diff --git a/src/agents/pi-embedded-subscribe.handlers.messages.ts b/src/agents/pi-embedded-subscribe.handlers.messages.ts
index b6b780c9b5..5246c43a74 100644
--- a/src/agents/pi-embedded-subscribe.handlers.messages.ts
+++ b/src/agents/pi-embedded-subscribe.handlers.messages.ts
@@ -166,11 +166,6 @@ export function handleMessageUpdate(
   }
 
   const streamedReasoning = extractThinkingFromTaggedStream(ctx.state.deltaBuffer);
-  if (streamedReasoning) {
-    // Keep the latest observed reasoning so reasoning=on can still emit a separate
-    // reasoning block when providers omit thinking blocks in final message content.
-    ctx.state.lastObservedReasoning = streamedReasoning;
-  }
   if (ctx.state.streamReasoning) {
     // Handle partial <think> tags: stream whatever reasoning is visible so far.
     ctx.emitReasoningStream(streamedReasoning);
@@ -280,12 +275,10 @@ export function handleMessageEnd(
     text: ctx.stripBlockTags(rawText, { thinking: false, final: false }),
     messagingToolSentTexts: ctx.state.messagingToolSentTexts,
   });
-  const streamedReasoningFallback =
-    ctx.state.lastObservedReasoning || extractThinkingFromTaggedStream(ctx.state.deltaBuffer);
   const rawThinking =
     ctx.state.includeReasoning || ctx.state.streamReasoning
       ? extractAssistantThinking(assistantMessage) ||
-        streamedReasoningFallback ||
+        extractThinkingFromTaggedStream(ctx.state.deltaBuffer) ||
         extractThinkingFromTaggedText(rawText)
       : "";
   const formattedReasoning = rawThinking ? formatReasoningMessage(rawThinking) : "";
diff --git a/src/agents/pi-embedded-subscribe.handlers.types.ts b/src/agents/pi-embedded-subscribe.handlers.types.ts
index 948c4348a0..d5c725528c 100644
--- a/src/agents/pi-embedded-subscribe.handlers.types.ts
+++ b/src/agents/pi-embedded-subscribe.handlers.types.ts
@@ -51,7 +51,6 @@ export type EmbeddedPiSubscribeState = {
   lastStreamedAssistantCleaned?: string;
   emittedAssistantUpdate: boolean;
   lastStreamedReasoning?: string;
-  lastObservedReasoning?: string;
   lastBlockReplyText?: string;
   reasoningStreamOpen: boolean;
   assistantMessageIndex: number;
diff --git a/src/agents/pi-embedded-subscribe.ts b/src/agents/pi-embedded-subscribe.ts
index 1d9916b2be..8e7a7fec29 100644
--- a/src/agents/pi-embedded-subscribe.ts
+++ b/src/agents/pi-embedded-subscribe.ts
@@ -54,7 +54,6 @@ export function subscribeEmbeddedPiSession(params: SubscribeEmbeddedPiSessionPar
     lastStreamedAssistantCleaned: undefined,
     emittedAssistantUpdate: false,
     lastStreamedReasoning: undefined,
-    lastObservedReasoning: undefined,
     lastBlockReplyText: undefined,
     reasoningStreamOpen: false,
     assistantMessageIndex: 0,
@@ -118,7 +117,6 @@ export function subscribeEmbeddedPiSession(params: SubscribeEmbeddedPiSessionPar
     state.emittedAssistantUpdate = false;
     state.lastBlockReplyText = undefined;
     state.lastStreamedReasoning = undefined;
-    state.lastObservedReasoning = undefined;
     state.lastReasoningSent = undefined;
     state.reasoningStreamOpen = false;
     state.suppressBlockChunks = false;