diff --git a/crates/pf-client-core/src/trust.rs b/crates/pf-client-core/src/trust.rs
index 7adf116f..2c25b845 100644
--- a/crates/pf-client-core/src/trust.rs
+++ b/crates/pf-client-core/src/trust.rs
@@ -325,6 +325,11 @@ pub fn connect_reject_message(reason: punktfunk_core::reject::RejectReason) -> S
             "Client and host versions don't match — update both to the same release.".into()
         }
         R::Busy => "The host is busy with another session.".into(),
+        R::SetupFailed => {
+            "The host accepted the connection but couldn't start the stream — the host's log \
+             (web console → Log) has the cause."
+                .into()
+        }
     }
 }
 
diff --git a/crates/pf-vdisplay/src/lib.rs b/crates/pf-vdisplay/src/lib.rs
index fca354aa..499ba90a 100644
--- a/crates/pf-vdisplay/src/lib.rs
+++ b/crates/pf-vdisplay/src/lib.rs
@@ -72,8 +72,8 @@ pub use session::{session_epoch, try_recover_session};
 #[path = "vdisplay/routing.rs"]
 pub(crate) mod routing;
 pub use routing::{
-    apply_input_env, restore_managed_session, restore_takeover_on_startup, start_restore_worker,
-    wants_dedicated_game_session,
+    apply_input_env, managed_session_available, restore_managed_session,
+    restore_takeover_on_startup, start_restore_worker, wants_dedicated_game_session,
 };
 #[cfg(target_os = "linux")]
 pub use routing::{
diff --git a/crates/pf-vdisplay/src/vdisplay/linux/gamescope.rs b/crates/pf-vdisplay/src/vdisplay/linux/gamescope.rs
index b8a3ec19..420409c4 100644
--- a/crates/pf-vdisplay/src/vdisplay/linux/gamescope.rs
+++ b/crates/pf-vdisplay/src/vdisplay/linux/gamescope.rs
@@ -1116,6 +1116,26 @@ pub fn schedule_restore_tv_session() {
     }
 }
 
+/// Does any DRM connector report a physically `connected` display? Scans
+/// `/sys/class/drm/*/status` — only connector nodes (`card0-eDP-1`, `card0-HDMI-A-1`, …) have a
+/// `status` file, so the bare `cardN` device dirs and `renderD*` nodes filter themselves out. A
+/// headless box (VM, panel-less mini PC) has none — in which case a "restore to the physical
+/// panel" can only fail, gamescope having no output to drive. Errors (no DRM at all, sysfs
+/// unreadable) read as headless: the safe direction is keeping the working session.
+fn physical_display_connected() -> bool {
+    connected_connector_under(std::path::Path::new("/sys/class/drm"))
+}
+
+/// [`physical_display_connected`] against an arbitrary sysfs root (the unit-testable core).
+fn connected_connector_under(base: &std::path::Path) -> bool {
+    let Ok(entries) = std::fs::read_dir(base) else {
+        return false;
+    };
+    entries.flatten().any(|e| {
+        std::fs::read_to_string(e.path().join("status")).is_ok_and(|s| s.trim() == "connected")
+    })
+}
+
 /// Tear down our host-managed session (freeing Steam) and restart the autologin gaming session(s)
 /// we stopped on connect — so the TV returns to gaming mode when no one is streaming. Invoked by
 /// [`start_restore_worker`] once the debounce deadline passes; takes the stopped-unit list so a
@@ -1127,6 +1147,19 @@ fn do_restore_tv_session() {
     {
         let mut took = STEAMOS_TOOK_OVER.lock().unwrap_or_else(|e| e.into_inner());
         if *took {
+            // A box with no physically connected display (a VM, a panel-less mini PC) has no
+            // "physical gaming session" to restore TO: removing the drop-in and restarting the
+            // target just crash-loops gamescope (no output to drive) and strands every later
+            // connect on "no usable compositor". Keep the headless session — and the takeover
+            // state, so a same-mode reconnect reuses it warm — instead. Checked at restore time
+            // (not connect time) so plugging a panel in later restores normally.
+            if !physical_display_connected() {
+                tracing::info!(
+                    "gamescope (SteamOS): no physical display connected — keeping the headless \
+                     session (nothing to restore to)"
+                );
+                return;
+            }
             *took = false;
             clear_takeover(); // A3: takeover undone — drop the persisted crash-restore marker
             *MANAGED_SESSION.lock().unwrap_or_else(|e| e.into_inner()) = None;
@@ -1524,7 +1557,35 @@ impl Drop for GamescopeProc {
 
