diff --git a/apps/server/src/cloud/bootService.test.ts b/apps/server/src/cloud/bootService.test.ts
index 4d8bae4377c4..390279675e43 100644
--- a/apps/server/src/cloud/bootService.test.ts
+++ b/apps/server/src/cloud/bootService.test.ts
@@ -359,6 +359,11 @@ it.layer(NodeServices.layer)("boot service install", (it) => {
         current: true,
         installedVersion: "1.2.3",
       });
+      // A started install that reached the end removes its own marker.
+      const path = yield* Path.Path;
+      expect(
+        yield* fs.exists(path.join(path.dirname(statePath), SERVICE_RESTART_PENDING_FILE)),
+      ).toBe(false);
       // @effect-diagnostics-next-line preferSchemaOverJson:off - fixed launcher-owned test document.
       const pendingState = JSON.stringify({
         protocol: SERVICE_LAUNCHER_PROTOCOL,
@@ -803,6 +808,40 @@ it.layer(NodeServices.layer)("boot service install", (it) => {
     }),
   );
 
+  it.effect("keeps a launch agent install that failed to start out of the current state", () =>
+    Effect.gen(function* () {
+      const { service, fs, statePath, commands, control } = yield* makeHarness("darwin");
+      const path = yield* Path.Path;
+      const plan = yield* service.install();
+      const markerPath = path.join(path.dirname(statePath), SERVICE_RESTART_PENDING_FILE);
+      expect(yield* fs.exists(markerPath)).toBe(false);
+      control.failCommand = `launchctl bootstrap gui/501 ${plan.unitPath}`;
+
+      expect((yield* service.install().pipe(Effect.flip))._tag).toBe("BootServiceCommandError");
+
+      // A failed bootstrap leaves nothing else on disk to tell the difference
+      // from a healthy install, so without the marker `t3 service install`
+      // would call itself already installed and never retry.
+      expect(yield* fs.readFileString(markerPath)).toBe("1.2.3\n");
+      const failed = yield* service.status;
+      expect(failed.problems).toEqual(["restart-pending"]);
+      expect(failed.current).toBe(false);
+
+      // What `reconcileService` does with a status that is not current: install again.
+      control.failCommand = undefined;
+      commands.length = 0;
+      yield* service.install();
+
+      expect(commands.filter((command) => command.startsWith("launchctl "))).toEqual([
+        "launchctl bootout --wait gui/501/com.t3tools.t3code.service",
+        "launchctl enable gui/501/com.t3tools.t3code.service",
+        `launchctl bootstrap gui/501 ${plan.unitPath}`,
+      ]);
+      expect(yield* fs.exists(markerPath)).toBe(false);
+      expect((yield* service.status).current).toBe(true);
+    }),
+  );
+
   it.effect("restarts without overwriting a pending remote update on macOS", () =>
     Effect.gen(function* () {
       const { service, fs, statePath, commands } = yield* makeHarness("darwin");
diff --git a/apps/server/src/cloud/bootService.ts b/apps/server/src/cloud/bootService.ts
index 0b102579887a..9ec544b39254 100644
--- a/apps/server/src/cloud/bootService.ts
+++ b/apps/server/src/cloud/bootService.ts
@@ -853,13 +853,13 @@ export const make = Effect.fn("cloud.boot_service.make")(function* (input: {
       yield* fs
         .makeDirectory(path.dirname(unitPath), { recursive: true })
         .pipe(Effect.mapError((cause) => new BootServiceInstallError({ cause })));
-      if (!start && installed) {
-        // Written first: once the files below name the new version, the
-        // running service is behind them, and a failure between the two
-        // writes must not leave it looking current. The launcher removes the
-        // marker when it starts, `restart` and a started install do too.
-        yield* fs.writeFileString(restartPendingPath, `${input.cliVersion}\n`, { mode: 0o600 });
-      }
+      // Written first, on every install: once the files below name the new
+      // version, whatever is running is behind them. A started install removes
+      // the marker after `activate`, and so do `restart` and the launcher when
+      // it comes up on that version, so a failed start leaves `status`
+      // reporting `restart-pending` and the next install repairs it instead
+      // of calling itself current (#12197).
+      yield* fs.writeFileString(restartPendingPath, `${input.cliVersion}\n`, { mode: 0o600 });
       yield* writeDurably(
         statePath,
         // @effect-diagnostics-next-line preferSchemaOverJson:off - fixed launcher-owned document.