diff --git a/packages/adapter-utils/src/types.ts b/packages/adapter-utils/src/types.ts
index 60cf1279..5314f7b1 100644
--- a/packages/adapter-utils/src/types.ts
+++ b/packages/adapter-utils/src/types.ts
@@ -64,7 +64,7 @@ export interface AdapterRuntimeServiceReport {
   healthStatus?: "unknown" | "healthy" | "unhealthy";
 }
 
-export type AdapterExecutionErrorFamily = "transient_upstream";
+export type AdapterExecutionErrorFamily = "transient_upstream" | "model_refusal";
 
 export interface AdapterExecutionResult {
   exitCode: number | null;
diff --git a/packages/adapters/claude-local/src/server/execute.ts b/packages/adapters/claude-local/src/server/execute.ts
index a2656061..d238bbe6 100644
--- a/packages/adapters/claude-local/src/server/execute.ts
+++ b/packages/adapters/claude-local/src/server/execute.ts
@@ -52,6 +52,7 @@ import {
   detectClaudeLoginRequired,
   extractClaudeRetryNotBefore,
   isClaudeMaxTurnsResult,
+  isClaudeRefusalResult,
   isClaudeTransientUpstreamError,
   isClaudeUnknownSessionError,
   isClaudePoisonedPreviousMessageIdError,
@@ -877,6 +878,10 @@ export async function execute(ctx: AdapterExecutionContext): Promise<AdapterExec
       (asString(parsed.session_id, opts.fallbackSessionId ?? "") || opts.fallbackSessionId);
     const clearSessionForMaxTurns = isClaudeMaxTurnsResult(parsed);
     const poisonedPreviousMessageId = isClaudePoisonedPreviousMessageIdError(parsed);
+    // Fable 5 policy refusals exit cleanly (exitCode=0, is_error=false), so this
+    // is intentionally independent of `failed` — otherwise a refusal looks like a
+    // successful run to Paperclip and the heartbeat stalls silently. See RY-604.
+    const claudeRefusal = isClaudeRefusalResult(parsed);
     const parsedIsError = asBoolean(parsed.is_error, false);
     const failed = (proc.exitCode ?? 0) !== 0 || parsedIsError;
     // Validate-before-persist guard: never persist a sessionId whose transcript
@@ -933,11 +938,14 @@ export async function execute(ctx: AdapterExecutionContext): Promise<AdapterExec
       ? "claude_poisoned_previous_message_id"
       : transientUpstream
       ? "claude_transient_upstream"
+      : claudeRefusal
+      ? "claude_refusal"
       : null;
     const mergedResultJson: Record<string, unknown> = {
       ...parsed,
       ...(failed && clearSessionForMaxTurns ? { stopReason: "max_turns_exhausted" } : {}),
       ...(failed && poisonedPreviousMessageId ? { stopReason: "claude_poisoned_previous_message_id" } : {}),
+      ...(claudeRefusal ? { stopReason: "refusal", errorFamily: "model_refusal" } : {}),
       ...(transientUpstream ? { errorFamily: "transient_upstream" } : {}),
       ...(transientRetryNotBefore ? { retryNotBefore: transientRetryNotBefore.toISOString() } : {}),
       ...(transientRetryNotBefore ? { transientRetryNotBefore: transientRetryNotBefore.toISOString() } : {}),
@@ -949,7 +957,11 @@ export async function execute(ctx: AdapterExecutionContext): Promise<AdapterExec
       timedOut: false,
       errorMessage,
       errorCode: resolvedErrorCode,
-      errorFamily: transientUpstream ? "transient_upstream" : null,
+      errorFamily: transientUpstream
+        ? "transient_upstream"
+        : claudeRefusal
+        ? "model_refusal"
+        : null,
       retryNotBefore: transientRetryNotBefore ? transientRetryNotBefore.toISOString() : null,
       errorMeta,
       usage,
diff --git a/packages/adapters/claude-local/src/server/index.ts b/packages/adapters/claude-local/src/server/index.ts
index e55a65cd..1529033d 100644
--- a/packages/adapters/claude-local/src/server/index.ts
+++ b/packages/adapters/claude-local/src/server/index.ts
@@ -6,6 +6,7 @@ export {
   parseClaudeStreamJson,
   describeClaudeFailure,
   isClaudeMaxTurnsResult,
+  isClaudeRefusalResult,
   isClaudeUnknownSessionError,
 } from "./parse.js";
 export {
diff --git a/packages/adapters/claude-local/src/server/parse.test.ts b/packages/adapters/claude-local/src/server/parse.test.ts
index 0b79edb0..e197f46c 100644
--- a/packages/adapters/claude-local/src/server/parse.test.ts
+++ b/packages/adapters/claude-local/src/server/parse.test.ts
@@ -3,6 +3,7 @@ import {
   extractClaudeRetryNotBefore,
   isClaudeTransientUpstreamError,
   isClaudePoisonedPreviousMessageIdError,
+  isClaudeRefusalResult,
   isClaudeUnknownSessionError,
   isClaudeImageProcessingError,
 } from "./parse.js";
@@ -146,6 +147,55 @@ describe("isClaudePoisonedPreviousMessageIdError", () => {
   });
 });
 