 #[cfg(test)]
 mod tests {
-    use super::{cgroup_is_punktfunk_owned, is_steam_launch, shape_dedicated_command};
+    use super::{
+        cgroup_is_punktfunk_owned, connected_connector_under, is_steam_launch,
+        shape_dedicated_command,
+    };
+
+    #[test]
+    fn connector_status_scan() {
+        let base = std::env::temp_dir().join(format!("pf-drm-scan-{}", std::process::id()));
+        let mk = |name: &str, status: Option<&str>| {
+            let dir = base.join(name);
+            std::fs::create_dir_all(&dir).unwrap();
+            if let Some(s) = status {
+                std::fs::write(dir.join("status"), s).unwrap();
+            }
+        };
+        // Headless layout: device + render nodes only (no status files) → not connected.
+        mk("card0", None);
+        mk("renderD128", None);
+        assert!(!connected_connector_under(&base));
+        // Connectors present but nothing plugged in → still not connected.
+        mk("card0-HDMI-A-1", Some("disconnected\n"));
+        assert!(!connected_connector_under(&base));
+        // A live panel → connected.
+        mk("card0-eDP-1", Some("connected\n"));
+        assert!(connected_connector_under(&base));
+        // A missing base dir (no DRM at all) reads as headless.
+        assert!(!connected_connector_under(&base.join("nope")));
+        std::fs::remove_dir_all(&base).unwrap();
+    }
 
     #[test]
     fn steam_launch_detection() {
diff --git a/crates/pf-vdisplay/src/vdisplay/routing.rs b/crates/pf-vdisplay/src/vdisplay/routing.rs
index 06968c07..65a21bc5 100644
--- a/crates/pf-vdisplay/src/vdisplay/routing.rs
+++ b/crates/pf-vdisplay/src/vdisplay/routing.rs
@@ -207,6 +207,20 @@ pub fn cancel_pending_tv_restore() {
 #[cfg(not(target_os = "linux"))]
 pub fn cancel_pending_tv_restore() {}
 
