diff --git a/CHANGELOG.md b/CHANGELOG.md
index 66adcf4..2bd1f6a 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,3 +1,33 @@
+## v0.118.1 — R-106 follow-up: the namespace was still being lost in the merge (2026-07-30)
+
+**v0.118.0's R-106 fix was incomplete and live validation caught it.** Deployed to demo-felhom, the
+recipe read:
+
+    "pbs": { ..., "namespace": "root", "namespace_state": "resolved", ... }
+
+`namespace_state: resolved` while the value was still the wrong `"root"` — which is a worse shape than
+the original defect, because it asserts confidence in a wrong answer. The new state field is what made it
+legible at a glance; without it this would have looked identical to the pre-fix output.
+
+**Cause.** `mergeConfig` (`internal/storage/observe.go:457`) overlays the CLUSTER storage config onto the
+NODE entry via a hand-listed set of type-specific fields — `Type`, `Server`, `Export`, `Share`,
+`Datastore`, `Fingerprint`, `VGName`, `ThinPool`, `Path`, `Content` — and `Namespace` was not on that list.
+`NodeStorage` does not return the namespace at all (it is cluster-config only), so the merged entry's
+`Namespace` was always empty and `StorageTarget.PBSNamespace` read `""`. `latestPBSCoord` then treated an
+empty configured namespace as the genuine root namespace, which is correct logic fed a wrong input.
+
+**Why the tests did not catch it.** Every test added in v0.118.0 constructs `StorageTarget` values
+directly — including the two that run `Collector.Collect()`, because they inject a `fakeObserver`. The
+break was UPSTREAM of the collector, in the observer's merge, so "the production generation path" as I had
+drawn it started one layer too late. Two new tests fix that: `TestObserve_CarriesPBSNamespaceThroughMerge`
+drives the real `Observe` with the split PVE returns reproduced (namespace present in the cluster list,
+absent from the node list — what PVE actually does), and `TestMergeConfig_CarriesPBSNamespace` tables the
+merge itself including fill-if-empty vs never-clobber. Red-proof: removing the one added line fails both,
+the first quoting the exact live symptom. Suite rc=0, 29 packages, 0 FAIL.
+
+`Username` is the one remaining unmerged type-specific field; nothing in the observer path consumes it, and
+the comment on the merge now says to add it here the moment something does.
+
 ## v0.118.0 — R-106 + R-109: the DR recipe stops guessing (2026-07-30)
 
 **The recipe is read at the worst possible moment — by an operator rebuilding a machine that is gone —
diff --git a/internal/storage/observe.go b/internal/storage/observe.go
index 6ead825..f7fcbbf 100644
--- a/internal/storage/observe.go
+++ b/internal/storage/observe.go
@@ -488,5 +488,16 @@ func mergeConfig(node, cluster proxmox.Storage) proxmox.Storage {
 	if node.Content == "" {
 		node.Content = cluster.Content
 	}
+	// R-106: the pbs namespace. `NodeStorage` does not return it AT ALL — it is cluster-config only —
+	// so without this line `Namespace` is always empty on the merged entry and every consumer sees a
+	// root-namespace box. Found by LIVE VALIDATION, not by the unit tests: the DR-recipe tests supply
+	// StorageTarget values directly, so they never crossed this merge.
+	//
+	// This function is a copy-only-what-is-needed allow-list, which is exactly how the gap arose. If you
+	// add a consumer of any other type-specific field (`Username` is the remaining unmerged one), add it
+	// here too and pin it in TestMergeConfig_CarriesPBSNamespace's table.
+	if node.Namespace == "" {
+		node.Namespace = cluster.Namespace
+	}
 	return node
 }
diff --git a/internal/storage/observe_test.go b/internal/storage/observe_test.go
index 6addb8e..62cc32e 100644
--- a/internal/storage/observe_test.go
+++ b/internal/storage/observe_test.go
@@ -292,3 +292,66 @@ func TestObserve_MountReadFailureDegradesNotFatal(t *testing.T) {
 		t.Errorf("lvmthin still derivable without mounts: %+v", got)
 	}
 }
+
+// ---------------------------------------------------------------------------------------------
+// R-106 — the pbs namespace must survive the cluster/node merge.
