diff --git a/lib/crates/fabro-cli/src/user_config.rs b/lib/crates/fabro-cli/src/user_config.rs
index e561d7480..5f22beab7 100644
--- a/lib/crates/fabro-cli/src/user_config.rs
+++ b/lib/crates/fabro-cli/src/user_config.rs
@@ -222,17 +222,11 @@ fn value_at_path<'a>(document: &'a toml::Value, path: &[&str]) -> Option<&'a tom
 
 /// Pull the resolved CLI target configuration out of `[cli.target]`.
 /// Returns either an http(s) URL or a unix socket path.
-#[expect(
-    clippy::disallowed_methods,
-    reason = "known leak: cli.target.* is a url/connection field that should resolve {{ env.* }} \
-              tokens but consumes them raw today; strict resolution scheduled in the \
-              interpolation unification (Phase 2 keep-rows)"
-)]
 fn cli_target_from_settings(settings: &CliNamespace) -> Option<String> {
     let target = settings.target.as_ref()?;
     match target {
-        CliTargetSettings::Http { url } => Some(url.as_source()),
-        CliTargetSettings::Unix { path } => Some(path.as_source()),
+        CliTargetSettings::Http { url } => Some(url.clone()),
+        CliTargetSettings::Unix { path } => Some(path.clone()),
     }
 }
 
diff --git a/lib/crates/fabro-config/src/layers/cli.rs b/lib/crates/fabro-config/src/layers/cli.rs
index 472d58412..b044d2d46 100644
--- a/lib/crates/fabro-config/src/layers/cli.rs
+++ b/lib/crates/fabro-config/src/layers/cli.rs
@@ -1,6 +1,5 @@
 //! Sparse `[cli]` settings layer definitions.
 
-use fabro_types::settings::InterpString;
 use fabro_types::settings::cli::{CliAuthStrategy, OutputFormat, OutputVerbosity};
 use fabro_types::settings::run::AgentPermissions;
 use serde::{Deserialize, Serialize};
@@ -32,11 +31,11 @@ pub struct CliLayer {
 pub enum CliTargetLayer {
     Http {
         #[serde(default)]
-        url: Option<InterpString>,
+        url: Option<String>,
     },
     Unix {
         #[serde(default)]
-        path: Option<InterpString>,
+        path: Option<String>,
     },
 }
 
diff --git a/lib/crates/fabro-config/src/layers/run.rs b/lib/crates/fabro-config/src/layers/run.rs
index 505385a3b..af35ce44b 100644
--- a/lib/crates/fabro-config/src/layers/run.rs
+++ b/lib/crates/fabro-config/src/layers/run.rs
@@ -19,7 +19,7 @@ pub struct RunLayer {
     #[serde(default, skip_serializing_if = "Option::is_none")]
     pub goal:          Option<RunGoalLayer>,
     #[serde(default, skip_serializing_if = "Option::is_none")]
-    pub working_dir:   Option<InterpString>,
+    pub working_dir:   Option<String>,
     /// Flat string-to-string map. Replaces wholesale across layers.
     #[serde(default, skip_serializing_if = "ReplaceMap::is_empty")]
     pub metadata:      ReplaceMap<String>,
diff --git a/lib/crates/fabro-config/src/project.rs b/lib/crates/fabro-config/src/project.rs
index bf48db569..4fc58e61e 100644
--- a/lib/crates/fabro-config/src/project.rs
+++ b/lib/crates/fabro-config/src/project.rs
@@ -12,7 +12,7 @@
 use std::fmt::Write;
 use std::path::{Path, PathBuf};
 
-use fabro_types::settings::{InterpString, RunNamespace};
+use fabro_types::settings::RunNamespace;
 use serde::Serialize;
 
 use crate::{Error, Result, WorkflowSettingsBuilder, run};
@@ -144,14 +144,8 @@ fn sibling_workflow_toml_for(graph: &Path) -> Option<PathBuf> {
     (toml_graph == graph).then_some(candidate)
 }
 
