diff --git a/skill/scripts/hook-before-edit.mjs b/skill/scripts/hook-before-edit.mjs
index 5b8b13087..acf8dec52 100644
--- a/skill/scripts/hook-before-edit.mjs
+++ b/skill/scripts/hook-before-edit.mjs
@@ -358,10 +358,16 @@ const BLOCK_PREFIX = 'Impeccable design hook blocked this write before it landed
 
 function cursorBlockMessage(findings, filePath, config, cwd, footerMode, reserveChars) {
   const limits = config?.limits || DEFAULT_CONFIG.limits;
+  // Subtract the prefix from whichever limit binds, not just the Cursor
+  // ceiling: with a configured maxChars at or below the ceiling, the old
+  // `min(maxChars, ceiling - prefix)` never charged the prefix against the
+  // budget, so the final deny text could exceed maxChars by the prefix
+  // length and appendDesignSystemNoteOnce's size check lost exactly the
+  // room designNoteReserve had held back (Bugbot on PR #508).
   const budget = Math.min(
     limits.maxChars || DEFAULT_CONFIG.limits.maxChars,
-    CURSOR_DENY_LIMIT - BLOCK_PREFIX.length,
-  );
+    CURSOR_DENY_LIMIT,
+  ) - BLOCK_PREFIX.length;
   const rendered = renderTemplate(findings, filePath,
     { ...config, limits: { ...limits, maxChars: budget } },
     { cwd, footer: footerMode, reserveChars });
diff --git a/skill/scripts/hook-lib.mjs b/skill/scripts/hook-lib.mjs
index b5e4570b1..794ac59a1 100644
--- a/skill/scripts/hook-lib.mjs
+++ b/skill/scripts/hook-lib.mjs
@@ -975,7 +975,10 @@ export function renderTemplate(findings, filePath, config, opts = {}) {
   const cap = Math.max(1, limits.maxFindings || DEFAULT_CONFIG.limits.maxFindings);
   // reserveChars holds back room for a note the caller appends after render
   // (the DESIGN.md staleness note), so the final payload stays inside the
-  // configured budget.
+  // configured budget. It comes off after the 500-char floor, so at floor
+  // configs the note keeps guaranteed delivery room; the clamp budget can
+  // therefore sit below 500, which clampLastLine's footer-preserving
+  // fallback handles (Bugbot on PR #508).
   const maxChars = Math.max(500, limits.maxChars || DEFAULT_CONFIG.limits.maxChars) - (opts.reserveChars || 0);
 
   const cwd = opts.cwd || process.cwd();
@@ -1115,15 +1118,22 @@ function clampToBudget(header, lines, more, footer, maxChars) {
 // whatever happened to be last, which was always the footer.
 function clampLastLine(build, line, maxChars) {
   const footerText = directiveFooter({ mode: 'short' });
+  const bare = build([], footerText);
   // +1 for the newline the line itself brings when it joins the blocks.
-  const room = maxChars - build([], footerText).length - 1;
+  const room = maxChars - bare.length - 1;
   if (room >= 24) {
     const clipped = line.length > room ? `${line.slice(0, room - 1)}…` : line;
     return build([clipped], footerText);
   }
-  // maxChars is floored at 500 and header + short footer fit well inside
-  // that, so this is unreachable; keep the hard slice as the safety net.
-  return `${build([line], footerText).slice(0, maxChars - 1)}…`;
+  // No room for even a clipped finding line: the note reservation can pull
+  // the budget below the 500-char floor, and a deep file path can push the
+  // header past what remains beside the short policy (Bugbot on PR #508).
+  // Drop the line, and if the bare header + policy still overflow, clip the
+  // head. Never tail-slice: the footer sits at the end, so a tail slice is
+  // exactly the footer cut this renderer exists to prevent.
+  if (bare.length <= maxChars) return bare;
+  const head = bare.slice(0, Math.max(0, maxChars - footerText.length - 4));
+  return `${head}…\n\n${footerText}`;
 }
 
 // `compact` drops the registry description: within one emission the first
diff --git a/tests/hook.test.mjs b/tests/hook.test.mjs
index ee9eb340a..1e250e6d8 100644
--- a/tests/hook.test.mjs
+++ b/tests/hook.test.mjs
@@ -1224,6 +1224,24 @@ describe('renderTemplate()', () => {
     assert.match(renderFor('win32'), /ignore-value overused-font "Space Grotesk Var"/);
   });
 
+  it('keeps the policy footer when reserveChars presses against the 500-char floor', () => {
+    // Bugbot on PR #508: the note reservation used to be subtracted after
+    // the 500-char floor, so the clamp could run at ~366 chars, below the
+    // budget clampLastLine assumes safe, and the hard tail slice cut the
+    // policy footer. The reserve now comes off before the floor; when the
+    // floor wins, the note defers instead.
+    const config = { ...DEFAULT_CONFIG, limits: { ...DEFAULT_CONFIG.limits, maxChars: 500 } };
+    const longPath = `/x/${'deeply-nested/'.repeat(6)}Component.tsx`;
+    const text = renderTemplate(
+      Array.from({ length: 6 }, (_, i) =>
+        finding('side-tab', i + 1, { name: 'Side tab', description: 'Colored side border.' })),
+      longPath, config, { cwd: '/x', reserveChars: 134 }
+    );
+    assert.ok(text.length <= 500, `stays inside the floored budget (got ${text.length})`);
+    assert.match(text, /unsure, ask in one line\.$/);
+    assert.doesNotMatch(text, /…$/);
+  });
+
   it('drops the L<line> prefix when line is 0', () => {
     const text = renderTemplate(
       [finding('side-tab', 0, { name: 'X' })],