } from "./BranchToolbar.logic";
-import { Select, SelectItem, SelectPopup, SelectTrigger, SelectValue } from "./ui/select";
-
-const envModeItems = [
-  { value: "local", label: "Local" },
-  { value: "worktree", label: "New worktree" },
-] as const;
+import {
+  resolveCurrentWorkspaceLabel,
+  resolveEnvModeLabel,
+  type EnvMode,
+} from "./BranchToolbar.logic";
+import {
+  Select,
+  SelectGroup,
+  SelectGroupLabel,
+  SelectItem,
+  SelectPopup,
+  SelectTrigger,
+  SelectValue,
+} from "./ui/select";
 
 interface BranchToolbarEnvModeSelectorProps {
   envLocked: boolean;
@@ -22,18 +29,26 @@ export const BranchToolbarEnvModeSelector = memo(function BranchToolbarEnvModeSe
   activeWorktreePath,
   onEnvModeChange,
 }: BranchToolbarEnvModeSelectorProps) {
-  if (envLocked || activeWorktreePath) {
+  const envModeItems = useMemo(
+    () => [
+      { value: "local", label: resolveCurrentWorkspaceLabel(activeWorktreePath) },
+      { value: "worktree", label: resolveEnvModeLabel("worktree") },
+    ],
+    [activeWorktreePath],
+  );
+
+  if (envLocked) {
     return (
       <span className="inline-flex items-center gap-1 border border-transparent px-[calc(--spacing(3)-1px)] text-sm font-medium text-muted-foreground/70 sm:text-xs">
         {activeWorktreePath ? (
           <>
-            <GitForkIcon className="size-3" />
-            Worktree
+            <FolderGitIcon className="size-3" />
+            {resolveCurrentWorkspaceLabel(activeWorktreePath)}
           </>
         ) : (
           <>
             <FolderIcon className="size-3" />
-            Local
+            {resolveCurrentWorkspaceLabel(activeWorktreePath)}
           </>
         )}
       </span>
@@ -46,27 +61,36 @@ export const BranchToolbarEnvModeSelector = memo(function BranchToolbarEnvModeSe
       onValueChange={(value) => onEnvModeChange(value as EnvMode)}
       items={envModeItems}
     >
-      <SelectTrigger variant="ghost" size="xs" className="font-medium">
+      <SelectTrigger variant="ghost" size="xs" className="font-medium" aria-label="Workspace">
         {effectiveEnvMode === "worktree" ? (
-          <GitForkIcon className="size-3" />
+          <FolderGit2Icon className="size-3" />
+        ) : activeWorktreePath ? (
+          <FolderGitIcon className="size-3" />
         ) : (
           <FolderIcon className="size-3" />
         )}
         <SelectValue />
       </SelectTrigger>
       <SelectPopup>
-        <SelectItem value="local">
-          <span className="inline-flex items-center gap-1.5">
-            <FolderIcon className="size-3" />
-            Local
-          </span>
-        </SelectItem>
-        <SelectItem value="worktree">
-          <span className="inline-flex items-center gap-1.5">
-            <GitForkIcon className="size-3" />
-            New worktree
-          </span>
-        </SelectItem>
+        <SelectGroup>
+          <SelectGroupLabel>Workspace</SelectGroupLabel>
+          <SelectItem value="local">
+            <span className="inline-flex items-center gap-1.5">
+              {activeWorktreePath ? (
+                <FolderGitIcon className="size-3" />
+              ) : (
+                <FolderIcon className="size-3" />
+              )}
+              {resolveCurrentWorkspaceLabel(activeWorktreePath)}
+            </span>
+          </SelectItem>
+          <SelectItem value="worktree">
+            <span className="inline-flex items-center gap-1.5">
+              <FolderGit2Icon className="size-3" />
+              {resolveEnvModeLabel("worktree")}
+            </span>
+          </SelectItem>
+        </SelectGroup>
       </SelectPopup>
     </Select>
   );
diff --git a/apps/web/src/components/BranchToolbarEnvironmentSelector.tsx b/apps/web/src/components/BranchToolbarEnvironmentSelector.tsx
index 1725e8e909..abfa21365e 100644
--- a/apps/web/src/components/BranchToolbarEnvironmentSelector.tsx
+++ b/apps/web/src/components/BranchToolbarEnvironmentSelector.tsx
@@ -1,9 +1,17 @@
 import type { EnvironmentId } from "@t3tools/contracts";
-import { CloudIcon, FolderIcon, ServerIcon } from "lucide-react";
+import { CloudIcon, MonitorIcon } from "lucide-react";
 import { memo, useMemo } from "react";
 