-#[expect(
-    clippy::disallowed_methods,
-    reason = "known leak: run.working_dir is a path kept as InterpString (not demoted); it should \
-              resolve {{ env.* }}/{{ vars.* }} tokens but consumes them raw today; strict \
-              resolution scheduled in the interpolation unification (Phase 2 keep-rows)"
-)]
 pub fn resolve_working_directory_from_run(run: &RunNamespace, caller_cwd: &Path) -> PathBuf {
-    let Some(work_dir) = run.working_dir.as_ref().map(InterpString::as_source) else {
+    let Some(work_dir) = run.working_dir.as_deref() else {
         return caller_cwd.to_path_buf();
     };
     let path = PathBuf::from(work_dir);
@@ -557,7 +551,7 @@ directory = "../custom"
         let cwd = Path::new("/tmp/workspace");
         let resolved = resolve_working_directory_from_run(
             &RunNamespace {
-                working_dir: Some(InterpString::parse("repo")),
+                working_dir: Some("repo".to_string()),
                 ..RunNamespace::default()
             },
             cwd,
diff --git a/lib/crates/fabro-config/src/resolve/cli.rs b/lib/crates/fabro-config/src/resolve/cli.rs
index a9400b251..12ebebb9d 100644
--- a/lib/crates/fabro-config/src/resolve/cli.rs
+++ b/lib/crates/fabro-config/src/resolve/cli.rs
@@ -3,7 +3,7 @@ use fabro_types::settings::cli::{
     CliLoggingSettings, CliNamespace, CliOutputSettings, CliTargetSettings, CliUpdatesSettings,
 };
 
-use super::{ResolveError, require_interp};
+use super::{ResolveError, require_string};
 use crate::{CliExecLayer, CliLayer, CliTargetLayer};
 
 pub fn resolve_cli(layer: &CliLayer, errors: &mut Vec<ResolveError>) -> CliNamespace {
@@ -46,12 +46,18 @@ fn resolve_target(
     errors: &mut Vec<ResolveError>,
 ) -> Option<CliTargetSettings> {
     match target {
-        Some(CliTargetLayer::Http { url }) => Some(CliTargetSettings::Http {
-            url: require_interp(url.as_ref(), "cli.target.url", errors),
-        }),
-        Some(CliTargetLayer::Unix { path }) => Some(CliTargetSettings::Unix {
-            path: require_interp(path.as_ref(), "cli.target.path", errors),
-        }),
+        Some(CliTargetLayer::Http { url }) => {
+            super::warn_if_demoted_template("cli.target.http.url", url.as_deref());
+            Some(CliTargetSettings::Http {
+                url: require_string(url.as_ref(), "cli.target.url", errors),
+            })
+        }
+        Some(CliTargetLayer::Unix { path }) => {
+            super::warn_if_demoted_template("cli.target.unix.path", path.as_deref());
+            Some(CliTargetSettings::Unix {
+                path: require_string(path.as_ref(), "cli.target.path", errors),
+            })
+        }
         None => None,
     }
 }
diff --git a/lib/crates/fabro-config/src/resolve/mod.rs b/lib/crates/fabro-config/src/resolve/mod.rs
index 54796bbf5..fd7f1e01a 100644
--- a/lib/crates/fabro-config/src/resolve/mod.rs
+++ b/lib/crates/fabro-config/src/resolve/mod.rs
@@ -29,6 +29,19 @@ pub(crate) fn require_interp(
     })
 }
 
