diff --git a/workspace-server/internal/handlers/platform_agent.go b/workspace-server/internal/handlers/platform_agent.go
index 0cb6d249..386cf266 100644
--- a/workspace-server/internal/handlers/platform_agent.go
+++ b/workspace-server/internal/handlers/platform_agent.go
@@ -360,7 +360,10 @@ func (h *WorkspaceHandler) ensureConciergeModel(ctx context.Context, workspaceID
 	// boot). Re-asserting on EVERY provision would silently revert the customer's
 	// pick — exactly the platform-overriding-customer violation the SSOT
 	// directive forbids.
-	if existing := readStoredModelSecret(ctx, workspaceID); existing != "" {
+	if existing, readErr := readStoredModelSecret(ctx, workspaceID); readErr != nil {
+		log.Printf("Provisioner: concierge %s MODEL read failed (failing closed, NOT seeding): %v", workspaceID, readErr)
+		return
+	} else if existing != "" {
 		return // explicit model already set; never overwrite the customer's choice
 	}
 
@@ -392,23 +395,39 @@ func (h *WorkspaceHandler) ensureConciergeModel(ctx context.Context, workspaceID
 	}
 }
 
-// readStoredModelSecret returns the decrypted MODEL workspace_secret, or "" when
-// none is stored (or on any read/decrypt error — treated as "unset" so a
-// transient miss re-seeds rather than wedges). Used by ensureConciergeModel to
-// decide seed-vs-respect.
-func readStoredModelSecret(ctx context.Context, workspaceID string) string {
+// readStoredModelSecret returns the decrypted MODEL workspace_secret.
+// The second return value distinguishes the three observed states so the caller
+// can fail closed rather than fail open on a transient error:
+//
+//   - (value, nil): a secret is stored and decrypted successfully → caller
+//     respects the existing model and skips the seed.
+//   - ("", nil): no row exists for this workspace/key → caller may re-seed
+//     safely (this is the fresh-boot / cleared-secret case).
+//   - ("", error): the row exists (or the read otherwise succeeded) but the
+//     decryption failed → caller MUST NOT treat this as "unset" and MUST NOT
+//     fall back to seeding the platform default. Returning "" without the
+//     error used to silently overwrite the customer's model pick if the
+//     secret store later recovered: the seed path would re-fire on the next
+//     provision and the customer's choice would be lost without any error
+//     surfaced. Sibling of core#3162 (which closed the same fail-open shape
+//     on readStoredProviderSecret).
+func readStoredModelSecret(ctx context.Context, workspaceID string) (string, error) {
 	var stored []byte
 	var version int
-	if err := db.DB.QueryRowContext(ctx,
+	err := db.DB.QueryRowContext(ctx,
 		`SELECT encrypted_value, encryption_version FROM workspace_secrets WHERE workspace_id = $1 AND key = 'MODEL'`,
-		workspaceID).Scan(&stored, &version); err != nil {
-		return ""
-	}
-	dec, err := crypto.DecryptVersioned(stored, version)
+		workspaceID).Scan(&stored, &version)
 	if err != nil {
-		return ""
+		if errors.Is(err, sql.ErrNoRows) {
+			return "", nil
+		}
+		return "", fmt.Errorf("readStoredModelSecret scan: %w", err)
 	}
-	return string(dec)
+	dec, derr := crypto.DecryptVersioned(stored, version)
+	if derr != nil {
+		return "", fmt.Errorf("readStoredModelSecret decrypt: %w", derr)
+	}
+	return string(dec), nil
 }
 