 import type { EnvironmentOption } from "./BranchToolbar.logic";
-import { Select, SelectItem, SelectPopup, SelectTrigger, SelectValue } from "./ui/select";
+import {
+  Select,
+  SelectGroup,
+  SelectGroupLabel,
+  SelectItem,
+  SelectPopup,
+  SelectTrigger,
+  SelectValue,
+} from "./ui/select";
 
 interface BranchToolbarEnvironmentSelectorProps {
   envLocked: boolean;
@@ -18,8 +26,8 @@ export const BranchToolbarEnvironmentSelector = memo(function BranchToolbarEnvir
   availableEnvironments,
   onEnvironmentChange,
 }: BranchToolbarEnvironmentSelectorProps) {
-  const activeEnvironmentLabel = useMemo(() => {
-    return availableEnvironments.find((env) => env.environmentId === environmentId)?.label ?? null;
+  const activeEnvironment = useMemo(() => {
+    return availableEnvironments.find((env) => env.environmentId === environmentId) ?? null;
   }, [availableEnvironments, environmentId]);
 
   const environmentItems = useMemo(
@@ -34,8 +42,12 @@ export const BranchToolbarEnvironmentSelector = memo(function BranchToolbarEnvir
   if (envLocked) {
     return (
       <span className="inline-flex items-center gap-1 border border-transparent px-[calc(--spacing(3)-1px)] text-sm font-medium text-muted-foreground/70 sm:text-xs">
-        <ServerIcon className="size-3" />
-        {activeEnvironmentLabel ?? "Environment"}
+        {activeEnvironment?.isPrimary ? (
+          <MonitorIcon className="size-3" />
+        ) : (
+          <CloudIcon className="size-3" />
+        )}
+        {activeEnvironment?.label ?? "Run on"}
       </span>
     );
   }
@@ -46,19 +58,30 @@ export const BranchToolbarEnvironmentSelector = memo(function BranchToolbarEnvir
       onValueChange={(value) => onEnvironmentChange(value as EnvironmentId)}
       items={environmentItems}
     >
-      <SelectTrigger variant="ghost" size="xs" className="font-medium">
-        <ServerIcon className="size-3" />
+      <SelectTrigger variant="ghost" size="xs" className="font-medium" aria-label="Run on">
+        {activeEnvironment?.isPrimary ? (
+          <MonitorIcon className="size-3" />
+        ) : (
+          <CloudIcon className="size-3" />
+        )}
         <SelectValue />
       </SelectTrigger>
       <SelectPopup>
-        {availableEnvironments.map((env) => (
-          <SelectItem key={env.environmentId} value={env.environmentId}>
-            <span className="inline-flex items-center gap-1.5">
-              {env.isPrimary ? <FolderIcon className="size-3" /> : <CloudIcon className="size-3" />}
-              {env.label}
-            </span>
-          </SelectItem>
-        ))}
+        <SelectGroup>
+          <SelectGroupLabel>Run on</SelectGroupLabel>
+          {availableEnvironments.map((env) => (
+            <SelectItem key={env.environmentId} value={env.environmentId}>
+              <span className="inline-flex items-center gap-1.5">
+                {env.isPrimary ? (
+                  <MonitorIcon className="size-3" />
+                ) : (
+                  <CloudIcon className="size-3" />
+                )}
+                {env.label}
+              </span>
+            </SelectItem>
+          ))}
+        </SelectGroup>
       </SelectPopup>
     </Select>
   );
diff --git a/apps/web/src/components/ChatView.browser.tsx b/apps/web/src/components/ChatView.browser.tsx
index ae2397d316..98a0e0f7bb 100644
--- a/apps/web/src/components/ChatView.browser.tsx
+++ b/apps/web/src/components/ChatView.browser.tsx
@@ -1993,7 +1993,7 @@ describe("ChatView timeline estimator parity (full app)", () => {
     });
 
