diff --git a/apps/code/src/renderer/features/message-editor/utils/content.test.ts b/apps/code/src/renderer/features/message-editor/utils/content.test.ts
index 825dd20ef..beb226b2b 100644
--- a/apps/code/src/renderer/features/message-editor/utils/content.test.ts
+++ b/apps/code/src/renderer/features/message-editor/utils/content.test.ts
@@ -4,6 +4,7 @@ import {
   type EditorContent,
   extractFilePaths,
   xmlToContent,
+  xmlToPlainText,
 } from "./content";
 
 describe("xmlToContent", () => {
@@ -196,6 +197,49 @@ describe("xmlToContent", () => {
     expect(extractFilePaths(content)).toEqual(["src/sub", "src/a.ts"]);
   });
 
+  it("xmlToPlainText renders folder mentions as @mentions", () => {
+    expect(
+      xmlToPlainText('look at <folder path="products/agentic_tests" /> please'),
+    ).toBe("look at @products/agentic_tests please");
+  });
+
+  it("xmlToPlainText renders file mentions as @mentions", () => {
+    expect(
+      xmlToPlainText('see <file path="src/foo/bar.ts" /> for details'),
+    ).toBe("see @foo/bar.ts for details");
+  });
+
+  it("xmlToPlainText renders structured chip types as @label", () => {
+    expect(
+      xmlToPlainText(
+        'investigate <error id="err-1" /> and <feature_flag id="flag-2" />',
+      ),
+    ).toBe("investigate @err-1 and @flag-2");
+  });
+
+  it("xmlToPlainText leaves plain text untouched", () => {
+    expect(xmlToPlainText("ship the fix")).toBe("ship the fix");
+  });
+
+  it("xmlToPlainText renders github_pr and github_issue mentions", () => {
+    expect(
+      xmlToPlainText(
+        '<github_pr number="42" title="Add login" url="https://github.com/x/y/pull/42" />',
+      ),
+    ).toBe("@#42 - Add login");
+    expect(
+      xmlToPlainText(
+        '<github_issue number="7" title="" url="https://github.com/x/y/issues/7" />',
+      ),
+    ).toBe("@#7");
+  });
+
+  it("xmlToPlainText passes through non-chip XML-like text", () => {
+    expect(xmlToPlainText("use Array<string> and <div> tags")).toBe(
+      "use Array<string> and <div> tags",
+    );
+  });
+
   it("round-trips contentToXml for a mix of text and chips", () => {
     const content: EditorContent = {
       segments: [
diff --git a/apps/code/src/renderer/features/message-editor/utils/content.ts b/apps/code/src/renderer/features/message-editor/utils/content.ts
index 5207e5547..1b65fc612 100644
--- a/apps/code/src/renderer/features/message-editor/utils/content.ts
+++ b/apps/code/src/renderer/features/message-editor/utils/content.ts
@@ -169,6 +169,10 @@ export function xmlToContent(xml: string): EditorContent {
   return { segments };
 }
 
+export function xmlToPlainText(xml: string): string {
+  return contentToPlainText(xmlToContent(xml));
+}
+
 export function isContentEmpty(
   content: EditorContent | null | string,
 ): boolean {
diff --git a/apps/code/src/renderer/sagas/task/task-creation.test.ts b/apps/code/src/renderer/sagas/task/task-creation.test.ts
index faa63d59d..79961b7a1 100644
--- a/apps/code/src/renderer/sagas/task/task-creation.test.ts
+++ b/apps/code/src/renderer/sagas/task/task-creation.test.ts
@@ -51,10 +51,6 @@ vi.mock("@features/sessions/service/service", () => ({
   }),
 }));
 
-vi.mock("@renderer/utils/generateTitle", () => ({
-  createFileTagRegex: () => /<file\s+path="([^"]+)"\s*\/>/g,
-}));
-
 vi.mock("@utils/logger", () => ({
   logger: {
     scope: () => ({
@@ -409,7 +405,7 @@ describe("TaskCreationSaga", () => {
     );
   });
 
-  it("sets fallback title when description is attachment-only", async () => {
+  it("renders attachment-only description as @mention title", async () => {
     const createdTask = createTask();
     const startedTask = createTask({ latest_run: createRun() });
     const createTaskMock = vi.fn().mockResolvedValue(createdTask);
@@ -430,7 +426,6 @@ describe("TaskCreationSaga", () => {
 
     await saga.run({
       taskDescription: '<file path="/tmp/code.ts" />',
-      content: '<file path="/tmp/code.ts" />',
       repository: "posthog/posthog",
       workspaceMode: "cloud",
       branch: "main",
@@ -438,12 +433,77 @@ describe("TaskCreationSaga", () => {
 
     expect(createTaskMock).toHaveBeenCalledWith(
       expect.objectContaining({
-        title: "Reading attachment\u2026",
+        title: "@tmp/code.ts",
         description: '<file path="/tmp/code.ts" />',
       }),
     );
   });
 