 // conciergeProvider is the provider-registry NAME the concierge's declared
diff --git a/workspace-server/internal/handlers/platform_agent_test.go b/workspace-server/internal/handlers/platform_agent_test.go
index f0379bde..55e1cd81 100644
--- a/workspace-server/internal/handlers/platform_agent_test.go
+++ b/workspace-server/internal/handlers/platform_agent_test.go
@@ -1140,3 +1140,94 @@ func TestEnsureConciergeProvider_FailsClosedOnReadError(t *testing.T) {
 		}
 	})
 }
+
+// TestEnsureConciergeModel_FailsClosedOnReadError is the sibling regression
+// gate for the MODEL half of the fail-open shape (paired with
+// TestEnsureConciergeProvider_FailsClosedOnReadError). Same shape as core#3162:
+// a transient decrypt/read error on an existing MODEL row used to be collapsed
+// into "" and treated as "unset", which would silently overwrite the customer's
+// model pick if the secret store later recovered (the seed path would re-fire
+// on the next provision and the customer's choice would be lost without any
+// error surfaced). The fix returns the error; ensureConciergeModel MUST fail
+// closed (return without seeding) so the next provision re-tries rather than
+// losing the customer's pick.
+func TestEnsureConciergeModel_FailsClosedOnReadError(t *testing.T) {
+	h := &WorkspaceHandler{}
+	const modelSelQuery = `SELECT encrypted_value, encryption_version FROM workspace_secrets WHERE workspace_id = \$1 AND key = 'MODEL'`
+	const secretInsert = `INSERT INTO workspace_secrets`
+
+	t.Run("decrypt error on existing MODEL row fails closed (does NOT seed default)", func(t *testing.T) {
+		mock := setupTestDB(t)
+		mock.ExpectQuery(modelSelQuery).WithArgs("ws-model-decrypt-fail").
+			WillReturnRows(sqlmock.NewRows([]string{"encrypted_value", "encryption_version"}).
+				AddRow([]byte("corrupt-ciphertext-that-cannot-be-decrypted"), 0))
+		// NO ExpectExec: the fail-closed path MUST NOT persist MODEL.
+
+		env := map[string]string{}
+		h.ensureConciergeModel(context.Background(), "ws-model-decrypt-fail", env)
+
+		if _, seeded := env["MODEL"]; seeded {
+			t.Errorf("transient decrypt error seeded MODEL=%q — would silently overwrite the customer's pick", env["MODEL"])
+		}
+		if _, seeded := env["MOLECULE_MODEL"]; seeded {
+			t.Errorf("transient decrypt error seeded MOLECULE_MODEL=%q", env["MOLECULE_MODEL"])
+		}
+		if err := mock.ExpectationsWereMet(); err != nil {
+			t.Errorf("unmet sqlmock expectations (a MODEL INSERT means the fail-closed path leaked): %v", err)
+		}
+	})
+
+	t.Run("db scan error (non-ErrNoRows) on MODEL fails closed", func(t *testing.T) {
+		mock := setupTestDB(t)
+		mock.ExpectQuery(modelSelQuery).WithArgs("ws-model-scan-fail").
+			WillReturnError(fmt.Errorf("connection refused"))
+		// NO ExpectExec: fail closed.
+
+		env := map[string]string{}
+		h.ensureConciergeModel(context.Background(), "ws-model-scan-fail", env)
+
+		if _, seeded := env["MODEL"]; seeded {
+			t.Errorf("DB scan error seeded MODEL=%q", env["MODEL"])
+		}
+		if err := mock.ExpectationsWereMet(); err != nil {
+			t.Errorf("unmet sqlmock expectations: %v", err)
+		}
+	})
+
+	t.Run("sql.ErrNoRows (genuine unset MODEL) proceeds to seed (no regression)", func(t *testing.T) {
+		mock := setupTestDB(t)
+		mock.ExpectQuery(modelSelQuery).WithArgs("ws-model-fresh-unset").
+			WillReturnError(sql.ErrNoRows)
+		mock.ExpectExec(secretInsert).
+			WithArgs("ws-model-fresh-unset", sqlmock.AnyArg(), sqlmock.AnyArg()).
+			WillReturnResult(sqlmock.NewResult(0, 1))
+
+		env := map[string]string{}
+		h.ensureConciergeModel(context.Background(), "ws-model-fresh-unset", env)
+
+		if env["MODEL"] != conciergeDeclaredModel {
+			t.Errorf("genuine unset did not seed MODEL=%q; got %q (env=%v) — regression on the seed path", conciergeDeclaredModel, env["MODEL"], env)
+		}
+		if err := mock.ExpectationsWereMet(); err != nil {
+			t.Errorf("unmet sqlmock expectations (the seed path did not persist): %v", err)
+		}
+	})
+
+	t.Run("existing stored MODEL is respected on successful read (no regression)", func(t *testing.T) {
+		mock := setupTestDB(t)
+		mock.ExpectQuery(modelSelQuery).WithArgs("ws-model-existing").
+			WillReturnRows(sqlmock.NewRows([]string{"encrypted_value", "encryption_version"}).
+				AddRow([]byte("anthropic:claude-opus-4-8"), 0))
+		// NO ExpectExec: existing pick wins → no seed.
+
+		env := map[string]string{}
+		h.ensureConciergeModel(context.Background(), "ws-model-existing", env)
+
+		if _, seeded := env["MODEL"]; seeded {
+			t.Errorf("existing MODEL pick wrongly overwrote with default (env=%v)", env)
+		}
+		if err := mock.ExpectationsWereMet(); err != nil {
+			t.Errorf("unmet sqlmock expectations: %v", err)
+		}
+	})
+}