diff --git a/frontend/src/components/Chat.test.tsx b/frontend/src/components/Chat.test.tsx
index e1f87db..4cb53be 100644
--- a/frontend/src/components/Chat.test.tsx
+++ b/frontend/src/components/Chat.test.tsx
@@ -68,6 +68,61 @@ function setupMocks() {
 	mockedApi.setAnthropicApiKey.mockResolvedValue(true);
 }
 
+describe("Default provider selection (Story 206)", () => {
+	beforeEach(() => {
+		capturedWsHandlers = null;
+	});
+
+	it("AC1: defaults to claude-code-pty when no saved model preference exists", async () => {
+		mockedApi.getOllamaModels.mockResolvedValue([]);
+		mockedApi.getAnthropicApiKeyExists.mockResolvedValue(false);
+		mockedApi.getAnthropicModels.mockResolvedValue([]);
+		mockedApi.getModelPreference.mockResolvedValue(null);
+		mockedApi.setModelPreference.mockResolvedValue(true);
+		mockedApi.cancelChat.mockResolvedValue(true);
+
+		render(<Chat projectPath="/tmp/project" onCloseProject={vi.fn()} />);
+
+		await waitFor(() => expect(capturedWsHandlers).not.toBeNull());
+
+		// With no models available, the header renders a text input with the model value
+		const input = screen.getByPlaceholderText("Model");
+		expect(input).toHaveValue("claude-code-pty");
+	});
+
+	it("AC2: claude-code-pty remains default even when ollama models are available", async () => {
+		mockedApi.getOllamaModels.mockResolvedValue(["llama3.1", "deepseek-coder"]);
+		mockedApi.getAnthropicApiKeyExists.mockResolvedValue(false);
+		mockedApi.getAnthropicModels.mockResolvedValue([]);
+		mockedApi.getModelPreference.mockResolvedValue(null);
+		mockedApi.setModelPreference.mockResolvedValue(true);
+		mockedApi.cancelChat.mockResolvedValue(true);
+
+		render(<Chat projectPath="/tmp/project" onCloseProject={vi.fn()} />);
+
+		// Wait for Ollama models to load and the select dropdown to appear
+		const select = await screen.findByRole("combobox");
+		expect(select).toHaveValue("claude-code-pty");
+	});
+
+	it("AC3: respects saved model preference for existing projects", async () => {
+		mockedApi.getOllamaModels.mockResolvedValue(["llama3.1"]);
+		mockedApi.getAnthropicApiKeyExists.mockResolvedValue(false);
+		mockedApi.getAnthropicModels.mockResolvedValue([]);
+		mockedApi.getModelPreference.mockResolvedValue("llama3.1");
+		mockedApi.setModelPreference.mockResolvedValue(true);
+		mockedApi.cancelChat.mockResolvedValue(true);
+
+		render(<Chat projectPath="/tmp/project" onCloseProject={vi.fn()} />);
+
+		// Wait for models to load and preference to be applied
+		const select = await screen.findByRole("combobox");
+		await waitFor(() => {
+			expect(select).toHaveValue("llama3.1");
+		});
+	});
+});
+
 describe("Chat message rendering — unified tool call UI", () => {
 	beforeEach(() => {
 		capturedWsHandlers = null;
diff --git a/frontend/src/components/Chat.tsx b/frontend/src/components/Chat.tsx
index f07d845..eb1c38a 100644
--- a/frontend/src/components/Chat.tsx
+++ b/frontend/src/components/Chat.tsx
@@ -151,7 +151,7 @@ interface ChatProps {
 export function Chat({ projectPath, onCloseProject }: ChatProps) {
 	const { messages, setMessages, clearMessages } = useChatHistory(projectPath);
 	const [loading, setLoading] = useState(false);
-	const [model, setModel] = useState("llama3.1");
+	const [model, setModel] = useState("claude-code-pty");
 	const [enableTools, setEnableTools] = useState(true);
 	const [availableModels, setAvailableModels] = useState<string[]>([]);
 	const [claudeModels, setClaudeModels] = useState<string[]>([]);
@@ -244,8 +244,6 @@ export function Chat({ projectPath, onCloseProject }: ChatProps) {
 						const savedModel = await api.getModelPreference();
 						if (savedModel) {
 							setModel(savedModel);
-						} else if (sortedModels.length > 0) {
-							setModel(sortedModels[0]);
 						}
 					} catch (e) {
 						console.error(e);
diff --git a/frontend/src/components/CodeRef.test.tsx b/frontend/src/components/CodeRef.test.tsx
index d83197f..1eef7bb 100644
--- a/frontend/src/components/CodeRef.test.tsx
+++ b/frontend/src/components/CodeRef.test.tsx
@@ -13,20 +13,31 @@ describe("parseCodeRefs (Story 193)", () => {
 	it("returns a single text part for plain text with no code refs", () => {
 		const parts = parseCodeRefs("Hello world, no code here");
 		expect(parts).toHaveLength(1);
-		expect(parts[0]).toEqual({ type: "text", value: "Hello world, no code here" });
+		expect(parts[0]).toEqual({
+			type: "text",
+			value: "Hello world, no code here",
+		});
 	});
 