+  it("falls back to Untitled when description is empty", async () => {
+    const createdTask = createTask();
+    const startedTask = createTask({ latest_run: createRun() });
+    const createTaskMock = vi.fn().mockResolvedValue(createdTask);
+    const createTaskRunMock = vi.fn().mockResolvedValue(createRun());
+    const startTaskRunMock = vi.fn().mockResolvedValue(startedTask);
+
+    const saga = new TaskCreationSaga({
+      posthogClient: {
+        createTask: createTaskMock,
+        deleteTask: vi.fn(),
+        getTask: vi.fn(),
+        createTaskRun: createTaskRunMock,
+        startTaskRun: startTaskRunMock,
+        sendRunCommand: vi.fn(),
+        updateTask: vi.fn(),
+      } as never,
+    });
+
+    await saga.run({
+      content: "   ",
+      repository: "posthog/posthog",
+      workspaceMode: "cloud",
+      branch: "main",
+    });
+
+    expect(createTaskMock).toHaveBeenCalledWith(
+      expect.objectContaining({ title: "Untitled" }),
+    );
+  });
+
+  it("renders folder mentions as readable @mention in title", async () => {
+    const createdTask = createTask();
+    const startedTask = createTask({ latest_run: createRun() });
+    const createTaskMock = vi.fn().mockResolvedValue(createdTask);
+    const createTaskRunMock = vi.fn().mockResolvedValue(createRun());
+    const startTaskRunMock = vi.fn().mockResolvedValue(startedTask);
+
+    const saga = new TaskCreationSaga({
+      posthogClient: {
+        createTask: createTaskMock,
+        deleteTask: vi.fn(),
+        getTask: vi.fn(),
+        createTaskRun: createTaskRunMock,
+        startTaskRun: startTaskRunMock,
+        sendRunCommand: vi.fn(),
+        updateTask: vi.fn(),
+      } as never,
+    });
+
+    await saga.run({
+      content:
+        'look at <folder path="products/agentic_tests" /> and tell me what you see',
+      repository: "posthog/posthog",
+      workspaceMode: "cloud",
+      branch: "main",
+    });
+
+    expect(createTaskMock).toHaveBeenCalledWith(
+      expect.objectContaining({
+        title: "look at @products/agentic_tests and tell me what you see",
+      }),
+    );
+  });
+
   it("truncates title to 255 chars", async () => {
     const longText = "x".repeat(300);
     const createdTask = createTask();
diff --git a/apps/code/src/renderer/sagas/task/task-creation.ts b/apps/code/src/renderer/sagas/task/task-creation.ts
index 789b91ea9..582c0b94a 100644
--- a/apps/code/src/renderer/sagas/task/task-creation.ts
+++ b/apps/code/src/renderer/sagas/task/task-creation.ts
@@ -1,4 +1,5 @@
 import { buildPromptBlocks } from "@features/editor/utils/prompt-builder";
+import { xmlToPlainText } from "@features/message-editor/utils/content";
 import { DEFAULT_PANEL_IDS } from "@features/panels/constants/panelConstants";
 import { usePanelLayoutStore } from "@features/panels/store/panelLayoutStore";
 import { useProvisioningStore } from "@features/provisioning/stores/provisioningStore";
@@ -18,7 +19,6 @@ import type {
 import { Saga, type SagaLogger } from "@posthog/shared";
 import type { PostHogAPIClient } from "@renderer/api/posthogClient";
 import { trpcClient } from "@renderer/trpc";
-import { createFileTagRegex } from "@renderer/utils/generateTitle";
 import { getTaskRepository } from "@renderer/utils/repository";
 import {
   type ExecutionMode,
@@ -401,9 +401,9 @@ export class TaskCreationSaga extends Saga<
       name: "task_creation",
       execute: async () => {
         const description = input.taskDescription ?? input.content ?? "";
-        const plainText = description.replace(createFileTagRegex(), "").trim();
+        const plainText = xmlToPlainText(description).trim();
         const result = await this.deps.posthogClient.createTask({
-          title: (plainText || "Reading attachment\u2026").slice(0, 255),
+          title: (plainText || "Untitled").slice(0, 255),
           description,
           repository: repository ?? undefined,
           github_integration:
diff --git a/apps/code/src/renderer/utils/generateTitle.test.ts b/apps/code/src/renderer/utils/generateTitle.test.ts
index 6ecd85605..6f0582226 100644
--- a/apps/code/src/renderer/utils/generateTitle.test.ts
+++ b/apps/code/src/renderer/utils/generateTitle.test.ts
@@ -135,6 +135,32 @@ describe("enrichDescriptionWithFileContent", () => {
     ]);
     expect(result).toBe("[Attached: image.jpg]\n\ntext content");
   });
+
+  it("returns description unchanged for folder-only input", async () => {
+    const description = '<folder path="src/components" />';
+    const result = await enrichDescriptionWithFileContent(description);
+    expect(result).toBe(description);
+    expect(mockReadAbsoluteFile).not.toHaveBeenCalled();
+  });
+
+  it("reads file and drops folder for mixed file+folder input", async () => {
+    mockReadAbsoluteFile.mockResolvedValue("file body");
+    const description =
+      '<file path="/tmp/a.ts" /><folder path="src/components" />';
+    const result = await enrichDescriptionWithFileContent(description);
+    expect(result).toBe("file body");
+    expect(mockReadAbsoluteFile).toHaveBeenCalledTimes(1);
+    expect(mockReadAbsoluteFile).toHaveBeenCalledWith({
+      filePath: "/tmp/a.ts",
+    });
+  });
+
+  it("treats non-chip XML-like text as real content", async () => {
+    const description = "<div>hello world</div>";
+    const result = await enrichDescriptionWithFileContent(description);
+    expect(result).toBe(description);
+    expect(mockReadAbsoluteFile).not.toHaveBeenCalled();
+  });
 });
 
