diff --git a/packages/core/src/__tests__/git-repository.test.ts b/packages/core/src/__tests__/git-repository.test.ts
index d26f0fa052..4c6634904c 100644
--- a/packages/core/src/__tests__/git-repository.test.ts
+++ b/packages/core/src/__tests__/git-repository.test.ts
@@ -154,8 +154,45 @@ describe("ensureGitRepositoryForProjectPath", () => {
     await git(fakePkg, ["add", "index.js"]);
     await git(fakePkg, ["commit", "-m", "init"]);
 
+    // Also create a real sibling sub-repo to prove it IS detected while node_modules is excluded
+    const realRepo = join(projectPath, "my-app");
+    mkdirSync(realRepo, { recursive: true });
+    await git(realRepo, ["init", "-b", "main"]);
+    await git(realRepo, ["config", "user.email", "test@test.com"]);
+    await git(realRepo, ["config", "user.name", "Test"]);
+    writeFileSync(join(realRepo, "README.md"), "# my-app\n");
+    await git(realRepo, ["add", "README.md"]);
+    await git(realRepo, ["commit", "-m", "init"]);
+
     const detected = await detectWorkspaceRepos(projectPath);
 
-    expect(detected).toEqual([]);
+    // node_modules is excluded; my-app is detected
+    expect(detected).toEqual(["my-app"]);
+  });
+
+  it("skips auto-detection when workspaceMode is explicitly false in config.json", async () => {
+    const projectPath = tempDir("fusion-git-workspace-disabled-");
+    // Create a real git sub-repo so detectWorkspaceRepos would find it
+    const subRepo = join(projectPath, "repo-a");
+    mkdirSync(subRepo, { recursive: true });
+    await git(subRepo, ["init", "-b", "main"]);
+    await git(subRepo, ["config", "user.email", "test@test.com"]);
+    await git(subRepo, ["config", "user.name", "Test"]);
+    writeFileSync(join(subRepo, "README.md"), "# repo-a\n");
+    await git(subRepo, ["add", "README.md"]);
+    await git(subRepo, ["commit", "-m", "init"]);
+
+    // Write config.json with workspaceMode: false (user disabled it via dashboard)
+    mkdirSync(join(projectPath, ".fusion"), { recursive: true });
+    writeFileSync(
+      join(projectPath, ".fusion", "config.json"),
+      JSON.stringify({ settings: { workspaceMode: false } }),
+    );
+
+    const outcome = await ensureGitRepositoryForProjectPath(projectPath);
+
+    // Should proceed to git init, not workspace detection
+    expect(outcome).toBe("initialized");
+    expect(existsSync(join(projectPath, ".git"))).toBe(true);
   });
 });
diff --git a/packages/core/src/git-repository.ts b/packages/core/src/git-repository.ts
index a835db73d0..d55d354c49 100644
--- a/packages/core/src/git-repository.ts
+++ b/packages/core/src/git-repository.ts
@@ -68,16 +68,24 @@ export async function ensureGitRepositoryForProjectPath(
   CLI interactive setup writes workspace.json explicitly, but dashboard POST /api/projects
   and `fn project add` do not — without this fallback they would create a stray .git at the
   workspace root because loadWorkspaceConfig returned null.
+
+  FNXC:Workspace 2026-06-24-17:00:
+  If the user has explicitly disabled workspace mode (workspaceMode: false in config.json),
+  skip auto-detection and proceed to git init. Without this guard, toggling workspace mode off
+  via the dashboard would have no lasting effect — the fallback would re-detect sub-repos and
+  re-create workspace.json on the next registration call.
   */
-  const detectedRepos = await detectWorkspaceRepos(projectPath, runner, timeout);
-  if (detectedRepos.length > 0) {
-    try {
-      await saveWorkspaceConfig(projectPath, { repos: detectedRepos });
-    } catch {
-      // Best-effort: persist for the fast path on future calls, but don't fail
-      // the current registration if the write fails (permissions, disk full, etc.).
+  if (!(await isWorkspaceModeExplicitlyDisabled(projectPath))) {
+    const detectedRepos = await detectWorkspaceRepos(projectPath, runner, timeout);
+    if (detectedRepos.length > 0) {
+      try {
+        await saveWorkspaceConfig(projectPath, { repos: detectedRepos });
+      } catch {
+        // Best-effort: persist for the fast path on future calls, but don't fail
+        // the current registration if the write fails (permissions, disk full, etc.).
+      }
+      return "existing";
     }
-    return "existing";
   }
 
   try {
@@ -195,6 +203,23 @@ export interface WorkspaceConfig {
 
 const WORKSPACE_CONFIG_FILENAME = "workspace.json";
 
+/**
+ * Reads .fusion/config.json and returns true when `workspaceMode` is explicitly
+ * set to `false`. This guards the auto-detection fallback so a user who has
+ * intentionally disabled workspace mode doesn't get it silently re-enabled.
+ */
+async function isWorkspaceModeExplicitlyDisabled(projectPath: string): Promise<boolean> {
+  try {
+    const { readFile } = await import("node:fs/promises");
+    const { join } = await import("node:path");
+    const raw = await readFile(join(projectPath, ".fusion", "config.json"), "utf-8");
+    const config = JSON.parse(raw) as { settings?: { workspaceMode?: boolean } };
+    return config.settings?.workspaceMode === false;
+  } catch {
+    return false;
+  }
+}
+
 /*
 FNXC:Workspace 2026-06-22-00:00:
 Workspace repo entries are later joined onto the workspace root to resolve worktrees, so an