+describe("isClaudeRefusalResult", () => {
+  it("detects stop_reason: refusal even on a clean (is_error=false) result", () => {
+    expect(
+      isClaudeRefusalResult({
+        type: "result",
+        subtype: "success",
+        is_error: false,
+        stop_reason: "refusal",
+        result: "",
+      }),
+    ).toBe(true);
+  });
+
+  it("detects the camelCase stopReason variant", () => {
+    expect(isClaudeRefusalResult({ stopReason: "refusal" })).toBe(true);
+  });
+
+  it("detects subtype: model_refusal", () => {
+    expect(
+      isClaudeRefusalResult({ subtype: "model_refusal", is_error: false }),
+    ).toBe(true);
+  });
+
+  it("is case-insensitive and tolerant of surrounding whitespace", () => {
+    expect(isClaudeRefusalResult({ stop_reason: "  Refusal " })).toBe(true);
+  });
+
+  it("returns false for ordinary successful turns", () => {
+    expect(
+      isClaudeRefusalResult({
+        subtype: "success",
+        is_error: false,
+        stop_reason: "end_turn",
+        result: "Here is your answer.",
+      }),
+    ).toBe(false);
+  });
+
+  it("returns false for max-turns and other stop reasons", () => {
+    expect(isClaudeRefusalResult({ stop_reason: "max_turns" })).toBe(false);
+    expect(isClaudeRefusalResult({ subtype: "error_max_turns" })).toBe(false);
+  });
+
+  it("returns false for null/empty parsed result", () => {
+    expect(isClaudeRefusalResult(null)).toBe(false);
+    expect(isClaudeRefusalResult({})).toBe(false);
+  });
+});
+
 describe("isClaudeUnknownSessionError", () => {
   it("detects the legacy 'no conversation found' message", () => {
     expect(
diff --git a/packages/adapters/claude-local/src/server/parse.ts b/packages/adapters/claude-local/src/server/parse.ts
index fbf66f79..14c85534 100644
--- a/packages/adapters/claude-local/src/server/parse.ts
+++ b/packages/adapters/claude-local/src/server/parse.ts
@@ -185,6 +185,24 @@ export function isClaudeMaxTurnsResult(parsed: Record<string, unknown> | null |
   );
 }
 
+export function isClaudeRefusalResult(parsed: Record<string, unknown> | null | undefined): boolean {
+  if (!parsed) return false;
+
+  // A policy refusal exits the CLI cleanly (exitCode=0, is_error=false), so it
+  // must be detected from the structured fields rather than the failure flag.
+  const subtype = asString(parsed.subtype, "").trim().toLowerCase();
+  if (subtype === "model_refusal" || subtype === "refusal") return true;
+
+  const structuredStopReasons = [
+    parsed.stop_reason,
+    parsed.stopReason,
+    parsed.error_code,
+    parsed.errorCode,
+  ].map((value) => asString(value, "").trim().toLowerCase());
+
+  return structuredStopReasons.some((reason) => reason === "refusal");
+}
+
 export function isClaudeUnknownSessionError(parsed: Record<string, unknown>): boolean {
   const resultText = asString(parsed.result, "").trim();
   const allMessages = [resultText, ...extractClaudeErrorMessages(parsed)]