diff --git a/agent/agent_runtime_helpers.py b/agent/agent_runtime_helpers.py
index db0c48275cc8..36712ec48281 100644
--- a/agent/agent_runtime_helpers.py
+++ b/agent/agent_runtime_helpers.py
@@ -643,16 +643,16 @@ def strip_think_blocks(agent, content: str) -> str:
     """Remove reasoning/thinking blocks from content, returning only visible text.
 
     Handles four cases:
-      1. Closed tag pairs (`` 执教… ``) — the common path when
+      1. Closed tag pairs (`` <think>… ``) — the common path when
          the provider emits complete reasoning blocks.
       2. Unterminated open tag at a block boundary (start of text or
          after a newline) — e.g. MiniMax M2.7 / NIM endpoints where the
          closing tag is dropped.  Everything from the open tag to end
          of string is stripped.  The block-boundary check mirrors
          ``gateway/stream_consumer.py``'s filter so models that mention
-         `` 执教`` in prose aren't over-stripped.
+         `` <think>`` in prose aren't over-stripped.
       3. Stray orphan open/close tags that slip through.
-      4. Tag variants: `` 执教``, ``<thinking>``, ``<reasoning>``,
+      4. Tag variants: `` <think>``, ``<thinking>``, ``<reasoning>``,
          ``<REASONING_SCRATCHPAD>``, ``<thought>`` (Gemma 4), all
          case-insensitive.
 
@@ -670,21 +670,6 @@ def strip_think_blocks(agent, content: str) -> str:
     after punctuation and carries a ``name="..."`` attribute) so prose
     mentions like "Use <function> in JavaScript" are preserved.
     """
-    # Defensive coercion: callers may pass multimodal content-parts lists
-    # (e.g. after vision turns or context compaction). Extract any text
-    # blocks and drop non-text parts before running regexes.
-    if isinstance(content, list):
-        parts = []
-        for part in content:
-            if isinstance(part, str):
-                parts.append(part)
-            elif isinstance(part, dict) and part.get("type") == "text":
-                text = part.get("text")
-                if isinstance(text, str):
-                    parts.append(text)
-        content = "\n".join(parts)
-    elif not isinstance(content, str):
-        content = str(content) if content is not None else ""
     if not content:
         return ""
     # Coerce non-string content to text before any regex runs.  Providers
diff --git a/agent/conversation_loop.py b/agent/conversation_loop.py
index ffe114e15842..7a7e6bf33547 100644
--- a/agent/conversation_loop.py
+++ b/agent/conversation_loop.py
@@ -24,7 +24,6 @@ import re
 import ssl
 import threading
 import time
-import traceback
 import uuid
 from typing import Any, Dict, List, Optional
 
@@ -79,6 +78,25 @@ logger = logging.getLogger(__name__)
 # to treat it as cancellation metadata rather than assistant prose.
 INTERRUPT_WAITING_FOR_MODEL_PREFIX = "Operation interrupted: waiting for model response ("
 
+# Modules that indicate a deterministic local processing error when they
+# appear in an exception traceback WITHOUT any API-call module. Used by the
+# outer-loop error classifier to avoid retrying bugs that will fail
+# identically every time (e.g. TypeError from passing list content into a
+# regex helper).  IMPORTANT: do NOT include "conversation_loop" or
+# "run_agent" here — those are the container modules for the try/except
+# itself, so every exception passes through them, which would make
+# _hit_local always True and misclassify transient API/network errors as
+# non-retryable local bugs. (#66267)
+_LOCAL_PROCESSING_MODULES = frozenset({
+    "agent_runtime_helpers",
+    "message_content",
+    "message_sanitization",
+    "chat_completion_helpers",  # only local when NOT also an API-call module
+})
+_API_CALL_MODULES = frozenset({
+    "chat_completion_helpers",
+})
+
 
 def _image_error_max_dimension(error: Exception) -> Optional[int]:
     """Extract a provider-reported image dimension ceiling, if present."""
@@ -5609,23 +5627,15 @@ def run_conversation(
             # local post-processing helpers and never entered the interruptible
             # API-call helpers, it is almost certainly a local processing bug.
             # (#66267)
-            _local_processing_modules = {
-                "agent_runtime_helpers",
-                "conversation_loop",
-                "message_content",
-                "run_agent",
-            }
-            _api_call_modules = {
-                "chat_completion_helpers",
-            }
+            tb_module_names: set[str] = set()
+            _tb = e.__traceback__
+            while _tb is not None:
+                _fname = os.path.splitext(os.path.basename(_tb.tb_frame.f_code.co_filename))[0]
+                tb_module_names.add(_fname)
+                _tb = _tb.tb_next
 
-            tb_stack = traceback.extract_tb(e.__traceback__)
-            tb_module_names = {
-                os.path.splitext(os.path.basename(frame.filename))[0]
-                for frame in tb_stack
-            }
-            _hit_local = bool(tb_module_names & _local_processing_modules)
-            _hit_api = bool(tb_module_names & _api_call_modules)
+            _hit_local = bool(tb_module_names & _LOCAL_PROCESSING_MODULES)
+            _hit_api = bool(tb_module_names & _API_CALL_MODULES)
 
             _is_local_processing_error = _hit_local and not _hit_api