diff --git a/backend/app/llm.py b/backend/app/llm.py
index 348c45c..c58c9c7 100644
--- a/backend/app/llm.py
+++ b/backend/app/llm.py
@@ -106,11 +106,13 @@ class LLMClient:
         max_tokens: int = 3000,
         thinking: bool = True,
     ) -> str:
-        extra_body = None
-        if not thinking:
-            # Qwen3-style thinking models: disable chain-of-thought to cut latency
-            # (measured 313s -> 44s per persona on the local tabbyAPI server).
-            extra_body = {"enable_thinking": False}
+        # Always keep reasoning SEPARATE (llama.cpp: enable_thinking=true puts it in
+        # reasoning_content, content stays clean). Omitting the field or false makes
+        # the model write the chain inline into content — which corrupts JSON
+        # responses ("Unterminated string" live 500) and persona parsing. The
+        # `thinking` param is retained for API compatibility; on this provider the
+        # mode is always "separated".
+        extra_body = {"enable_thinking": True}
         try:
             resp = self._create(
                 model=self.model,
@@ -181,12 +183,14 @@ class LLMClient:
                 mapped = "user"
             api_messages.append({"role": mapped, "content": m.get("text") or m.get("content") or ""})
         try:
+            # enable_thinking=true keeps the model's reasoning in reasoning_content
+            # so the reply text stays clean (see complete()).
             resp = self._create(
                 model=self.model,
                 temperature=temperature,
                 max_tokens=max_tokens,
                 messages=api_messages,
-                extra_body=None,
+                extra_body={"enable_thinking": True},
             )
         except Exception as exc:
             raise LLMError(f"LLM call failed: {exc}") from exc
diff --git a/backend/app/services/persona_generator.py b/backend/app/services/persona_generator.py
index 9b061e3..231c252 100644
--- a/backend/app/services/persona_generator.py
+++ b/backend/app/services/persona_generator.py
@@ -1,6 +1,6 @@
 """Persona generator: builds 15 personas (5 per tier) from a Sales Kit + scenario.
 
-Generation is split into ONE persona per LLM call (thinking disabled) so each call
+Generation is split into ONE persona per LLM call (reasoning kept separate) so each call
 finishes well under the Cloudflare 120s proxy timeout that kills the single 15-persona
 call.  The 15 calls run in a small thread pool (the local LLM tolerates a few
 concurrent requests) to cut total wall-clock time.
diff --git a/backend/app/services/simulator.py b/backend/app/services/simulator.py
index 1d30a7a..5d842b0 100644
--- a/backend/app/services/simulator.py
+++ b/backend/app/services/simulator.py
@@ -248,9 +248,9 @@ class Simulator:
                     "role": "system",
                     "content": "Contract correction: output one JSON object with a non-empty string field named reply. Do not include analysis or extra prose.",
                 })
-            # NOTE: the Qwen GGUF reasons internally before answering (the llama.cpp
-            # endpoint ignores enable_thinking), so the hidden reasoning consumes part
-            # of the budget — 400 starved it (content=''). 1200 fits reasoning + reply.
+            # NOTE: the Qwen GGUF reasons internally before answering. We keep that
+            # reasoning in a separate field (enable_thinking=true), so content stays
+            # clean — 400 starved the reply (content=''). 1200 fits reply headroom.
             resp = self.llm.complete_conversation(msgs, temperature=0.7, max_tokens=1200)
             parsed = self._parse_persona_reply(resp)
             if parsed is not None:
diff --git a/backend/tests/test_llm_budgets.py b/backend/tests/test_llm_budgets.py
index f625638..4899755 100644
--- a/backend/tests/test_llm_budgets.py
+++ b/backend/tests/test_llm_budgets.py
@@ -1,8 +1,8 @@
-"""Budget guard: the Qwen GGUF reasons internally (hidden thinking) before the
-visible answer, and llama.cpp's endpoint ignores enable_thinking — so the hidden
-reasoning consumes part of the token budget. If a budget is too small, the call
-returns HTTP 200 with content='' → LLMError → "LLM service unavailable" (the 2026-10-02
-live incident: persona_reply at 400 tokens, judge JSON at 800).
+"""Budget guard: the Qwen GGUF reasons internally (hidden thinking, kept in a
+separate field via enable_thinking=true) before the visible answer. If a budget is
+too small, the reply has no headroom and the call can return content='' → LLMError
+→ "LLM service unavailable" (2026-10-02 live incident: persona_reply at 400 tokens,
+judge JSON at 800).
 
