diff --git a/misc/api.func b/misc/api.func
index d6405bf67..4d5c0ae86 100644
--- a/misc/api.func
+++ b/misc/api.func
@@ -312,7 +312,8 @@ json_escape() {
   s=${s//$'\r'/}
   s=${s//$'\t'/\\t}
   # Remove any remaining control characters (0x00-0x1F except those already handled)
-  s=$(printf '%s' "$s" | tr -d '\000-\010\013\014\016-\037')
+  # Also remove DEL (0x7F) and invalid high bytes that break JSON parsers
+  s=$(printf '%s' "$s" | tr -d '\000-\010\013\014\016-\037\177')
   printf '%s' "$s"
 }
 
@@ -982,7 +983,7 @@ EOF
   fi
 
   # All 3 attempts failed — do NOT set POST_UPDATE_DONE=true.
-  # This allows the EXIT trap (api_exit_script) to retry with 3 fresh attempts.
+  # This allows the EXIT trap (on_exit in error_handler.func) to retry.
   # No infinite loop risk: EXIT trap fires exactly once.
 }
 
diff --git a/misc/build.func b/misc/build.func
index 269a87d3c..2b4b41f26 100644
--- a/misc/build.func
+++ b/misc/build.func
@@ -4098,6 +4098,11 @@ EOF'
 
   # Installation failed?
   if [[ $install_exit_code -ne 0 ]]; then
+    # Prevent SIGTSTP (Ctrl+Z) from suspending the script during recovery.
+    # In non-interactive shells (bash -c), background processes (spinner) can
+    # trigger terminal-related signals that stop the entire process group.
+    trap '' TSTP
+
     msg_error "Installation failed in container ${CTID} (exit code: ${install_exit_code})"
 
     # Copy install log from container BEFORE API call so get_error_text() can read it
@@ -4173,7 +4178,12 @@ EOF'
     fi
 
     # Report failure to telemetry API (now with log available on host)
+    # NOTE: Do NOT use msg_info/spinner here — the background spinner process
+    # causes SIGTSTP in non-interactive shells (bash -c "$(curl ...)"), which
+    # stops the entire process group and prevents the recovery dialog from appearing.
+    $STD echo -e "${TAB}⏳ Reporting failure to telemetry..."
     post_update_to_api "failed" "$install_exit_code"
+    $STD echo -e "${TAB}${CM:-✔} Failure reported"
 
     # Defense-in-depth: Ensure error handling stays disabled during recovery.
     # Some functions (e.g. silent/$STD) unconditionally re-enable set -Eeuo pipefail
@@ -4537,8 +4547,12 @@ EOF'
 
     # Force one final status update attempt after cleanup
     # This ensures status is updated even if the first attempt failed (e.g., HTTP 400)
+    $STD echo -e "${TAB}⏳ Finalizing telemetry report..."
     post_update_to_api "failed" "$install_exit_code" "force"
+    $STD echo -e "${TAB}${CM:-✔} Telemetry finalized"
 
+    # Restore default SIGTSTP handling before exit
+    trap - TSTP
     exit $install_exit_code
   fi
 
