diff --git a/LESSONS-LEARNED.md b/LESSONS-LEARNED.md
index 87553003..f7fd576d 100644
--- a/LESSONS-LEARNED.md
+++ b/LESSONS-LEARNED.md
@@ -2,7 +2,7 @@
 
 > **Purpose:** This file documents bugs, fixes, and gotchas encountered during development.
 > **For Claude Code:** Read this file at the start of each session to avoid repeating past mistakes.
-> **Last Updated:** January 28, 2026
+> **Last Updated:** January 30, 2026
 
 ---
 
@@ -185,6 +185,51 @@ setEditingNodeId(node.id)
 
 ---
 
+### Modal Draft State: Don't Overwrite Store-Managed Fields ⚠️ CRITICAL
+**Problem:** Child nodes created while a modal is open disappear when clicking "Done". Tree validation fails with errors about non-existent nodes.
+
+**Cause:** When using local draft state for Cancel/Done functionality in a modal:
+1. Modal opens and clones the entire node (including `children: []`) into local state
+2. User creates new child nodes via a dropdown (e.g., NodePicker) - these are added to the **store**
+3. User clicks "Done" → modal saves draft back to store
+4. The draft's stale `children: []` **overwrites** the store's actual children array
+5. Newly created nodes are deleted
+
+**Symptoms:**
+- Child nodes don't appear in the tree after closing modal
+- Validation errors: "Option references non-existent node"
+- Tree won't save due to validation failures
+
+**Broken pattern:**
+```tsx
+// Modal with local draft state
+const [draft, setDraft] = useState(() => structuredClone(node))
+
+const handleSave = () => {
+  // BAD: This overwrites children with stale snapshot!
+  updateNode(node.id, draft)
+  onClose()
+}
+```
+
+**Solution:** Exclude fields that are managed by other store actions (like `children` managed by `addNode`/`deleteNode`):
+```tsx
+const handleSave = () => {
+  // GOOD: Exclude 'children' - it's managed separately by addNode/deleteNode
+  const { children, ...draftWithoutChildren } = draft
+  updateNode(node.id, draftWithoutChildren)
+  onClose()
+}
+```
+
+**General rule:** When a modal uses local draft state, identify which fields are:
+- **Editable by the form** → include in draft save
+- **Managed by other actions** (addNode, deleteNode, etc.) → exclude from draft save
+
+**Files affected:** `NodeEditorModal.tsx`, any modal that edits objects with nested collections
+
+---
+
 ### Modal Scroll/Overflow with Fixed Header and Footer
 **Problem:** Modal content extends beyond screen when there's too much content, pushing close button and action buttons off-screen.
 
diff --git a/frontend/src/components/tree-editor/NodeEditorModal.tsx b/frontend/src/components/tree-editor/NodeEditorModal.tsx
index c4ad37e3..0b736eb2 100644
--- a/frontend/src/components/tree-editor/NodeEditorModal.tsx
+++ b/frontend/src/components/tree-editor/NodeEditorModal.tsx
@@ -31,7 +31,10 @@ export function NodeEditorModal({ node, onClose, isNewNode = false }: NodeEditor
 
   const handleSave = () => {
     // Commit all draft changes to the store
-    updateNode(node.id, draft)
+    // IMPORTANT: Exclude 'children' from the update - children are managed separately
+    // by addNode/deleteNode and we don't want to overwrite them with stale draft data
+    const { children, ...draftWithoutChildren } = draft
+    updateNode(node.id, draftWithoutChildren)
     onClose()
   }