diff --git a/src/daemon/application.c b/src/daemon/application.c
index 12543808e..69ff52ec7 100644
--- a/src/daemon/application.c
+++ b/src/daemon/application.c
@@ -374,6 +374,11 @@ static bool application_regular_db_exists(const char *project) {
     return stat(path, &status) == 0 && S_ISREG(status.st_mode);
 }
 
+static bool application_canonical_directory_exists(const char *path) {
+    cbm_path_info_t info = {0};
+    return cbm_path_info_utf8(path, &info) == 0 && info.is_directory;
+}
+
 static cbm_daemon_application_watch_t *application_find_watch_locked(
     cbm_daemon_application_t *application, const char *project) {
     for (cbm_daemon_application_watch_t *watch = application->watches; watch; watch = watch->next) {
@@ -2354,9 +2359,7 @@ static cbm_daemon_runtime_application_status_t application_set_context(
     if (canonical && allowed_present) {
         canonical = cbm_canonical_path(allowed, canonical_allowed, sizeof(canonical_allowed));
     }
-    struct stat root_status;
-    canonical =
-        canonical && stat(canonical_root, &root_status) == 0 && S_ISDIR(root_status.st_mode);
+    canonical = canonical && application_canonical_directory_exists(canonical_root);
     bool set =
         canonical && cbm_mcp_server_set_session_context(session->mcp, canonical_root,
                                                         allowed_present ? canonical_allowed : NULL);
@@ -3369,9 +3372,8 @@ static int application_background_index(cbm_daemon_application_t *application,
         return -1;
     }
     char canonical_root[APPLICATION_PATH_CAP];
-    struct stat root_status;
     if (!cbm_canonical_path(root_path, canonical_root, sizeof(canonical_root)) ||
-        stat(canonical_root, &root_status) != 0 || !S_ISDIR(root_status.st_mode)) {
+        !application_canonical_directory_exists(canonical_root)) {
         return -1;
     }
     yyjson_mut_doc *document = yyjson_mut_doc_new(NULL);
diff --git a/tests/test_daemon_application.c b/tests/test_daemon_application.c
index e0ef6b459..fceeb7130 100644
--- a/tests/test_daemon_application.c
+++ b/tests/test_daemon_application.c
@@ -714,6 +714,45 @@ TEST(daemon_application_requires_immutable_explicit_context) {
     PASS();
 }
 
+TEST(daemon_application_accepts_utf8_session_context_root) {
+    char root[APP_TEST_PATH_CAP];
+    snprintf(root, sizeof(root), "%s/cbm-app-context-caf\xC3\xA9-XXXXXX", cbm_tmpdir());
+    bool root_ok = cbm_mkdtemp(root) != NULL;
+    cbm_daemon_application_t *application = cbm_daemon_application_new(NULL);
+    cbm_daemon_runtime_application_callbacks_t callbacks =
+        cbm_daemon_application_runtime_callbacks(application);
+    cbm_daemon_runtime_application_session_t *session = app_test_open(&callbacks, 311);
+    uint8_t *context = NULL;
+    uint32_t context_length = 0;
+    uint8_t *response = NULL;
+    uint32_t response_length = 0;
+    bool context_ok = root_ok && app_test_context_request(root, root, &context, &context_length);
+    cbm_daemon_runtime_application_status_t status =
+        context_ok ? app_test_request(&callbacks, session, context, context_length, &response,
+                                      &response_length)
+                   : CBM_DAEMON_RUNTIME_APPLICATION_TRANSPORT_ERROR;
+
+    free(context);
+    free(response);
+    if (session) {
+        callbacks.session_close(callbacks.context, session);
+    }
+    bool stopped = application && cbm_daemon_application_shutdown(application, APP_TEST_TIMEOUT_MS);
+    cbm_daemon_application_free(application);
+    if (root_ok) {
+        (void)cbm_rmdir(root);
+    }
+
+    ASSERT_TRUE(root_ok);
+    ASSERT_NOT_NULL(application);
+    ASSERT_NOT_NULL(session);
+    ASSERT_TRUE(context_ok);
+    ASSERT_EQ(status, CBM_DAEMON_RUNTIME_APPLICATION_OK);
+    ASSERT_EQ(response_length, 0);
+    ASSERT_TRUE(stopped);
+    PASS();
+}
+
 TEST(daemon_application_mcp_notification_has_no_response) {
     cbm_daemon_application_t *application = cbm_daemon_application_new(NULL);
     cbm_daemon_runtime_application_callbacks_t callbacks =
@@ -5348,6 +5387,7 @@ SUITE(daemon_application) {
     RUN_TEST(daemon_application_new_session_does_not_retain_initial_store);
     RUN_TEST(daemon_application_request_cancel_is_scoped_to_exact_token);
     RUN_TEST(daemon_application_requires_immutable_explicit_context);
+    RUN_TEST(daemon_application_accepts_utf8_session_context_root);
     RUN_TEST(daemon_application_ui_config_updates_are_masked_and_serialized);
     RUN_TEST(daemon_application_ui_config_rejects_noncanonical_frames);
     RUN_TEST(daemon_application_ui_readiness_proof_is_generation_bound_before_context);
diff --git a/tests/windows/test_non_ascii_path.py b/tests/windows/test_non_ascii_path.py
index bd7de22a4..bb181688f 100644
--- a/tests/windows/test_non_ascii_path.py
+++ b/tests/windows/test_non_ascii_path.py
@@ -358,9 +358,9 @@ def no_project_error(index_txt, repo, cache):
 
 
 def index_and_count(binary, repo, cache):
-    """Index `repo` into an isolated cache and return label-resolved counts."""
+    """Start in and index `repo`, then return label-resolved counts."""
     os.makedirs(cache, exist_ok=True)
-    with McpServer(binary, cache_dir=cache) as s:
+    with McpServer(binary, cache_dir=cache, cwd=repo) as s:
         s.initialize()
         resp = s.call_tool("index_repository", {"repo_path": repo}, timeout=180)
         index_txt, err = s.tool_text(resp)