@@ -5608,44 +5622,21 @@ ensure_log_on_host() {
   fi
 }
 
-# ------------------------------------------------------------------------------
-# api_exit_script()
+# ==============================================================================
+# TRAP MANAGEMENT
+# ==============================================================================
+# All traps (ERR, EXIT, INT, TERM, HUP) are set by catch_errors() in
+# error_handler.func — called at the top of this file after sourcing.
 #
-# - Exit trap handler for reporting to API telemetry
-# - Captures exit code and reports to PocketBase using centralized error descriptions
-# - Uses explain_exit_code() from api.func for consistent error messages
-# - ALWAYS sends telemetry FIRST before log collection to prevent pct pull
-#   hangs from blocking status updates (container may be dead/unresponsive)
-# - For non-zero exit codes: posts "failed" status
-# - For zero exit codes where post_update_to_api was never called:
-#   catches orphaned "installing" records (e.g., script exited cleanly
-#   but description() was never reached)
-# ------------------------------------------------------------------------------
-api_exit_script() {
-  local exit_code=$?
-  if [ $exit_code -ne 0 ]; then
-    # ALWAYS send telemetry FIRST - ensure status is reported even if
-    # ensure_log_on_host hangs (e.g. pct pull on dead container)
-    post_update_to_api "failed" "$exit_code" 2>/dev/null || true
-    # Best-effort log collection (non-critical after telemetry is sent)
-    if declare -f ensure_log_on_host >/dev/null 2>&1; then
-      ensure_log_on_host 2>/dev/null || true
-    fi
-    # Stop orphaned container if we're in the install phase
-    if [[ "${CONTAINER_INSTALLING:-}" == "true" && -n "${CTID:-}" ]] && command -v pct &>/dev/null; then
-      pct stop "$CTID" 2>/dev/null || true
-    fi
-  elif [[ "${POST_TO_API_DONE:-}" == "true" && "${POST_UPDATE_DONE:-}" != "true" ]]; then
-    # Script exited with 0 but never sent a completion status
-    # exit_code=0 is never an error — report as success
-    post_update_to_api "done" "0"
-  fi
-}
-
-if command -v pveversion >/dev/null 2>&1; then
-  trap 'api_exit_script' EXIT
-fi
-trap 'local _ec=$?; if [[ $_ec -ne 0 ]]; then post_update_to_api "failed" "$_ec" 2>/dev/null || true; if declare -f ensure_log_on_host &>/dev/null; then ensure_log_on_host 2>/dev/null || true; fi; fi' ERR
-trap 'post_update_to_api "failed" "129" 2>/dev/null || true; if [[ -n "${CTID:-}" ]] && command -v pct &>/dev/null; then pct stop "$CTID" 2>/dev/null || true; fi; exit 129' SIGHUP
-trap 'post_update_to_api "failed" "130" 2>/dev/null || true; if [[ -n "${CTID:-}" ]] && command -v pct &>/dev/null; then pct stop "$CTID" 2>/dev/null || true; fi; exit 130' SIGINT
-trap 'post_update_to_api "failed" "143" 2>/dev/null || true; if [[ -n "${CTID:-}" ]] && command -v pct &>/dev/null; then pct stop "$CTID" 2>/dev/null || true; fi; exit 143' SIGTERM
+# Do NOT set duplicate traps here. The handlers in error_handler.func
+# (on_exit, on_interrupt, on_terminate, on_hangup, error_handler) already:
+#   - Send telemetry via post_update_to_api / _send_abort_telemetry
+#   - Stop orphaned containers via _stop_container_if_installing
+#   - Collect logs via ensure_log_on_host
+#   - Clean up lock files and spinner processes
+#
+# Previously, inline traps here overwrote catch_errors() traps, causing:
+#   - error_handler() never fired (no error output, no cleanup dialog)
+#   - on_hangup() never fired (SSH disconnect → stuck records)
+#   - Duplicated logic in two places (hard to debug)
+# ==============================================================================
diff --git a/misc/error_handler.func b/misc/error_handler.func
index cea4639a1..10aff2e16 100644
--- a/misc/error_handler.func
+++ b/misc/error_handler.func
@@ -199,11 +199,16 @@ error_handler() {
     return 0
   fi
 
+  # Stop spinner and restore cursor FIRST — before any output
+  # This prevents spinner text overlapping with error messages
+  if declare -f stop_spinner >/dev/null 2>&1; then
+    stop_spinner 2>/dev/null || true
+  fi
+  printf "\e[?25h"
+
   local explanation
   explanation="$(explain_exit_code "$exit_code")"
 
