diff --git a/crates/agent_ui/src/agent_configuration.rs b/crates/agent_ui/src/agent_configuration.rs
index aa316ba7c5efe5f679764cd7d4626a1f1310e4c6..46f92bfb2cfd60158bfb7c7aae9c16f3d9184695 100644
--- a/crates/agent_ui/src/agent_configuration.rs
+++ b/crates/agent_ui/src/agent_configuration.rs
@@ -228,6 +228,7 @@ impl AgentConfiguration {
             .unwrap_or(false);
 
         v_flex()
+            .min_w_0()
             .w_full()
             .when(is_expanded, |this| this.mb_2())
             .child(
@@ -312,6 +313,7 @@ impl AgentConfiguration {
             )
             .child(
                 v_flex()
+                    .min_w_0()
                     .w_full()
                     .px_2()
                     .gap_1()
@@ -459,6 +461,7 @@ impl AgentConfiguration {
             });
 
         v_flex()
+            .min_w_0()
             .w_full()
             .child(self.render_section_title(
                 "LLM Providers",
@@ -559,6 +562,7 @@ impl AgentConfiguration {
             });
 
         v_flex()
+            .min_w_0()
             .border_b_1()
             .border_color(cx.theme().colors().border)
             .child(self.render_section_title(
@@ -802,9 +806,12 @@ impl AgentConfiguration {
             });
 
         v_flex()
+            .min_w_0()
             .id(item_id.clone())
             .child(
                 h_flex()
+                    .min_w_0()
+                    .w_full()
                     .justify_between()
                     .child(
                         h_flex()
@@ -820,13 +827,13 @@ impl AgentConfiguration {
                                     .tooltip(Tooltip::text(tooltip_text))
                                     .child(status_indicator),
                             )
-                            .child(Label::new(item_id).truncate())
+                            .child(Label::new(item_id).flex_shrink_0().truncate())
                             .child(
                                 div()
                                     .id("extension-source")
+                                    .min_w_0()
                                     .mt_0p5()
                                     .mx_1()
-                                    .flex_none()
                                     .tooltip(Tooltip::text(source_tooltip))
                                     .child(
                                         Icon::new(source_icon)
@@ -1019,6 +1026,7 @@ impl AgentConfiguration {
             });
 
         v_flex()
+            .min_w_0()
             .border_b_1()
             .border_color(cx.theme().colors().border)
             .child(
@@ -1217,6 +1225,7 @@ impl Render for AgentConfiguration {
                             .id("assistant-configuration-content")
                             .track_scroll(&self.scroll_handle)
                             .size_full()
+                            .min_w_0()
                             .overflow_y_scroll()
                             .child(self.render_agent_servers_section(cx))
                             .child(self.render_context_servers_section(window, cx))
diff --git a/crates/agent_ui/src/agent_panel.rs b/crates/agent_ui/src/agent_panel.rs
index 50346bd752cec4432fb5a87e4df7cb4ce09aca83..1aefc99c020409a764ad2c44fe8477665f73c4bc 100644
--- a/crates/agent_ui/src/agent_panel.rs
+++ b/crates/agent_ui/src/agent_panel.rs
@@ -4131,7 +4131,10 @@ impl AgentPanel {
             ActiveView::History { .. } | ActiveView::Configuration
         );
 
-        let use_v2_empty_toolbar = has_v2_flag && is_empty_state && !is_in_history_or_config;
+        let is_text_thread = matches!(&self.active_view, ActiveView::TextThread { .. });
+
+        let use_v2_empty_toolbar =
+            has_v2_flag && is_empty_state && !is_in_history_or_config && !is_text_thread;
 
         let is_sidebar_open = self
             .sidebar
diff --git a/crates/agent_ui/src/sidebar.rs b/crates/agent_ui/src/sidebar.rs
index e36cb750b4a74dc8d749501eed07941cd30c7b6f..595366dd0484254ed641e69713b519199547e8e3 100644
--- a/crates/agent_ui/src/sidebar.rs
+++ b/crates/agent_ui/src/sidebar.rs
@@ -1250,7 +1250,7 @@ impl Sidebar {
             .focused(is_selected)
             .child(
                 h_flex()
-                    .p_1()
+                    .py_1()
                     .gap_1p5()
                     .child(Icon::new(icon).size(IconSize::Small).color(Color::Muted))
                     .child(Label::new(label).color(Color::Muted))
diff --git a/crates/ui/src/components/chip.rs b/crates/ui/src/components/chip.rs
index ce709fe3962f742f5208808315f3bdac09c1f513..06dc7e6afa6fa8723985913dfece4205e360511e 100644
--- a/crates/ui/src/components/chip.rs
+++ b/crates/ui/src/components/chip.rs
@@ -81,8 +81,7 @@ impl RenderOnce for Chip {
 
         h_flex()
             .when_some(self.height, |this, h| this.h(h))
-            .min_w_0()
-            .flex_initial()
+            .flex_none()
             .px_1()
             .border_1()
             .rounded_sm()
diff --git a/crates/ui/src/components/label/label.rs b/crates/ui/src/components/label/label.rs
index d0f50c00336eb971621e2da7bbaf53cf09569caa..405948ea06c7e86fcb3dec217186596bdaaf0aeb 100644
--- a/crates/ui/src/components/label/label.rs
+++ b/crates/ui/src/components/label/label.rs
@@ -73,6 +73,34 @@ impl Label {
     gpui::margin_style_methods!({
         visibility: pub
     });
+
+    pub fn flex_1(mut self) -> Self {
+        self.style().flex_grow = Some(1.);
+        self.style().flex_shrink = Some(1.);
+        self.style().flex_basis = Some(gpui::relative(0.).into());
+        self
+    }
+
+    pub fn flex_none(mut self) -> Self {
+        self.style().flex_grow = Some(0.);
+        self.style().flex_shrink = Some(0.);
+        self
+    }
+
+    pub fn flex_grow(mut self) -> Self {
+        self.style().flex_grow = Some(1.);
+        self
+    }
+
+    pub fn flex_shrink(mut self) -> Self {
+        self.style().flex_shrink = Some(1.);
+        self
+    }
+
+    pub fn flex_shrink_0(mut self) -> Self {
+        self.style().flex_shrink = Some(0.);
+        self
+    }
 }
 
 impl LabelCommon for Label {