 These tests pin the budgets so an "optimization" back to the small values fails loudly
 instead of silently re-breaking chat.
diff --git a/backend/tests/test_llm_enable_thinking.py b/backend/tests/test_llm_enable_thinking.py
new file mode 100644
index 0000000..ec3fdd3
--- /dev/null
+++ b/backend/tests/test_llm_enable_thinking.py
@@ -0,0 +1,66 @@
+"""The llama.cpp endpoint writes the model's hidden reasoning INLINE into
+`content` UNLESS `enable_thinking` is sent as `true` — which relocates it to the
+separate `reasoning_content` field and keeps `content` clean.
+
+Omitting the field (or sending false) corrupts every JSON response with inline
+thinking: the live 2026-10-02 500 was `LLM returned invalid JSON:
+Unterminated string` and persona generation was failing for the same reason.
+
+These tests pin the flag so a future edit that drops it fails loudly.
+"""
+from __future__ import annotations
+
+import app.llm as llm_mod
+from app.llm import LLMClient
+
+
+def _make_client() -> LLMClient:
+    c = LLMClient(base_url="http://localhost:9/v1", api_key="test-key", model="m")
+    c.max_attempts = 1
+    c.retry_delay = 0.0
+    return c
+
+
+def _resp(content: str = '{"ok": 1}'):
+    message = type("M", (), {"content": content})()
+    choice = type("C", (), {"message": message})()
+    return type("R", (), {"choices": [choice]})()
+
+
+def test_complete_always_sends_enable_thinking_true(monkeypatch):
+    c = _make_client()
+    seen: dict = {}
+
+    def spy(**kwargs):
+        seen["extra_body"] = kwargs.get("extra_body")
+        return _resp()
+
+    c.client.chat.completions.create = spy
+    c.complete("sys", "user")
+    assert seen["extra_body"] == {"enable_thinking": True}
+
+
+def test_complete_json_always_sends_enable_thinking_true(monkeypatch):
+    c = _make_client()
+    seen: dict = {}
+
+    def spy(**kwargs):
+        seen["extra_body"] = kwargs.get("extra_body")
+        return _resp('{"mood": 1}')
+
+    c.client.chat.completions.create = spy
+    c.complete_json("sys", "user")
+    assert seen["extra_body"] == {"enable_thinking": True}
+
+
+def test_complete_conversation_always_sends_enable_thinking_true(monkeypatch):
+    c = _make_client()
+    seen: dict = {}
+
+    def spy(**kwargs):
+        seen["extra_body"] = kwargs.get("extra_body")
+        return _resp("สวัสดีค่ะ")
+
+    c.client.chat.completions.create = spy
+    c.complete_conversation([{"role": "seller", "text": "hi"}])
+    assert seen["extra_body"] == {"enable_thinking": True}
diff --git a/docs/HANDOFF.md b/docs/HANDOFF.md
index 6b70397..6b6e5b3 100644
--- a/docs/HANDOFF.md
+++ b/docs/HANDOFF.md
@@ -242,6 +242,13 @@ cd backend && uv run python run.py        # Flask :5001
 - `docs/engineering-log/2026-08-15-s4-3-offline-dialect-remediation.md` — offline Alembic dialect finding, test-first fix, verification, and pending review.
 - `docs/engineering-log/2026-08-16-s4-4-importer-errorhandler-commit.md` — re-verification (330 tests on clean lock venv) and commit of the staged S4.4 importer + error-handler hardening increment.
 
