diff --git a/.changeset/fn-7602-shortcut-row-layout.md b/.changeset/fn-7602-shortcut-row-layout.md
new file mode 100644
index 0000000000..908fbba219
--- /dev/null
+++ b/.changeset/fn-7602-shortcut-row-layout.md
@@ -0,0 +1,7 @@
+---
+"@runfusion/fusion": patch
+---
+
+summary: Fix overlapping Record and Clear buttons in the Keyboard Shortcuts settings rows on desktop and mobile.
+category: fix
+dev: The shortcut-capture Record/Clear buttons no longer use the icon-only `btn-icon` class (which set `line-height:0` and a mobile 36px square, clipping/overlapping the text labels); they use a text-button class and the `.shortcut-capture` row locks buttons with `flex-shrink:0` so the input and controls never overlap, stacking cleanly on mobile.
diff --git a/packages/dashboard/app/components/SettingsModal.css b/packages/dashboard/app/components/SettingsModal.css
index dbc288c1b0..21c5122a70 100644
--- a/packages/dashboard/app/components/SettingsModal.css
+++ b/packages/dashboard/app/components/SettingsModal.css
@@ -2550,6 +2550,17 @@ FN-7553's dedicated Keyboard Shortcuts section groups every action under a categ
   border-bottom: 0;
 }
 
+/*
+FNXC:DashboardShortcuts 2026-07-05-00:00:
+FN-7602 fixes an overlap bug: Record/Clear previously used the icon-only `btn-icon` class
+(line-height:0 + mobile 36px square), which clipped/overlapped their text labels
+("Record"/"Recording…"/"Clear") against the input and each other (IMG_1305). The input
+keeps `flex: 1 1 auto; min-width: 0;` so it shrinks first, while the buttons get
+`flex-shrink: 0; white-space: nowrap;` so their content-sized width (including the longer
+"Recording…" label) is never crushed or allowed to overlap a neighbor on desktop. Below
+768px the row stacks to a column so the buttons sit on their own row under the full-width
+input, still non-overlapping.
+*/
 .shortcut-capture {
   display: flex;
   align-items: center;
@@ -2566,6 +2577,12 @@ FN-7553's dedicated Keyboard Shortcuts section groups every action under a categ
   border-color: var(--color-error);
 }
 
+.shortcut-capture__record,
+.shortcut-capture__clear {
+  flex-shrink: 0;
+  white-space: nowrap;
+}
+
 .shortcut-capture__record--active {
   color: var(--color-warning);
 }
diff --git a/packages/dashboard/app/components/settings/sections/ShortcutCaptureInput.tsx b/packages/dashboard/app/components/settings/sections/ShortcutCaptureInput.tsx
index 94ea657ee5..1e77ccbb25 100644
--- a/packages/dashboard/app/components/settings/sections/ShortcutCaptureInput.tsx
+++ b/packages/dashboard/app/components/settings/sections/ShortcutCaptureInput.tsx
@@ -91,9 +91,19 @@ export function ShortcutCaptureInput({ id, value, defaultValue, invalid, describ
         }}
         onChange={(event) => onChange(event.target.value)}
       />
+      {/*
+      FNXC:DashboardShortcuts 2026-07-05-00:00:
+      Record/Clear are TEXT-labeled buttons ("Record"/"Recording…"/"Clear"), not icon-only
+      controls. `btn-icon` sets `line-height: 0` and a mobile 36px square meant for SVG-only
+      buttons — applying it here clipped the label's line box and, at mobile widths, forced
+      "Recording…" to overflow the fixed square and overlap the Clear button/input
+      (reported via screenshot IMG_1305). Use `btn-sm` instead so labels render on a normal
+      line-height with content-sized width; `.shortcut-capture` locks these buttons with
+      `flex-shrink: 0` so they never collide with the input or each other.
