[spelech]

Require explicit opt-in (allow_fallback) and a compatible API model (fallback_dense_model) before falling back from local FastEmbed to API embeddings. If fallback is not explicitly enabled, local FastEmbed initialization failure raises a visible error and remains in local mode without making outbound API requests. Track requested vs. effective provider and dense model in system configuration metadata and response schemas.

Fixes #52

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PR created automatically by Jules for task 10830566446682326892 started by @spelech

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[spelech]

@jules Please review and address the following items for this PR:

Issues to Fix

1. Handle Invalid Models with HTTP 400 Bad Request:
   • In app/api/routers/settings.py:445, when allow_fallback=True is supplied alongside an unknown/invalid model, catch ValueError and return an HTTP 400 Bad Request ({"status": "error", "error": str(ve)}) rather than an unhandled 500 error.
2. Test Case Coverage:
   • Add a test case in tests/backend/test_indexer_and_embeddings.py validating that invalid fallback model names produce a 400 response with descriptive error message.
3. Requirement Traceability:
   • Tag the test with @pytest.mark.requirement("EMB-FALLBACK-01").
   • Update docs/REQUIREMENTS.md.

How to Confirm the Fix

Run the following commands to confirm everything passes:

pytest tests/backend/test_indexer_and_embeddings.py -v
python3 scripts/generate_requirements.py
pytest tests/backend/test_requirements_sync.py