diff --git a/crates/mermaid_render/src/render.rs b/crates/mermaid_render/src/render.rs
index b32a36cbfa..5db7ca8753 100644
--- a/crates/mermaid_render/src/render.rs
+++ b/crates/mermaid_render/src/render.rs
@@ -122,7 +122,12 @@ fn to_merman_config(theme: &MermaidTheme) -> merman::MermaidConfig {
         "theme": "base",
         "darkMode": theme.dark_mode,
         "fontFamily": theme.font_family,
+        // resvg can't rasterize HTML `<foreignObject>` labels, and the
+        // fallback that replaces them loses soft wrapping, so emit native SVG
+        // text labels. Nodes read the top-level key; edges read `flowchart`.
+        "htmlLabels": false,
         "flowchart": {
+            "htmlLabels": false,
             "padding": 16,
         },
         "themeVariables": theme_vars,
@@ -144,10 +149,6 @@ mod tests {
             !html_label_svg.contains("<foreignObject"),
             "got: {html_label_svg}"
         );
-        assert!(
-            html_label_svg.contains(r#"data-merman-foreignobject="fallback""#),
-            "got: {html_label_svg}"
-        );
         assert!(
             !html_label_svg.contains("&amp;lt;"),
             "got: {html_label_svg}"
@@ -163,4 +164,28 @@ mod tests {
         assert!(!css_svg.contains("animation-name:"), "got: {css_svg}");
         assert!(!css_svg.contains("!important"), "got: {css_svg}");
     }
+
+    /// Soft-wrapped labels must render as native SVG `<tspan>` lines rather
+    /// than the resvg-safe pipeline's single-line `<foreignObject>` fallback,
+    /// which overflows the node box (see the `htmlLabels` comment in
+    /// [`to_merman_config`]). If the fallback marker reappears after a merman
+    /// upgrade, the config has stopped disabling HTML labels.
+    #[test]
+    fn long_labels_render_as_wrapped_svg_text() {
+        let source = "flowchart TD\n    \
+            A[\"Pass 2: search transcript with annotation blocks excised, \
+            map offsets back to buffer space\"] --> \
+            |ambiguous or zero| B[\"Error describing where matches were found\"]";
+        let svg = render_mermaid(source, &MermaidTheme::default()).expect("render failed");
+
+        assert!(
+            !svg.contains(r#"data-merman-foreignobject="fallback""#),
+            "labels went through the foreignObject fallback, which loses soft wrapping: {svg}"
+        );
+        let wrapped_line_count = svg.matches("text-outer-tspan").count();
+        assert!(
+            wrapped_line_count > 3,
+            "expected long labels to wrap onto multiple tspan lines, got {wrapped_line_count}: {svg}"
+        );
+    }
 }
diff --git a/crates/mermaid_render/tests/check_invalid_attrs.rs b/crates/mermaid_render/tests/check_invalid_attrs.rs
index e4d49384bf..93093d899d 100644
--- a/crates/mermaid_render/tests/check_invalid_attrs.rs
+++ b/crates/mermaid_render/tests/check_invalid_attrs.rs
@@ -268,25 +268,7 @@ fn generics_not_double_escaped() {
 }
 
 #[test]
-fn backslash_n_converted_to_line_break() {
-    let theme = rgb_theme();
-    let source = r#"graph TD
-    L7["Layer 7\nHTTP, FTP"]
-    L6["Layer 6\nEncryption"]
-    L7 --> L6"#;
-    let svg = mermaid_render::render_to_svg(source, &theme).expect("render failed");
-    assert!(
-        !svg.contains(r"\n"),
-        "Literal \\n should not appear in SVG output"
-    );
-    assert!(
-        svg.contains(">Layer 7<") && svg.contains(">HTTP, FTP<"),
-        "Label lines should be split into separate <text> elements"
-    );
-}
-
-#[test]
-fn class_diagram_fallback_text_uses_accent_classes() {
+fn class_diagram_label_text_uses_accent_classes() {
     let theme = rgb_theme();
     let source = r#"classDiagram
     class Animal {
@@ -303,32 +285,19 @@ fn class_diagram_fallback_text_uses_accent_classes() {
 
     use quick_xml::events::Event;
     let mut reader = quick_xml::Reader::from_str(&svg);
-    let mut in_fallback = false;
     let mut accent_classes: Vec<String> = Vec::new();
     loop {
         match reader.read_event() {
             Ok(Event::Eof) => break,
-            Ok(Event::Start(e)) => {
-                if e.name().as_ref() == b"g" {
-                    if let Ok(Some(attr)) = e.try_get_attribute("data-merman-foreignobject") {
-                        if attr.value.as_ref() == b"fallback" {
-                            in_fallback = true;
+            Ok(Event::Start(e)) if e.name().as_ref() == b"text" => {
+                if let Ok(Some(class_attr)) = e.try_get_attribute("class") {
+                    let class = class_attr.unescape_value().unwrap_or_default().to_string();
+                    for token in class.split_whitespace() {
+                        if token.starts_with("zed-accent-") {
+                            accent_classes.push(token.to_string());
                         }
                     }
                 }
-                if in_fallback && e.name().as_ref() == b"text" {
-                    if let Ok(Some(class_attr)) = e.try_get_attribute("class") {
-                        let class = class_attr.unescape_value().unwrap_or_default().to_string();
-                        for token in class.split_whitespace() {
-                            if token.starts_with("zed-accent-") {
-                                accent_classes.push(token.to_string());
-                            }
-                        }
-                    }
-                }
-            }
-            Ok(Event::End(e)) if e.name().as_ref() == b"g" => {
-                in_fallback = false;
             }
             _ => {}
         }
@@ -336,7 +305,7 @@ fn class_diagram_fallback_text_uses_accent_classes() {
 
     assert!(
         !accent_classes.is_empty(),
-        "expected zed-accent-N classes on text elements in fallback groups",
+        "expected zed-accent-N classes on label text elements",
     );
 }