+pub(crate) fn require_string(
+    value: Option<&String>,
+    path: &str,
+    errors: &mut Vec<ResolveError>,
+) -> String {
+    value.cloned().unwrap_or_else(|| {
+        errors.push(ResolveError::Missing {
+            path: path.to_string(),
+        });
+        String::new()
+    })
+}
+
 #[expect(
     clippy::disallowed_methods,
     reason = "parsed_value special case: the TCP listen address parses the literal source \
diff --git a/lib/crates/fabro-config/src/resolve/run.rs b/lib/crates/fabro-config/src/resolve/run.rs
index b554c03f9..01e4e9462 100644
--- a/lib/crates/fabro-config/src/resolve/run.rs
+++ b/lib/crates/fabro-config/src/resolve/run.rs
@@ -49,6 +49,8 @@ pub fn resolve_run(
         });
     }
 
+    super::warn_if_demoted_template("run.working_dir", layer.working_dir.as_deref());
+
     RunNamespace {
         goal: resolve_goal(layer.goal.as_ref()),
         working_dir: layer.working_dir.clone(),
diff --git a/lib/crates/fabro-config/src/tests/resolve_cli.rs b/lib/crates/fabro-config/src/tests/resolve_cli.rs
index 3216f8800..550da9271 100644
--- a/lib/crates/fabro-config/src/tests/resolve_cli.rs
+++ b/lib/crates/fabro-config/src/tests/resolve_cli.rs
@@ -3,7 +3,6 @@
     reason = "sync test fixture setup; not on a Tokio path"
 )]
 
-use fabro_types::settings::InterpString;
 use fabro_types::settings::cli::{CliTargetSettings, OutputFormat, OutputVerbosity};
 use fabro_types::settings::run::AgentPermissions;
 use temp_env::with_var;
@@ -42,7 +41,7 @@ url = "https://config.example.com"
     assert_eq!(
         user_settings.cli.target,
         Some(CliTargetSettings::Http {
-            url: InterpString::parse("https://config.example.com"),
+            url: "https://config.example.com".to_string(),
         })
     );
 }
@@ -80,10 +79,6 @@ fn user_settings_resolve_returns_defaults_when_default_settings_file_is_missing(
     });
 }
 
-#[expect(
-    clippy::disallowed_methods,
-    reason = "test asserts the raw template source"
-)]
 #[test]
 fn resolves_cli_target_exec_and_output_settings() {
     let cli = UserSettingsBuilder::from_toml(
@@ -125,7 +120,7 @@ level = "debug"
     let CliTargetSettings::Http { url } = cli.target.expect("target") else {
         panic!("expected http target");
     };
-    assert_eq!(url.as_source(), "https://config.example.com");
+    assert_eq!(url, "https://config.example.com");
 
     assert!(cli.exec.prevent_idle_sleep);
     assert_eq!(cli.exec.model.provider.as_deref(), Some("openai"));
diff --git a/lib/crates/fabro-config/src/tests/resolve_run.rs b/lib/crates/fabro-config/src/tests/resolve_run.rs
index 877e7ebd0..d942a428d 100644
--- a/lib/crates/fabro-config/src/tests/resolve_run.rs
+++ b/lib/crates/fabro-config/src/tests/resolve_run.rs
@@ -586,9 +586,10 @@ name = "sonnet"
         }
         other => panic!("expected file goal, got {other:?}"),
     }
+    // run.working_dir is demoted (D11): the env token stays literal text.
     assert_eq!(
-        settings.working_dir,
-        Some(InterpString::parse("{{ env.FABRO_WORKDIR }}"))
+        settings.working_dir.as_deref(),
+        Some("{{ env.FABRO_WORKDIR }}")
     );
     assert_eq!(settings.model.provider, Some("anthropic".to_string()));
     assert_eq!(settings.model.name, Some("sonnet".to_string()));
diff --git a/lib/crates/fabro-server/src/demo/mod.rs b/lib/crates/fabro-server/src/demo/mod.rs
index 010d7ab6a..a900e9b54 100644
--- a/lib/crates/fabro-server/src/demo/mod.rs
+++ b/lib/crates/fabro-server/src/demo/mod.rs
@@ -1785,7 +1785,7 @@ mod runs {
                 goal: Some(RunGoal::Inline(InterpString::parse(
                     "Add rate limiting to auth endpoints",
                 ))),
-                working_dir: Some(InterpString::parse("/workspace/api-server")),
+                working_dir: Some("/workspace/api-server".to_string()),
                 model: RunModelSettings {
                     provider: Some("anthropic".to_string()),
                     name: Some("claude-opus-4-6".to_string()),
diff --git a/lib/crates/fabro-types/src/settings/cli.rs b/lib/crates/fabro-types/src/settings/cli.rs
index a429c266a..0d97d7b89 100644
--- a/lib/crates/fabro-types/src/settings/cli.rs
+++ b/lib/crates/fabro-types/src/settings/cli.rs
@@ -9,7 +9,6 @@ use std::collections::HashMap;
 