     const mounted = await mountChatView({
-      viewport: DEFAULT_VIEWPORT,
+      viewport: WIDE_FOOTER_VIEWPORT,
       snapshot: withProjectScripts(createDraftOnlySnapshot(), [
         {
           id: "setup",
diff --git a/apps/web/src/components/ChatView.tsx b/apps/web/src/components/ChatView.tsx
index 6c408ea7b0..578c679798 100644
--- a/apps/web/src/components/ChatView.tsx
+++ b/apps/web/src/components/ChatView.tsx
@@ -187,6 +187,7 @@ import { ComposerPrimaryActions } from "./chat/ComposerPrimaryActions";
 import { ComposerPendingApprovalPanel } from "./chat/ComposerPendingApprovalPanel";
 import { ComposerPendingUserInputPanel } from "./chat/ComposerPendingUserInputPanel";
 import { ComposerPlanFollowUpBanner } from "./chat/ComposerPlanFollowUpBanner";
+import { resolveEffectiveEnvMode, resolveEnvironmentOptionLabel } from "./BranchToolbar.logic";
 import {
   getComposerProviderState,
   renderProviderTraitsMenuContent,
@@ -1065,9 +1066,12 @@ export default function ChatView(props: ChatViewProps) {
       const isPrimary = p.environmentId === primaryEnvironmentId;
       const savedRecord = savedEnvironmentRegistry[p.environmentId];
       const runtimeState = savedEnvironmentRuntimeById[p.environmentId];
-      const label = isPrimary
-        ? "Local"
-        : (runtimeState?.descriptor?.label ?? savedRecord?.label ?? p.environmentId);
+      const label = resolveEnvironmentOptionLabel({
+        isPrimary,
+        environmentId: p.environmentId,
+        runtimeLabel: runtimeState?.descriptor?.label ?? null,
+        savedLabel: savedRecord?.label ?? null,
+      });
       envs.push({
         environmentId: p.environmentId,
         projectId: p.id,
@@ -2890,12 +2894,12 @@ export default function ChatView(props: ChatViewProps) {
     return () => window.removeEventListener("keydown", onKeyDown);
   }, [closeExpandedImage, expandedImage, navigateExpandedImage]);
 
-  const activeWorktreePath = activeThread?.worktreePath;
-  const envMode: DraftThreadEnvMode = activeWorktreePath
-    ? "worktree"
-    : isLocalDraftThread
-      ? (draftThread?.envMode ?? "local")
-      : "local";
+  const activeWorktreePath = activeThread?.worktreePath ?? null;
+  const envMode: DraftThreadEnvMode = resolveEffectiveEnvMode({
+    activeWorktreePath,
+    hasServerThread: isServerThread,
+    draftThreadEnvMode: isLocalDraftThread ? draftThread?.envMode : undefined,
+  });
 
   useEffect(() => {
     if (!activeThreadId) {
@@ -4031,11 +4035,20 @@ export default function ChatView(props: ChatViewProps) {
   const onEnvModeChange = useCallback(
     (mode: DraftThreadEnvMode) => {
       if (isLocalDraftThread) {
-        setDraftThreadContext(composerDraftTarget, { envMode: mode });
+        setDraftThreadContext(composerDraftTarget, {
+          envMode: mode,
+          ...(mode === "worktree" && draftThread?.worktreePath ? { worktreePath: null } : {}),
+        });
       }
       scheduleComposerFocus();
     },
-    [composerDraftTarget, isLocalDraftThread, scheduleComposerFocus, setDraftThreadContext],
+    [
+      composerDraftTarget,
+      draftThread?.worktreePath,
+      isLocalDraftThread,
+      scheduleComposerFocus,
+      setDraftThreadContext,
+    ],
   );
 
   const applyPromptReplacement = useCallback(