+/// Can the MANAGED gamescope path stand a session up from nothing on this box (SteamOS's
+/// `gamescope-session` launcher or Bazzite's `gamescope-session-plus` present)? Lets the connect
+/// path route a "no live graphical session" box to the gamescope takeover — which rebuilds the
+/// session at the client's mode — instead of failing the connect. Always `false` off Linux.
+#[cfg(target_os = "linux")]
+pub fn managed_session_available() -> bool {
+    gamescope::managed_session_available()
+}
+
+#[cfg(not(target_os = "linux"))]
+pub fn managed_session_available() -> bool {
+    false
+}
+
 /// Call when a client session ends: if the host-managed gamescope path took over a box's autologin
 /// gaming session (stopped its single-instance Steam to stream at the client's mode), **schedule** a
 /// debounced restore so the TV returns to gaming mode — unless a client reconnects within the window
diff --git a/crates/punktfunk-core/src/client/pairing.rs b/crates/punktfunk-core/src/client/pairing.rs
index 474be64c..18e3ee30 100644
--- a/crates/punktfunk-core/src/client/pairing.rs
+++ b/crates/punktfunk-core/src/client/pairing.rs
@@ -86,10 +86,22 @@ impl NativeClient {
                     // A typed application close from the host (pairing not armed / armed for a
                     // different device / rate-limited / version mismatch) beats the generic
                     // transport error the aborted exchange produced — it is the actual answer.
-                    Err(e) => Err(match reject_from_close(&conn) {
-                        Some(r) => PunktfunkError::Rejected(r),
-                        None => e,
-                    }),
+                    // Same close-vs-stream-error race as the connect handshake: give the
+                    // host's CONNECTION_CLOSE a short grace to be processed before deciding
+                    // the error was plain transport trouble.
+                    Err(e) => {
+                        if conn.close_reason().is_none() {
+                            let _ = tokio::time::timeout(
+                                std::time::Duration::from_millis(300),
+                                conn.closed(),
+                            )
+                            .await;
+                        }
+                        Err(match reject_from_close(&conn) {
+                            Some(r) => PunktfunkError::Rejected(r),
+                            None => e,
+                        })
+                    }
                     ok => ok,
                 };
                 // Always tell the host we're done so it never blocks at its read — code 0 on
diff --git a/crates/punktfunk-core/src/client/pump/handshake.rs b/crates/punktfunk-core/src/client/pump/handshake.rs
index b3d7a6e7..5ad8f08d 100644
--- a/crates/punktfunk-core/src/client/pump/handshake.rs
+++ b/crates/punktfunk-core/src/client/pump/handshake.rs
@@ -240,9 +240,22 @@ pub(super) async fn connect_and_handshake(args: &WorkerArgs) -> Result<Handshake
             negotiated,
             host_caps,
         }),
-        Err(e) => Err(match reject_from_close(&conn) {
-            Some(r) => PunktfunkError::Rejected(r),
-            None => e,
-        }),
+        Err(e) => {
+            // The host's typed close can land a beat AFTER the stream error it caused: the
+            // stream reset/FIN and the CONNECTION_CLOSE are in flight together, and quinn can
+            // hand the reader its mid-frame EOF before it processes the close. Give the close a
+            // short grace to arrive so a host-side setup failure renders as its real reason
+            // ("the host could not start the stream session") instead of "control stream
+            // finished mid-frame". No-op when the connection already closed (or never will —
+            // bounded by the timeout).
+            if conn.close_reason().is_none() {
+                let _ = tokio::time::timeout(std::time::Duration::from_millis(300), conn.closed())
+                    .await;
+            }
+            Err(match reject_from_close(&conn) {
+                Some(r) => PunktfunkError::Rejected(r),
+                None => e,
+            })
+        }
     }
 }
diff --git a/crates/punktfunk-core/src/error.rs b/crates/punktfunk-core/src/error.rs
index 8bf97d6a..911d6d3b 100644
--- a/crates/punktfunk-core/src/error.rs
+++ b/crates/punktfunk-core/src/error.rs
@@ -61,6 +61,7 @@ pub enum PunktfunkStatus {
     RejectedSuperseded = -26,
     RejectedWireVersion = -27,
     RejectedBusy = -28,
+    RejectedSetupFailed = -29,
     Panic = -99,
 }
 
@@ -89,6 +90,7 @@ impl PunktfunkError {
                     R::Superseded => PunktfunkStatus::RejectedSuperseded,
                     R::WireVersionMismatch => PunktfunkStatus::RejectedWireVersion,
                     R::Busy => PunktfunkStatus::RejectedBusy,
+                    R::SetupFailed => PunktfunkStatus::RejectedSetupFailed,
                 }
             }
         }
diff --git a/crates/punktfunk-core/src/reject.rs b/crates/punktfunk-core/src/reject.rs
index 118e5816..8b62ac1a 100644
--- a/crates/punktfunk-core/src/reject.rs
+++ b/crates/punktfunk-core/src/reject.rs
@@ -33,6 +33,12 @@ pub const PAIR_APPROVAL_TIMEOUT_CLOSE_CODE: u32 = 0x65;
 pub const PAIR_SUPERSEDED_CLOSE_CODE: u32 = 0x66;
 /// The client's wire (protocol) version does not match the host's — one side needs updating.
 pub const WIRE_VERSION_CLOSE_CODE: u32 = 0x67;
+/// The host admitted the connection but could not stand the stream session up (compositor /
+/// capture / encoder setup failed host-side). The close reason bytes carry the specific error
+/// text for logs/diagnostics; clients render a stable "host-side failure" sentence. Before this
+/// code, a setup failure reached the client as a bare dropped connection ("control stream
+/// finished mid-frame") — indistinguishable from transport trouble.
+pub const SETUP_FAILED_CLOSE_CODE: u32 = 0x68;
 