 use serde::{Deserialize, Serialize};
 
-use super::interp::InterpString;
 use super::run::{AgentPermissions, McpServerSettings};
 
 /// A structurally resolved `[cli]` view for consumers.
@@ -26,8 +25,8 @@ pub struct CliNamespace {
 #[derive(Debug, Clone, PartialEq, Serialize, Deserialize)]
 #[serde(tag = "type", rename_all = "lowercase")]
 pub enum CliTargetSettings {
-    Http { url: InterpString },
-    Unix { path: InterpString },
+    Http { url: String },
+    Unix { path: String },
 }
 
 #[derive(Debug, Clone, Default, PartialEq, Serialize, Deserialize)]
diff --git a/lib/crates/fabro-types/src/settings/run.rs b/lib/crates/fabro-types/src/settings/run.rs
index 15f453ee9..cd5e30949 100644
--- a/lib/crates/fabro-types/src/settings/run.rs
+++ b/lib/crates/fabro-types/src/settings/run.rs
@@ -22,7 +22,7 @@ use super::size::Size;
 #[derive(Debug, Clone, PartialEq, Serialize, Deserialize)]
 pub struct RunNamespace {
     pub goal:          Option<RunGoal>,
-    pub working_dir:   Option<InterpString>,
+    pub working_dir:   Option<String>,
     pub metadata:      HashMap<String, String>,
     pub inputs:        HashMap<String, toml::Value>,
     pub model:         RunModelSettings,
@@ -82,10 +82,10 @@ impl RunNamespace {
         F: FnMut(&str) -> Option<String>,
     {
         substitute_goal(&mut self.goal, &mut lookup)?;
-        substitute_option(&mut self.working_dir, &mut lookup)?;
         substitute_string_map(&mut self.metadata, &mut lookup)?;
-        // run.model.provider/name and run.git.author.* were demoted to plain
-        // `String` and removed from this pass (D2): values stay literal.
+        // run.working_dir, run.model.provider/name, and run.git.author.* were
+        // demoted to plain `String` and removed from this pass (D2/D11):
+        // values stay literal.
         substitute_option_string(&mut self.model.controls.reasoning_effort, &mut lookup)?;
         substitute_option_string(&mut self.model.controls.speed, &mut lookup)?;
         substitute_string_vec(&mut self.checkpoint.exclude_globs, &mut lookup)?;
@@ -317,7 +317,6 @@ mod run_namespace_variable_substitution_tests {
             goal: Some(RunGoal::Inline(InterpString::parse(
                 "deploy {{ vars.ENV }} in {{ env.REGION }}",
             ))),
-            working_dir: Some(InterpString::parse("/workspace/{{ vars.ENV }}")),
             prepare: RunPrepareSettings {
                 commands:   vec!["echo {{ vars.ENV }} {{ env.REGION }}".to_string()],
                 timeout_ms: 1_000,
@@ -376,10 +375,6 @@ mod run_namespace_variable_substitution_tests {
             goal_source,
             Some("deploy prod in {{ env.REGION }}".to_string())
         );
-        assert_eq!(
-            run.working_dir.as_ref().map(InterpString::as_source),
-            Some("/workspace/prod".to_string())
-        );
         assert_eq!(run.prepare.commands, vec![
             "echo prod {{ env.REGION }}".to_string()
         ]);
@@ -408,10 +403,12 @@ mod run_namespace_variable_substitution_tests {
 