 	it("detects a simple code reference", () => {
 		const parts = parseCodeRefs("src/main.rs:42");
 		expect(parts).toHaveLength(1);
-		expect(parts[0]).toMatchObject({ type: "ref", path: "src/main.rs", line: 42 });
+		expect(parts[0]).toMatchObject({
+			type: "ref",
+			path: "src/main.rs",
+			line: 42,
+		});
 	});
 
 	it("detects a code reference embedded in surrounding text", () => {
 		const parts = parseCodeRefs("See src/lib.rs:100 for details");
 		expect(parts).toHaveLength(3);
 		expect(parts[0]).toEqual({ type: "text", value: "See " });
-		expect(parts[1]).toMatchObject({ type: "ref", path: "src/lib.rs", line: 100 });
+		expect(parts[1]).toMatchObject({
+			type: "ref",
+			path: "src/lib.rs",
+			line: 100,
+		});
 		expect(parts[2]).toEqual({ type: "text", value: " for details" });
 	});
 
diff --git a/frontend/src/components/CodeRef.tsx b/frontend/src/components/CodeRef.tsx
index d512c08..cef5467 100644
--- a/frontend/src/components/CodeRef.tsx
+++ b/frontend/src/components/CodeRef.tsx
@@ -22,7 +22,8 @@ export function parseCodeRefs(text: string): CodeRefPart[] {
 	const re = new RegExp(CODE_REF_PATTERN.source, "g");
 	let match: RegExpExecArray | null;
 
-	while ((match = re.exec(text)) !== null) {
+	match = re.exec(text);
+	while (match !== null) {
 		if (match.index > lastIndex) {
 			parts.push({ type: "text", value: text.slice(lastIndex, match.index) });
 		}
@@ -33,6 +34,7 @@ export function parseCodeRefs(text: string): CodeRefPart[] {
 			line: Number(match[2]),
 		});
 		lastIndex = re.lastIndex;
+		match = re.exec(text);
 	}
 
 	if (lastIndex < text.length) {
@@ -93,15 +95,23 @@ export function InlineCodeWithRefs({ text }: InlineCodeWithRefsProps) {
 
 	return (
 		<>
-			{parts.map((part, i) => {
-				if (part.type === "ref" && part.path !== undefined && part.line !== undefined) {
+			{parts.map((part) => {
+				if (
+					part.type === "ref" &&
+					part.path !== undefined &&
+					part.line !== undefined
+				) {
 					return (
-						<CodeRefLink key={`ref-${i}`} path={part.path} line={part.line}>
+						<CodeRefLink
+							key={`ref-${part.path}:${part.line}`}
+							path={part.path}
+							line={part.line}
+						>
 							{part.value}
 						</CodeRefLink>
 					);
 				}
-				return <span key={`text-${i}`}>{part.value}</span>;
+				return <span key={`text-${part.value}`}>{part.value}</span>;
 			})}
 		</>
 	);