docs: update standalone LS, MITM, and panel stream investigation

- Add panel-stream-investigation.md documenting dead end
- Update KNOWN_ISSUES: move polling and panel stream to resolved
- Update GEMINI.md with standalone LS section and new MITM setup
- Fix standalone-ls-todo to reflect default mode

docs/panel-stream-investigation.md

@@ -0,0 +1,93 @@
+# Panel Stream Investigation — Dead End
+
+## Summary
+
+Investigated `StreamCascadePanelReactiveUpdates` RPC as a potential source for
+progressive thinking text. **Result: dead end.** The panel state only contains
+UI metadata (`plan_status`, `user_settings`), not thinking content.
+
+## What We Tried
+
+### 1. Subscribe with Cascade ID
+
+Attempted to subscribe to `StreamCascadePanelReactiveUpdates` using the cascade
+ID as the reactive component identifier:
+
+```json
+{ "protocolVersion": 1, "id": "<cascade-id>" }
+```
+
+**Result:** `"reactive component <cascade-id> not found"`
+
+### 2. Retry with Delays
+
+Added retry logic (3 attempts, 500ms/1s/1.5s delays) to handle the possibility
+that the panel state is created asynchronously after cascade start.
+
+**Result:** Same error on all attempts. The panel state uses a different
+identifier than the cascade ID.
+
+### 3. InitializeCascadePanelState Analysis
+
+Examined the RPC that creates panel state:
+
+```js
+await this.client.initializeCascadePanelState({ metadata: e, userStatus: t });
+```
+
+Takes workspace metadata + user status, not cascade ID. Panel state is
+workspace-scoped, not cascade-scoped.
+
+## CascadePanelState Proto Definition
+
+```
+exa.cortex_pb.CascadePanelState:
+  field 1: plan_status  (PlanStatus)
+  field 2: user_settings (UserSettings)
+```
+
+Only 2 fields — neither contains thinking text.
+
+## Where Thinking Text Actually Lives
+
+Thinking text flows through **`StreamCascadeReactiveUpdates`** (the cascade
+reactive diffs that we already subscribe to):
+
+```
+CascadeState (jetski_cortex_pb)
+  └─ field 2: trajectory (gemini_coder.Trajectory)
+       └─ field 2: steps[] (gemini_coder.Step)
+            └─ field 20: planner_response (CortexStepPlannerResponse)
+                 ├─ field 1: response (string — streams progressively)
+                 ├─ field 3: thinking (string — raw thinking text)
+                 ├─ field 8: modified_response (string)
+                 └─ field 11: thinking_duration (Duration)
+```
+
+### Observed Behavior (gemini-3-flash)
+
+- Thinking text arrives as a **single atomic diff** (341 chars, one shot)
+- Response text streams progressively across many diffs (26 → 1796 chars)
+- Total diffs per request: ~20
+
+### Current Proxy Approach
+
+The proxy already captures thinking text correctly through polling
+`GetCascadeTrajectory` + `extract_thinking_content()`. No reactive diff
+parsing needed for current functionality.
+
+### Future: Progressive Thinking for Extended-Thinking Models
+
+For Opus models with extended thinking, the thinking text _might_ arrive
+progressively across multiple reactive diffs. If needed:
+
+1. Parse reactive diff JSON for field 3 changes within field 20
+2. Diff the thinking text between updates for incremental deltas
+3. Emit `response.reasoning_summary_text.delta` events as thinking grows
+
+## Cleanup
+
+- Removed `stream_cascade_panel_updates()` from `backend.rs`
+- Removed panel stream subscription + retry code from `responses.rs`
+- `StreamCascadeReactiveUpdates` (cascade diffs) is still used for
+  real-time notification of state changes (with polling as fallback)