 /// Why a host turned a connection away, decoded from the QUIC application close code — the
 /// client-side view of [`PAIR_NOT_ARMED_CLOSE_CODE`]..[`WIRE_VERSION_CLOSE_CODE`] plus
@@ -59,6 +65,9 @@ pub enum RejectReason {
     WireVersionMismatch,
     /// The host refused admission because a conflicting session is live.
     Busy,
+    /// The host admitted the connection but failed to start the stream session (host-side
+    /// setup error — the host log has the specific cause).
+    SetupFailed,
 }
 
 impl RejectReason {
@@ -75,6 +84,7 @@ impl RejectReason {
             PAIR_SUPERSEDED_CLOSE_CODE => Self::Superseded,
             WIRE_VERSION_CLOSE_CODE => Self::WireVersionMismatch,
             REJECT_BUSY_CLOSE_CODE => Self::Busy,
+            SETUP_FAILED_CLOSE_CODE => Self::SetupFailed,
             _ => return None,
         })
     }
@@ -91,6 +101,7 @@ impl RejectReason {
             Self::Superseded => PAIR_SUPERSEDED_CLOSE_CODE,
             Self::WireVersionMismatch => WIRE_VERSION_CLOSE_CODE,
             Self::Busy => REJECT_BUSY_CLOSE_CODE,
+            Self::SetupFailed => SETUP_FAILED_CLOSE_CODE,
         }
     }
 