 describe("generateTitleAndSummary", () => {
diff --git a/apps/code/src/renderer/utils/generateTitle.ts b/apps/code/src/renderer/utils/generateTitle.ts
index 3a3b3911a..c2f3b0fa9 100644
--- a/apps/code/src/renderer/utils/generateTitle.ts
+++ b/apps/code/src/renderer/utils/generateTitle.ts
@@ -1,10 +1,10 @@
 import { fetchAuthState } from "@features/auth/hooks/authQueries";
+import { xmlToContent } from "@features/message-editor/utils/content";
 import { trpcClient } from "@renderer/trpc";
 import { logger } from "@utils/logger";
 
 const log = logger.scope("title-generator");
 
-export const createFileTagRegex = () => /<file\s+path="([^"]+)"\s*\/>/g;
 const ATTACHED_FILES_REGEX = /^\[?Attached files:.*]?$/gm;
 const PASTED_TEXT_SNIPPET_LIMIT = 500;
 
@@ -55,18 +55,20 @@ export async function enrichDescriptionWithFileContent(
   description: string,
   filePaths: string[] = [],
 ): Promise<string> {
-  const stripped = description
-    .replace(createFileTagRegex(), "")
+  const parsed = xmlToContent(description);
+  const stripped = parsed.segments
+    .flatMap((seg) => (seg.type === "text" ? [seg.text] : []))
+    .join("")
     .replace(ATTACHED_FILES_REGEX, "")
     .replace(/^\d+\.\s*$/gm, "")
     .trim();
 
   if (stripped.length > 0) return description;
 
-  const paths =
-    filePaths.length > 0
-      ? filePaths
-      : [...description.matchAll(createFileTagRegex())].map((m) => m[1]);
+  const chipFilePaths = parsed.segments.flatMap((seg) =>
+    seg.type === "chip" && seg.chip.type === "file" ? [seg.chip.id] : [],
+  );
+  const paths = filePaths.length > 0 ? filePaths : chipFilePaths;
 
   if (paths.length === 0) return description;
 
@@ -76,13 +78,13 @@ export async function enrichDescriptionWithFileContent(
         return `[Attached: ${getFileName(filePath)}]`;
       }
       try {
-        const content = await trpcClient.fs.readAbsoluteFile.query({
+        const fileContent = await trpcClient.fs.readAbsoluteFile.query({
           filePath,
         });
-        if (content) {
-          return content.length > PASTED_TEXT_SNIPPET_LIMIT
-            ? content.slice(0, PASTED_TEXT_SNIPPET_LIMIT)
-            : content;
+        if (fileContent) {
+          return fileContent.length > PASTED_TEXT_SNIPPET_LIMIT
+            ? fileContent.slice(0, PASTED_TEXT_SNIPPET_LIMIT)
+            : fileContent;
         }
         return `[Attached: ${getFileName(filePath)}]`;
       } catch {