+      */}
       <button
         type="button"
-        className={`btn btn-icon shortcut-capture__record${recording ? " shortcut-capture__record--active" : ""}`}
+        className={`btn btn-sm shortcut-capture__record${recording ? " shortcut-capture__record--active" : ""}`}
         aria-pressed={recording}
         title={recording ? t("settings.keyboardShortcuts.recordingTitle", "Recording… press Escape to cancel") : t("settings.keyboardShortcuts.recordTitle", "Record a new shortcut")}
         onClick={() => (recording ? stopRecording() : startRecording())}
@@ -102,7 +112,7 @@ export function ShortcutCaptureInput({ id, value, defaultValue, invalid, describ
       </button>
       <button
         type="button"
-        className="btn btn-icon shortcut-capture__clear"
+        className="btn btn-sm shortcut-capture__clear"
         title={t("settings.keyboardShortcuts.clearTitle", "Disable this shortcut")}
         onClick={() => {
           if (recording) stopRecording();
diff --git a/packages/dashboard/app/components/settings/sections/__tests__/KeyboardShortcutsSection.test.tsx b/packages/dashboard/app/components/settings/sections/__tests__/KeyboardShortcutsSection.test.tsx
index 1b409a6899..0afb56f494 100644
--- a/packages/dashboard/app/components/settings/sections/__tests__/KeyboardShortcutsSection.test.tsx
+++ b/packages/dashboard/app/components/settings/sections/__tests__/KeyboardShortcutsSection.test.tsx
@@ -1,7 +1,10 @@
+import { readFileSync } from "node:fs";
 import { fireEvent, render, screen } from "@testing-library/react";
 import { describe, expect, it, vi } from "vitest";
 import { ShortcutCaptureInput } from "../ShortcutCaptureInput";
 
+const settingsModalCss = readFileSync("app/components/SettingsModal.css", "utf8");
+
 /*
 FNXC:DashboardShortcuts 2026-07-04-00:00:
 FN-7553 covers the press-to-record capture control in isolation before the
@@ -110,4 +113,96 @@ describe("ShortcutCaptureInput", () => {
     );
     expect(container.querySelector('[data-shortcuts-ignore="true"]')).toBeTruthy();
   });
+
+  /*
+  FNXC:DashboardShortcuts 2026-07-05-00:00:
+  Regression for FN-7602 (IMG_1305): Record/Clear previously carried the
+  icon-only `btn-icon` class (line-height:0 + mobile 36px square), which
+  clipped/overlapped the text labels against the input and each other. These
+  tests assert the buttons use a text-appropriate class across idle,
+  recording, invalid, and cleared/disabled states, and that the
+  `.shortcut-capture` CSS locks a non-overlapping desktop row / mobile stack.
+  */
+  describe("row layout (FN-7602 no-overlap regression)", () => {
+    it("never applies the icon-only btn-icon class to the Record or Clear buttons, idle", () => {
+      render(
+        <ShortcutCaptureInput id="test-shortcut" value="Ctrl+E" defaultValue="Ctrl+E" invalid={false} describedById="test-hint" onChange={vi.fn()} />,
+      );
+      const recordBtn = screen.getByRole("button", { name: /^record$/i });
+      const clearBtn = screen.getByRole("button", { name: /clear/i });
+
+      for (const btn of [recordBtn, clearBtn]) {
+        expect(btn.className.split(/\s+/)).not.toContain("btn-icon");
+        expect(btn.className.split(/\s+/)).toContain("btn");
+        expect(btn.className).toMatch(/\bbtn-sm\b|\bbtn--sm\b/);
+      }
+    });
+
+    it("keeps the Record button text-classed and readable while recording (longer label)", () => {
+      render(
+        <ShortcutCaptureInput id="test-shortcut" value="Ctrl+E" defaultValue="Ctrl+E" invalid={false} describedById="test-hint" onChange={vi.fn()} />,
+      );
+      fireEvent.click(screen.getByRole("button", { name: /^record$/i }));
+
+      const recordingBtn = screen.getByRole("button", { name: /recording/i });
+      expect(recordingBtn.className.split(/\s+/)).not.toContain("btn-icon");
+      expect(recordingBtn.className).toContain("shortcut-capture__record--active");
+      expect(recordingBtn).toHaveAttribute("aria-pressed", "true");
+      // Only a single Record/Recording control exists — no duplicate/overlapping control.