@@ -107,6 +118,7 @@ impl RejectReason {
             Self::Superseded => "superseded",
             Self::WireVersionMismatch => "wire-version",
             Self::Busy => "busy",
+            Self::SetupFailed => "setup-failed",
         }
     }
 }
@@ -125,6 +137,7 @@ impl std::fmt::Display for RejectReason {
             Self::Superseded => "a newer request from this device replaced this one",
             Self::WireVersionMismatch => "client and host versions do not match",
             Self::Busy => "the host is busy with another session",
+            Self::SetupFailed => "the host could not start the stream session",
         })
     }
 }
diff --git a/crates/punktfunk-host/src/native.rs b/crates/punktfunk-host/src/native.rs
index d5ec9c02..2ae31258 100644
--- a/crates/punktfunk-host/src/native.rs
+++ b/crates/punktfunk-host/src/native.rs
@@ -423,6 +423,10 @@ pub(crate) async fn serve(
         // permit's lifetime: it's released while a knock is parked for delegated approval and
         // re-acquired on approval, so the hold is no longer a simple closure-scoped binding.
         let sem_session = sem.clone();
+        // Kept for the error path below: `serve_session` consumes `conn`, but a setup failure
+        // must still close the connection with a typed reason (quinn connections are cheap
+        // Arc-handle clones).
+        let conn_err = conn.clone();
         sessions.spawn(async move {
             match serve_session(
                 conn,
@@ -445,7 +449,23 @@ pub(crate) async fn serve(
                     "closed before the control handshake (reachability probe)"
                 ),
                 Err(e) => {
-                    tracing::warn!(%peer, error = %format!("{e:#}"), "session ended with error")
+                    // Make the failure legible to the client (the [`close_rejected`] discipline,
+                    // extended to EVERY session error): a setup failure that just drops the
+                    // connection reaches the client as a bare close mid-control-frame ("control
+                    // stream finished mid-frame") — indistinguishable from transport trouble.
+                    // Close with the typed setup-failed code, carrying the error text in the
+                    // reason bytes for client-side logs. When a gate already closed with its own
+                    // typed code, or the peer closed first, this close is a no-op (first wins).
+                    let detail = format!("{e:#}");
+                    let mut cut = detail.len().min(256);
+                    while !detail.is_char_boundary(cut) {
+                        cut -= 1;
+                    }
+                    conn_err.close(
+                        punktfunk_core::reject::SETUP_FAILED_CLOSE_CODE.into(),
+                        detail[..cut].as_bytes(),
+                    );
+                    tracing::warn!(%peer, error = %detail, "session ended with error")
                 }
             }
         });
diff --git a/crates/punktfunk-host/src/native/compositor.rs b/crates/punktfunk-host/src/native/compositor.rs
index 19e4bb03..55bc9350 100644
--- a/crates/punktfunk-host/src/native/compositor.rs
+++ b/crates/punktfunk-host/src/native/compositor.rs
@@ -92,8 +92,24 @@ pub(super) fn resolve_compositor(
         let available = crate::vdisplay::available();
         let chosen = match pick_compositor(pref, &available, detected) {
             Some(c) => c,
+            // No live session, but the MANAGED gamescope infra exists (SteamOS's
+            // `gamescope-session`, Bazzite's `gamescope-session-plus`): route to the gamescope
+            // backend anyway — its managed path stands the session up from nothing at the
+            // client's mode (drop-in takeover / session relaunch), so a dead gaming session
+            // self-heals on the next connect instead of bouncing every client until someone
+            // restarts it by hand. (The trap that motivated this: a headless SteamOS box whose
+            // gamescope died — every connect failed "no usable compositor" even though the
+            // takeover could rebuild it.) Not under an operator pin: an explicit
+            // `PUNKTFUNK_COMPOSITOR` keeps its exact, hand-configured meaning.
+            None if !overridden && crate::vdisplay::managed_session_available() => {
+                tracing::info!(
+                    "no live graphical session — managed gamescope infra present; routing to \
+                     the managed takeover to revive the session"
+                );
+                Compositor::Gamescope
+            }
             None => {
-                // No live session — the state a compositor crash leaves behind (gnome-shell
+                // The state a compositor crash leaves behind (gnome-shell
                 // SIGSEGV → GDM greeter, whose auto-login is once-per-boot). If the operator
                 // configured a recovery hook, fire it (debounced) and tell the client to retry:
                 // its next knock lands in the recovered desktop.
diff --git a/include/punktfunk_core.h b/include/punktfunk_core.h
index 1c55ceca..5d98f390 100644
--- a/include/punktfunk_core.h
+++ b/include/punktfunk_core.h
@@ -977,6 +977,13 @@
 // The client's wire (protocol) version does not match the host's — one side needs updating.
 #define WIRE_VERSION_CLOSE_CODE 103
 
+// The host admitted the connection but could not stand the stream session up (compositor /
+// capture / encoder setup failed host-side). The close reason bytes carry the specific error
+// text for logs/diagnostics; clients render a stable "host-side failure" sentence. Before this
+// code, a setup failure reached the client as a bare dropped connection ("control stream
+// finished mid-frame") — indistinguishable from transport trouble.
+#define SETUP_FAILED_CLOSE_CODE 104
+
 // Minimum supported multiplier (renders under native, upscaled on present).
 #define MIN_SCALE 0.5
 
@@ -1010,6 +1017,7 @@ enum PunktfunkStatus
     PUNKTFUNK_STATUS_REJECTED_SUPERSEDED = -26,
     PUNKTFUNK_STATUS_REJECTED_WIRE_VERSION = -27,
     PUNKTFUNK_STATUS_REJECTED_BUSY = -28,
+    PUNKTFUNK_STATUS_REJECTED_SETUP_FAILED = -29,
     PUNKTFUNK_STATUS_PANIC = -99,
 };
 #ifndef __cplusplus