     #[test]
     fn demoted_fields_do_not_interpolate() {
-        // Demoted fields (run.model.*, run.git.author.*, run.scm.owner/
-        // repository) were removed from the vars pass (D2): `{{ vars.* }}`
-        // and `{{ env.* }}` stay literal even when a value is available.
+        // Demoted fields (run.working_dir, run.model.*, run.git.author.*,
+        // run.scm.owner/repository) were removed from the vars pass (D2/D11):
+        // `{{ vars.* }}` and `{{ env.* }}` stay literal even when a value is
+        // available.
         let mut run = RunNamespace {
+            working_dir: Some("/workspace/{{ vars.ENV }}".to_string()),
             model: super::RunModelSettings {
                 provider: Some("{{ vars.PROVIDER }}".to_string()),
                 name: Some("{{ vars.MODEL }}".to_string()),
@@ -435,6 +432,10 @@ mod run_namespace_variable_substitution_tests {
         run.substitute_variables(|_| Some("SUBSTITUTED".to_string()))
             .unwrap();
 
+        assert_eq!(
+            run.working_dir.as_deref(),
+            Some("/workspace/{{ vars.ENV }}")
+        );
         assert_eq!(run.model.provider.as_deref(), Some("{{ vars.PROVIDER }}"));
         assert_eq!(run.model.name.as_deref(), Some("{{ vars.MODEL }}"));
         let author = run.git.author.as_ref().unwrap();
diff --git a/lib/crates/fabro-workflow/src/operations/create.rs b/lib/crates/fabro-workflow/src/operations/create.rs
index 3c3ed5a72..9dba7fe6f 100644
--- a/lib/crates/fabro-workflow/src/operations/create.rs
+++ b/lib/crates/fabro-workflow/src/operations/create.rs
@@ -1276,7 +1276,7 @@ mod tests {
                 },
                 settings: settings_from_run_layer({
                     RunLayer {
-                        working_dir: Some(InterpString::parse("workspace")),
+                        working_dir: Some("workspace".to_string()),
                         execution: Some(RunExecutionLayer {
                             mode: Some(RunMode::DryRun),
                             ..RunExecutionLayer::default()
diff --git a/lib/crates/fabro-workflow/src/operations/source.rs b/lib/crates/fabro-workflow/src/operations/source.rs
index 40461766e..bb00adaca 100644
--- a/lib/crates/fabro-workflow/src/operations/source.rs
+++ b/lib/crates/fabro-workflow/src/operations/source.rs
@@ -126,11 +126,12 @@ fn resolve_goal_override(
 
 #[cfg(test)]
 mod tests {
+    use fabro_types::settings::InterpString;
+
     use super::*;
 
     #[test]
     fn resolve_workflow_uses_explicit_cwd_for_relative_work_dir() {
-        use fabro_types::settings::InterpString;
         use fabro_types::settings::run::RunNamespace;
 
         let dir = tempfile::tempdir().unwrap();
@@ -141,7 +142,7 @@ mod tests {
             },
             settings: WorkflowSettings {
                 run: RunNamespace {
-                    working_dir: Some(InterpString::parse("workspace")),
+                    working_dir: Some("workspace".to_string()),
                     ..RunNamespace::default()
                 },
                 ..WorkflowSettings::default()
@@ -155,7 +156,6 @@ mod tests {
 
     #[test]
     fn resolve_workflow_reads_goal_override_from_dense_run_settings() {
-        use fabro_types::settings::InterpString;
         use fabro_types::settings::run::{RunGoal, RunNamespace};
 
         let dir = tempfile::tempdir().unwrap();