+      expect(screen.getAllByRole("button", { name: /record/i })).toHaveLength(1);
+
+      fireEvent.keyDown(document, { key: "Escape" });
+    });
+
+    it("keeps the invalid-binding style and buttons off btn-icon while invalid", () => {
+      render(
+        <ShortcutCaptureInput id="test-shortcut" value="Bogus" defaultValue="Ctrl+E" invalid={true} describedById="test-hint" onChange={vi.fn()} />,
+      );
+      expect(screen.getByRole("textbox").className).toContain("shortcut-capture__input--invalid");
+      for (const btn of [screen.getByRole("button", { name: /^record$/i }), screen.getByRole("button", { name: /clear/i })]) {
+        expect(btn.className.split(/\s+/)).not.toContain("btn-icon");
+      }
+    });
+
+    it("still clears a bound value without btn-icon interfering", () => {
+      const onChange = vi.fn();
+      render(
+        <ShortcutCaptureInput id="test-shortcut" value="Ctrl+E" defaultValue="Ctrl+E" invalid={false} describedById="test-hint" onChange={onChange} />,
+      );
+      fireEvent.click(screen.getByRole("button", { name: /clear/i }));
+      expect(onChange).toHaveBeenCalledWith("");
+    });
+
+    it("locks the desktop .shortcut-capture row so the input shrinks and buttons never overlap", () => {
+      const rowRule = settingsModalCss.match(/(?<!__record--active|__input--invalid)\.shortcut-capture\s*\{([^}]*)\}/)?.[1] ?? "";
+      const inputRule = settingsModalCss.match(/\.shortcut-capture__input\s*\{([^}]*)\}/)?.[1] ?? "";
+      const buttonRule = settingsModalCss.match(/\.shortcut-capture__record,\s*\n?\s*\.shortcut-capture__clear\s*\{([^}]*)\}/)?.[1] ?? "";
+
+      expect(rowRule).toContain("display: flex;");
+      expect(inputRule).toContain("flex: 1 1 auto;");
+      expect(inputRule).toContain("min-width: 0;");
+      expect(buttonRule).toContain("flex-shrink: 0;");
+      expect(buttonRule).toContain("white-space: nowrap;");
+    });
+
+    it("stacks .shortcut-capture on mobile with a full-width input and no overlapping buttons", () => {
+      // Anchor to the specific shortcut-capture mobile media block (the one
+      // immediately following `.shortcut-conflict-banner`) rather than a
+      // lazily-scoped regex, since the stylesheet has several unrelated
+      // `@media (max-width: 768px)` blocks earlier in the file that a naive
+      // lazy `[\s\S]*?` could otherwise bleed across.
+      const shortcutMediaStart = settingsModalCss.indexOf(".shortcut-conflict-banner");
+      const shortcutMediaBlock = settingsModalCss.slice(shortcutMediaStart).match(/@media \(max-width: 768px\) \{([\s\S]*?)\n\}/)?.[1] ?? "";
+      const mobileRowRule = shortcutMediaBlock.match(/\.shortcut-capture\s*\{([^}]*)\}/)?.[1] ?? "";
+      const mobileInputRule = shortcutMediaBlock.match(/\.shortcut-capture__input\s*\{([^}]*)\}/)?.[1] ?? "";
+
+      expect(mobileRowRule).toContain("flex-direction: column;");
+      expect(mobileInputRule).toContain("width: 100%;");
+
+      // The buttons' flex-shrink/nowrap rule is declared once (not overridden away)
+      // and still applies at mobile widths, so "Recording…" cannot overflow its box.
+      const buttonRule = settingsModalCss.match(/\.shortcut-capture__record,\s*\n?\s*\.shortcut-capture__clear\s*\{([^}]*)\}/)?.[1] ?? "";
+      expect(buttonRule).toContain("flex-shrink: 0;");
+    });
+  });
 });