diff --git a/src/safety/checker.rs b/src/safety/checker.rs
index 486c553..60276ef 100644
--- a/src/safety/checker.rs
+++ b/src/safety/checker.rs
@@ -271,7 +271,12 @@ impl SafetyChecker {
             }
             unknown => {
                 tracing::error!(
-                    "Safety checker: unregistered tool '{}' — add to checker.rs dispatch. Allowing with caution.",
+                    "Safety checker: unregistered tool '{}' blocked — add to checker.rs dispatch if legitimate.",
+                    unknown
+                );
+                anyhow::bail!(
+                    "Unregistered tool '{}' blocked by safety checker. \
+                     Register it in checker.rs to allow execution.",
                     unknown
                 );
             }
@@ -1213,14 +1218,19 @@ mod tests {
     }
 
     #[test]
-    fn test_safety_allows_unknown_tool_with_error_log() {
-        // Unknown tools are still allowed (dynamic plugin tools have arbitrary names)
-        // but now logged at error level to surface unregistered tools.
+    fn test_safety_blocks_unknown_tool() {
+        // Unknown/unregistered tools must be blocked to prevent
+        // untrusted code from bypassing safety checks.
         let config = SafetyConfig::default();
         let checker = SafetyChecker::new(&config);
 
         let call = create_test_call("unknown_tool", r#"{"arg": "value"}"#);
-        assert!(checker.check_tool_call(&call).is_ok());
+        let result = checker.check_tool_call(&call);
+        assert!(result.is_err());
+        assert!(
+            result.unwrap_err().to_string().contains("Unregistered tool"),
+            "Error should mention unregistered tool"
+        );
     }
 
     #[test]
@@ -1279,19 +1289,33 @@ mod tests {
     }
 
     #[test]
-    fn test_check_path_allows_when_no_allowed_paths_configured() {
+    fn test_check_path_restricts_to_workdir_when_no_allowed_paths() {
         let config = SafetyConfig {
-            allowed_paths: vec![], // Empty = allow all
+            allowed_paths: vec![], // Empty = restrict to working directory
             denied_paths: vec![],
             ..Default::default()
         };
         let checker = SafetyChecker::new(&config);
 
+        // Paths outside working directory should be blocked
         let call = create_test_call(
             "file_write",
             r#"{"path": "/any/path/at/all.txt", "content": ""}"#,
         );
-        assert!(checker.check_tool_call(&call).is_ok());
+        assert!(
+            checker.check_tool_call(&call).is_err(),
+            "Paths outside working directory should be blocked when allowed_paths is empty"
+        );
+
+        // Paths inside working directory should be allowed
+        let call_local = create_test_call(
+            "file_write",
+            r#"{"path": "src/main.rs", "content": ""}"#,
+        );
+        assert!(
+            checker.check_tool_call(&call_local).is_ok(),
+            "Paths inside working directory should be allowed"
+        );
     }
 
     // Additional edge case tests for improved coverage
diff --git a/src/safety/path_validator.rs b/src/safety/path_validator.rs
index 633f0e0..6377778 100644
--- a/src/safety/path_validator.rs
+++ b/src/safety/path_validator.rs
@@ -222,9 +222,26 @@ impl PathValidator {
             }
         }
 
-        if !self.config.allowed_paths.is_empty()
-            && !self.is_path_in_allowed_list(&canonical_str, path)?
-        {
+        if self.config.allowed_paths.is_empty() {
+            // No allowed_paths configured: restrict to working directory
+            // to prevent unrestricted filesystem access.
+            let working_dir_canonical = self
+                .working_dir
+                .canonicalize()
+                .unwrap_or_else(|_| self.working_dir.clone());
+            if !canonical.starts_with(&working_dir_canonical) {
+                tracing::warn!(
+                    "No allowed_paths configured — restricting to working directory. \
+                     Path '{}' is outside '{}'",
+                    canonical_str,
+                    working_dir_canonical.display()
+                );
+                anyhow::bail!(
+                    "Path '{}' is outside working directory and no allowed_paths configured",
+                    canonical_str
+                );
+            }
+        } else if !self.is_path_in_allowed_list(&canonical_str, path)? {
             anyhow::bail!("Path not in allowed list: {}", canonical_str);
         }
 
diff --git a/src/session/local_first.rs b/src/session/local_first.rs
index e8a7d3f..707fb87 100644
--- a/src/session/local_first.rs
+++ b/src/session/local_first.rs
@@ -27,12 +27,15 @@ fn generate_sync_id() -> String {
     format!("sync-{}", SYNC_ID_COUNTER.fetch_add(1, Ordering::SeqCst))
 }
 
-/// Get current timestamp
+/// Get current timestamp in seconds.
+///
+/// All TTL and interval comparisons in this module use seconds,
+/// so this must return seconds (not milliseconds).
 fn current_timestamp() -> u64 {
     SystemTime::now()
         .duration_since(UNIX_EPOCH)
         .unwrap_or_default()
-        .as_millis() as u64
+        .as_secs()
 }
 
 /// Cache priority level
diff --git a/system_tests/projecte2e/config/qwen3_5_27b_nvfp4.toml b/system_tests/projecte2e/config/qwen3_5_27b_nvfp4.toml
new file mode 100644
index 0000000..a6a421d
--- /dev/null
+++ b/system_tests/projecte2e/config/qwen3_5_27b_nvfp4.toml
@@ -0,0 +1,13 @@
+endpoint = "http://localhost:8000/v1"
+model = "qwen3.5-27b"
+max_tokens = 32768
+
+[safety]
+allowed_paths = ["./**", "~/**"]
+denied_paths = ["**/.env", "**/secrets/**", "**/.ssh/**", "**/target/**"]
+
+[agent]
+max_iterations = 80
+step_timeout_secs = 600
+native_function_calling = true
+token_budget = 32768