+## 2026-10-02 live 500 #3 — hidden reasoning written INLINE into content
+- Symptom: `LLM returned invalid JSON: Unterminated string (char 143)` — the budget fix (c5553eb) was whack-a-mole; bigger budget only moves empty→truncated JSON.
+- Root cause (live probes): llama.cpp endpoint writes the model's hidden reasoning INLINE into `content` UNLESS `enable_thinking: true` is sent (which moves it to `reasoning_content`). The app was sending the field absent (`extra_body=None`). Same root cause as the earlier persona-generation failures.
+- Fix: `llm.py` always sends `enable_thinking: true` on all three call paths (`complete`/`complete_json`/`complete_conversation`). `tests/test_llm_enable_thinking.py` pins it. **543 passed.**
+- Server-side `--reasoning-format none` = speed only now (latency), correctness already fixed.
+- Evidence: `docs/engineering-log/2026-10-02-enable-thinking-inline-root-cause.md`.
+
 ## 2026-10-02 live "LLM service unavailable" — root cause + fix in review
 - Symptom: live chat 500 `LLM service unavailable` while llama.cpp log shows the model generating (two 400-token tasks = the two `persona_reply` attempts, all hidden reasoning).
 - Root cause (live probes): Qwen3.8-27B GGUF reasons internally; llama.cpp ignores `enable_thinking` → hidden reasoning eats `max_tokens` → HTTP 200 `content=''` → `LLMError`. `persona_reply` (400) crashed the 500; `evaluate_turn` judge (800) silently degraded to `pending` (buying customers never closed the session).
diff --git a/docs/engineering-log/2026-10-02-enable-thinking-inline-root-cause.md b/docs/engineering-log/2026-10-02-enable-thinking-inline-root-cause.md
new file mode 100644
index 0000000..8baf3e1
--- /dev/null
+++ b/docs/engineering-log/2026-10-02-enable-thinking-inline-root-cause.md
@@ -0,0 +1,37 @@
+# 2026-10-02 — 500 "invalid JSON: Unterminated string": hidden reasoning inline in content
+
+## Symptom
+After the budget fix (c5553eb): live `POST /api/chat/.../send` → 500
+`LLM returned invalid JSON: Unterminated string starting at: line 5 column 10 (char 143)`.
+The budget-raise was whack-a-mole: bigger budget just moves the failure from
+`content=''` to `truncated JSON`.
+
+## Diagnosis (live probes vs pchome.moreminimore.com/v1, model mia-qwen38-3.0bpw)
+The llama.cpp endpoint has a hidden-thinking field, and the app must tell it to use it:
+
+| `enable_thinking` sent | content | reasoning location |
+|---|---|---|
+| **absent** (what app sent: `extra_body=None`) | `17×24=...408  {"result":408}` | **inline in content** (+ reasoning_content field) |
+| `false` | inline in content | inline |
+| `true` | `{"result":408}` — clean | `reasoning_content` field |
+
+Consequences of the inline form (what the app had been living with):
+- `complete_json` last-ditch regex grabs a corrupted span → `Unterminated string` → 500 (this incident)
+- `persona_generator` (persona JSON) → persona generation fails (the "สร้าง persona ไม่ได้" incident, same root cause)
+- persona reply (chat) → reply text bloated with reasoning chain (the 21562-byte 200)
+
+## Fix (this commit)
+`llm.py`: `complete()`, `complete_json()` (via complete), and `complete_conversation()`
+**always send `extra_body={"enable_thinking": True}`** — relocates hidden reasoning into
+`reasoning_content`, `content` stays clean. The `thinking` param is retained for API
+compatibility but is a no-op on this provider (always separated).
+`tests/test_llm_enable_thinking.py` pins the flag on all three call paths.
+
+## Why not just a bigger budget
+Budget raises only delay the corruption (empty → truncated → eventually clean); the
+inline reasoning format is the actual bug. Separation fixes the judge 500, persona
+JSON, and persona reply text at once.
+
+## Server-side (speed, optional — owner)
+`--reasoning-format none` (or no-think template) still removes the reasoning compute
+entirely → latency goes back to ~5s. Not required for correctness.
diff --git a/plan.md b/plan.md
index fb9fd6a..01c1e23 100644
--- a/plan.md
+++ b/plan.md
@@ -1,16 +1,16 @@
 # Sales Trainer — Current Execution Plan
 
 ## Status
-Complete. Implementation, local verification, and independent review are all closed. No commit, push, deploy, or live-provider testing.
+Live-incident fix in independent review. `llm.py` now always sends `enable_thinking: true` so hidden reasoning goes to `reasoning_content` (not inline in content, which was corrupting JSON → 500 + persona failures). 543 passed locally; reviewer verdict pending.
 
 ## Current phase / active task
-Complete. All implementation, local verification, and independent review closed. Awaiting owner approval for commit/push/deploy (CON-003).
+Live-incident #3 (after budget fix c5553eb) — `LLM returned invalid JSON: Unterminated string (char 143)`. Root cause: llama.cpp writes hidden reasoning inline into `content` unless `enable_thinking: true` is sent. Fix: always send the flag on all three call paths. Independent review in progress.
 
 ## Last update
-2026-10-02. Project requirements reconciled from the latest owner instruction in `project.md`. Legacy architecture and security context reviewed in `docs/plan.md`, `docs/HANDOFF.md`, and `docs/engineering-log/2026-08-24-training-security-review.md`.
+2026-10-02. Live incident #3 fix implemented (enable_thinking), 543 tests green, docs updated, independent reviewer dispatched (deleg_a60a1a2e).
 
 ## Next action
-None in scope. Awaiting owner approval for commit/push/deploy (CON-003). No further implementation work.
+Await independent reviewer verdict → commit + push (owner approval per CON-003) → EasyPanel auto-deploy → live verify chat send returns 200 and judge returns real outcomes.
 
 ## Blockers
 None known. Do not commit, push, or deploy. Do not access `.env` or production data.