diff --git a/src/vpcopilot/apply.py b/src/vpcopilot/apply.py
index eee2a32..ec22f5d 100644
--- a/src/vpcopilot/apply.py
+++ b/src/vpcopilot/apply.py
@@ -58,6 +58,9 @@ def _sp_block(spec: dict) -> dict:
     "jwt_claims": [],
 }
 _NESTED = ("path", "http_method", "body_matcher", "domain_matcher", "label_matcher", "user_identity_matcher")
+# XC ORs these lists inside a path matcher — so a rule that names ANY of them must not also carry
+# the catch-all `prefix_values: ["/"]` default. See normalize_service_policy_spec.
+_PATH_VALUE_KEYS = ("prefix_values", "exact_values", "regex_values", "suffix_values")
 
 # A valid default Bot Defense policy (flag-only mitigation on all paths) — the exact shape XC
 # requires (protected endpoint + flow-label choice + mitigation), taken from a live LB config.
@@ -93,6 +96,15 @@ def normalize_service_policy_spec(spec: dict) -> dict:
         for key in _NESTED:  # nested-merge matchers so partial values keep required sub-keys
             if isinstance(rs.get(key), dict):
                 merged[key] = {**_RULE_DEFAULTS[key], **rs[key]}
+        # …but the nested merge exists to supply required STRUCTURAL sub-keys, not a matching value.
+        # A rule naming an exact/regex/suffix path was also inheriting the default catch-all
+        # `prefix_values: ["/"]`, and XC ORs those lists — so a surgical one-endpoint DENY denied
+        # the whole LB. Verified live on vpcopilot-lab: exact-only DENY + injected prefix → 403 on
+        # every path; without it → 403 only on the named path. A rule naming NO path still gets the
+        # catch-all, which is what makes the trailing allow-all work.
+        src_path = rs.get("path")
+        if isinstance(src_path, dict) and any(src_path.get(k) for k in _PATH_VALUE_KEYS):
+            merged["path"] = {**merged["path"], "prefix_values": list(src_path.get("prefix_values") or [])}
         # XC wants a LIST for these matchers (query_params, headers, cookie_matchers, …); a weaker
         # model often emits a single matcher OBJECT — coerce it, else XC 400s "cannot unmarshal
         # object into []json.RawMessage".
diff --git a/tests/test_normalize.py b/tests/test_normalize.py
index 6eaac08..e17098a 100644
--- a/tests/test_normalize.py
+++ b/tests/test_normalize.py
@@ -38,3 +38,73 @@ def test_list_matcher_object_coerced_to_list():
     # an empty object collapses to [] (a valid empty list), not [{}]
     empty = {"rule_list": {"rules": [{"spec": {"action": "DENY", "query_params": {}}}]}}
     assert normalize_service_policy_spec(empty)["rule_list"]["rules"][0]["spec"]["query_params"] == []
+
+
+# ---- path widening: a named path value must not inherit the catch-all prefix ----
+# Verified live on vpcopilot-lab 2026-07-27: XC ORs the path value lists, so a DENY carrying both
+# exact_values ["/x"] and the default prefix_values ["/"] denies EVERY path. 12 of the 31 generated
+# rules on disk are exact-only and were being widened this way.
+
+def _deny(path, **extra):
+    spec = {"rule_list": {"rules": [{"spec": {"action": "DENY", "http_method": {"methods": ["GET"]},
+                                              **({"path": path} if path is not None else {}), **extra}}]}}
+    return normalize_service_policy_spec(spec)["rule_list"]["rules"][0]["spec"]["path"]
+
+
+def test_exact_only_path_does_not_gain_the_catchall_prefix():
+    p = _deny({"exact_values": ["/users/v1/_debug"]})
+    assert p["exact_values"] == ["/users/v1/_debug"]
+    assert p["prefix_values"] == []          # the bug injected ["/"] here -> denied every path
+
+
+def test_regex_only_path_does_not_gain_the_catchall_prefix():
+    assert _deny({"regex_values": ["api/v1/x402/.*"]})["prefix_values"] == []
+
+
+def test_suffix_only_path_does_not_gain_the_catchall_prefix():
+    assert _deny({"suffix_values": ["/admin"]})["prefix_values"] == []
+
+
+# ---- pins on behaviour that must NOT change ----
+def test_explicit_prefix_is_preserved_unchanged():
+    p = _deny({"prefix_values": ["/api/pay"]})
+    assert p["prefix_values"] == ["/api/pay"] and p["exact_values"] == []
+
+
+def test_prefix_and_exact_together_are_both_kept():
+    p = _deny({"prefix_values": ["/api"], "exact_values": ["/health"]})
+    assert p["prefix_values"] == ["/api"] and p["exact_values"] == ["/health"]
+
+
+def test_rule_with_no_path_still_matches_everything():
+    """A rule that names no path at all must still get the catch-all — this is what makes the
+    trailing allow-all work when a model omits its path."""
+    assert _deny(None)["prefix_values"] == ["/"]
+
+
+def test_empty_path_object_still_matches_everything():
+    assert _deny({})["prefix_values"] == ["/"]
+
+
+def test_structural_subkeys_are_still_filled_on_a_named_path():
+    p = _deny({"exact_values": ["/x"]})
+    assert p["transformers"] == [] and p["invert_matcher"] is False
+    assert set(p) == {"prefix_values", "exact_values", "regex_values", "suffix_values",
+                      "transformers", "invert_matcher"}
+
+
+def test_other_nested_matchers_are_untouched_by_the_path_rule():
+    r = normalize_service_policy_spec({"rule_list": {"rules": [{"spec": {
+        "action": "DENY", "path": {"exact_values": ["/x"]},
+        "http_method": {"methods": ["POST"]},
+        "body_matcher": {"regex_values": ["amount[^0-9-]*-[0-9]"]},
+    }}]}})["rule_list"]["rules"][0]["spec"]
+    assert r["http_method"]["methods"] == ["POST"] and "invert_matcher" in r["http_method"]
+    assert r["body_matcher"]["regex_values"] == ["amount[^0-9-]*-[0-9]"]
+    assert r["waf_action"] == {"none": {}}            # unrelated required defaults still filled
+
+
+def test_catchall_allow_rule_is_unaffected():
+    """The trailing allow-all `generate` emits uses prefix_values ["/"] explicitly — it must keep
+    matching everything, or legit traffic 403s on XC's default-deny."""
+    assert _deny({"prefix_values": ["/"]})["prefix_values"] == ["/"]