+// ---------------------------------------------------------------------------------------------
+
+// TestObserve_CarriesPBSNamespaceThroughMerge pins the gap that shipped in agent v0.118.0 and was caught
+// by LIVE VALIDATION rather than by tests: `mergeConfig` copies a hand-listed set of type-specific fields
+// from the CLUSTER config onto the NODE entry, and `Namespace` was not on that list. `NodeStorage` does
+// not return the namespace at all — it is cluster-config only — so `StorageTarget.PBSNamespace` was
+// always empty and the DR recipe reported the root namespace on every per-customer box, exactly the
+// R-106 symptom the fix was supposed to remove.
+//
+// The DR-recipe tests could not catch it: they construct StorageTarget values directly, so nothing
+// crossed this merge. This test drives the REAL Observe path with the split PVE returns reproduced —
+// namespace present in the cluster list, absent from the node list, which is what PVE actually does.
+func TestObserve_CarriesPBSNamespaceThroughMerge(t *testing.T) {
+	api := &fakeStorageAPI{
+		node: "demo-felhom",
+		// Cluster config: carries the type-specific fields, as /storage does.
+		cluster: []proxmox.Storage{{
+			Storage: "felhom-pbs", Type: "pbs", Content: "backup",
+			Server: "10.77.0.1", Datastore: "felhom-offsite", Namespace: "demo-felhom",
+		}},
+		// Node entry: live usage + active flag, and NO namespace — the shape that made the bug invisible.
+		nodeSt: []proxmox.Storage{{
+			Storage: "felhom-pbs", Type: "pbs", Content: "backup",
+			Total: 100, Used: 10, Avail: 90, Active: 1, Enabled: 1,
+		}},
+	}
+	o := NewObserver(api, &fakeHostReader{}, nil, quietLogger())
+
+	targets, err := o.Observe(context.Background())
+	if err != nil {
+		t.Fatalf("Observe: %v", err)
+	}
+	if len(targets) != 1 {
+		t.Fatalf("want 1 target, got %d", len(targets))
+	}
+	if got := targets[0].PBSNamespace; got != "demo-felhom" {
+		t.Errorf("PBSNamespace=%q, want %q — the namespace was lost in mergeConfig, so the DR recipe "+
+			"reports the root namespace on a per-customer box (R-106)", got, "demo-felhom")
+	}
+}
+
+// TestMergeConfig_CarriesPBSNamespace is the direct table over the merge itself: a node entry that omits
+// a field takes the cluster's value, and a node entry that HAS one keeps its own (never clobbered).
+func TestMergeConfig_CarriesPBSNamespace(t *testing.T) {
+	cluster := proxmox.Storage{Storage: "felhom-pbs", Type: "pbs", Namespace: "demo-hp", Datastore: "felhom-offsite"}
+
+	// Node omits the namespace (the real PVE shape) → it must be filled from the cluster config.
+	if got := mergeConfig(proxmox.Storage{Storage: "felhom-pbs"}, cluster).Namespace; got != "demo-hp" {
+		t.Errorf("namespace absent on the node entry: got %q, want it merged from the cluster config", got)
+	}
+	// Node already has one → keep it (the merge is fill-if-empty, never overwrite).
+	nodeOwn := proxmox.Storage{Storage: "felhom-pbs", Namespace: "node-wins"}
+	if got := mergeConfig(nodeOwn, cluster).Namespace; got != "node-wins" {
+		t.Errorf("merge clobbered the node's own namespace: got %q", got)
+	}
+	// No cluster row at all → the node entry passes through untouched.
+	if got := mergeConfig(proxmox.Storage{Storage: "x", Namespace: "keep"}, proxmox.Storage{}).Namespace; got != "keep" {
+		t.Errorf("empty cluster row altered the node entry: got %q", got)
+	}
+}