-  printf "\e[?25h"
-
   # ALWAYS report failure to API immediately - don't wait for container checks
   # This ensures we capture failures that occur before/after container exists
   if declare -f post_update_to_api &>/dev/null; then
@@ -359,9 +364,39 @@ _send_abort_telemetry() {
   command -v curl &>/dev/null || return 0
   [[ "${DIAGNOSTICS:-no}" == "no" ]] && return 0
   [[ -z "${RANDOM_UUID:-}" ]] && return 0
-  curl -fsS -m 5 -X POST "${TELEMETRY_URL:-https://telemetry.community-scripts.org/telemetry}" \
-    -H "Content-Type: application/json" \
-    -d "{\"random_id\":\"${RANDOM_UUID}\",\"execution_id\":\"${EXECUTION_ID:-${RANDOM_UUID}}\",\"type\":\"${TELEMETRY_TYPE:-lxc}\",\"nsapp\":\"${NSAPP:-${app:-unknown}}\",\"status\":\"failed\",\"exit_code\":${exit_code}}" &>/dev/null || true
+
+  # Collect last 20 log lines for error diagnosis (best-effort)
+  local error_text=""
+  if [[ -n "${INSTALL_LOG:-}" && -s "${INSTALL_LOG}" ]]; then
+    error_text=$(tail -n 20 "$INSTALL_LOG" 2>/dev/null | sed 's/\x1b\[[0-9;]*[a-zA-Z]//g; s/\\/\\\\/g; s/"/\\"/g; s/\r//g' | tr '\n' '|' | sed 's/|$//' | tr -d '\000-\010\013\014\016-\037\177') || true
+  fi
+
+  # Calculate duration if start time is available
+  local duration=""
+  if [[ -n "${DIAGNOSTICS_START_TIME:-}" ]]; then
+    duration=$(($(date +%s) - DIAGNOSTICS_START_TIME))
+  fi
+
+  # Build JSON payload with error context
+  local payload
+  payload="{\"random_id\":\"${RANDOM_UUID}\",\"execution_id\":\"${EXECUTION_ID:-${RANDOM_UUID}}\",\"type\":\"${TELEMETRY_TYPE:-lxc}\",\"nsapp\":\"${NSAPP:-${app:-unknown}}\",\"status\":\"failed\",\"exit_code\":${exit_code}"
+  [[ -n "$error_text" ]] && payload="${payload},\"error\":\"${error_text}\""
+  [[ -n "$duration" ]] && payload="${payload},\"duration\":${duration}"
+  payload="${payload}}"
+
+  local api_url="${TELEMETRY_URL:-https://telemetry.community-scripts.org/telemetry}"
+
+  # 2 attempts (retry once on failure) — original had no retry
+  local attempt
+  for attempt in 1 2; do
+    if curl -fsS -m 5 -X POST "$api_url" \
+      -H "Content-Type: application/json" \
+      -d "$payload" &>/dev/null; then
+      return 0
+    fi
+    [[ $attempt -eq 1 ]] && sleep 1
+  done
+  return 0
 }
 
 # ------------------------------------------------------------------------------
@@ -437,6 +472,12 @@ on_exit() {
 # - Exits with code 130 (128 + SIGINT=2)
 # ------------------------------------------------------------------------------
 on_interrupt() {
+  # Stop spinner and restore cursor before any output
+  if declare -f stop_spinner >/dev/null 2>&1; then
+    stop_spinner 2>/dev/null || true
+  fi
+  printf "\e[?25h" 2>/dev/null || true
+
   _send_abort_telemetry "130"
   _stop_container_if_installing
   if declare -f msg_error >/dev/null 2>&1; then
@@ -456,6 +497,12 @@ on_interrupt() {
 # - Exits with code 143 (128 + SIGTERM=15)
 # ------------------------------------------------------------------------------
 on_terminate() {
+  # Stop spinner and restore cursor before any output
+  if declare -f stop_spinner >/dev/null 2>&1; then
+    stop_spinner 2>/dev/null || true
+  fi
+  printf "\e[?25h" 2>/dev/null || true
+
   _send_abort_telemetry "143"
   _stop_container_if_installing
   if declare -f msg_error >/dev/null 2>&1; then
@@ -478,6 +525,11 @@ on_terminate() {
 # - Exits with code 129 (128 + SIGHUP=1)
 # ------------------------------------------------------------------------------
 on_hangup() {
+  # Stop spinner (no cursor restore needed — terminal is already gone)
+  if declare -f stop_spinner >/dev/null 2>&1; then
+    stop_spinner 2>/dev/null || true
+  fi
+
   _send_abort_telemetry "129"
   _stop_container_if_installing
   exit 129