diff --git a/scanners/cache-prefix-scanner.mjs b/scanners/cache-prefix-scanner.mjs
index 62895ea..0e41822 100644
--- a/scanners/cache-prefix-scanner.mjs
+++ b/scanners/cache-prefix-scanner.mjs
@@ -30,7 +30,28 @@ const SCANNER = 'CPS';
 // hits per turn, not to chase every inline date in a long backlog file.
 const CACHED_PREFIX_LINES = 150;
 
-// Volatile-pattern set (extends token-hotspots.mjs Pattern A).
+// CC-provided substitution variables that resolve to a stable per-install or
+// per-project path (e.g. "${CLAUDE_PLUGIN_ROOT}/hooks/x.mjs"). CC expands them
+// to the same value every turn, so they never break the prompt cache — unlike a
+// runtime ${TIMESTAMP}. Excluded from the ${VAR} volatile flag (M-BUG-7).
+const STABLE_CC_VARS = new Set(['CLAUDE_PLUGIN_ROOT', 'CLAUDE_PROJECT_DIR']);
+
+// Matches every ${VAR} occurrence on a line so a line carrying only stable CC
+// vars is not mistaken for a runtime cache-buster.
+const VAR_RX = /\$\{([A-Z_][A-Z0-9_]*)\}/g;
+
+/** True when a line contains at least one non-CC-stable ${VAR} substitution. */
+function hasVolatileVar(line) {
+  VAR_RX.lastIndex = 0;
+  let m;
+  while ((m = VAR_RX.exec(line)) !== null) {
+    if (!STABLE_CC_VARS.has(m[1])) return true;
+  }
+  return false;
+}
+
+// Volatile-pattern set (extends token-hotspots.mjs Pattern A). The ${VAR} entry
+// is `varAware` — flagged via hasVolatileVar() so CC-stable vars are excluded.
 const VOLATILE_PATTERNS = [
   { rx: /\{timestamp\}/i, label: '{timestamp} placeholder' },
   { rx: /\{uuid\}/i, label: '{uuid} placeholder' },
@@ -41,7 +62,7 @@ const VOLATILE_PATTERNS = [
   { rx: /^\s*\[\d{4}-\d{2}-\d{2}/, label: 'dated log line [YYYY-MM-DD ...]' },
   // v5 N3 extensions:
   { rx: /^\s*!/, label: 'shell-exec line (! prefix)' },
-  { rx: /\$\{[A-Z_][A-Z0-9_]*\}/, label: '${VAR} substitution' },
+  { rx: /\$\{[A-Z_][A-Z0-9_]*\}/, label: '${VAR} substitution', varAware: true },
 ];
 
 /**
@@ -68,16 +89,33 @@ function findVolatileLines(content) {
   const out = [];
   if (!content) return out;
   const lines = content.split('\n').slice(0, CACHED_PREFIX_LINES);
+  let inFence = false;
   for (let i = 0; i < lines.length; i++) {
-    for (const { rx, label } of VOLATILE_PATTERNS) {
-      if (rx.test(lines[i])) {
-        out.push({
-          line: i + 1,
-          label,
-          snippet: lines[i].length > 120 ? lines[i].slice(0, 117) + '...' : lines[i],
-        });
-        break;
-      }
+    const line = lines[i];
+    // Fenced code blocks (``` or ~~~) hold illustrative, byte-stable literal
+    // text — a ${VAR} or timestamp shown inside one is documentation, not a
+    // runtime cache-buster — so the fence delimiters and their content are
+    // skipped (M-BUG-7).
+    if (/^\s*(```|~~~)/.test(line)) {
+      inFence = !inFence;
+      continue;
+    }
+    if (inFence) continue;
+    // Strip `inline code` spans before pattern-testing: a {date} or ${VAR}
+    // shown inside backticks is literal documentation text, byte-stable, not a
+    // runtime cache-buster (M-BUG-7). The original line is still reported as the
+    // snippet so context is preserved.
+    const probe = line.replace(/`[^`]*`/g, '');
+    for (const { rx, label, varAware } of VOLATILE_PATTERNS) {
+      // The ${VAR} pattern flags only non-CC-stable substitutions; every other
+      // pattern keeps its plain line test.
+      if (varAware ? !hasVolatileVar(probe) : !rx.test(probe)) continue;
+      out.push({
+        line: i + 1,
+        label,
+        snippet: line.length > 120 ? line.slice(0, 117) + '...' : line,
+      });
+      break;
     }
   }
   return out;
diff --git a/tests/fixtures/cps-fenced/inside-fence/CLAUDE.md b/tests/fixtures/cps-fenced/inside-fence/CLAUDE.md
new file mode 100644
index 0000000..5ccb2b6
--- /dev/null
+++ b/tests/fixtures/cps-fenced/inside-fence/CLAUDE.md
@@ -0,0 +1,46 @@
+# Fenced Documentation Project
+
+Stable preamble. All volatility below is illustrative, inside a code fence.
+Body line 4.
+Body line 5.
+Body line 6.
+Body line 7.
+Body line 8.
+Body line 9.
+Body line 10.
+Body line 11.
+Body line 12.
+Body line 13.
+Body line 14.
+Body line 15.
+Body line 16.
+Body line 17.
+Body line 18.
+Body line 19.
+Body line 20.
+Body line 21.
+Body line 22.
+Body line 23.
+Body line 24.
+Body line 25.
+Body line 26.
+Body line 27.
+Body line 28.
+Body line 29.
+Body line 30.
+Body line 31.
+Body line 32.
+Body line 33.
+Body line 34.
+```bash
+export STAMP=${TIMESTAMP}
+!deploy.sh --at 2026-06-26T10:00:00
+echo {date} > /tmp/log
+[2026-06-26 12:00] starting
+```
+Body line 41.
+Body line 42.
+Body line 43.
+Body line 44.
+Body line 45.
+Body line 46.
diff --git a/tests/fixtures/cps-fenced/mixed/CLAUDE.md b/tests/fixtures/cps-fenced/mixed/CLAUDE.md
new file mode 100644
index 0000000..cd55d8a
--- /dev/null
+++ b/tests/fixtures/cps-fenced/mixed/CLAUDE.md
@@ -0,0 +1,55 @@
+# Fenced Plus Prose Project
+
+Stable preamble. A fence below, plus one genuine volatile prose line.
+Body line 4.
+Body line 5.
+Body line 6.
+Body line 7.
+Body line 8.
+Body line 9.
+Body line 10.
+Body line 11.
+Body line 12.
+Body line 13.
+Body line 14.
+Body line 15.
+Body line 16.
+Body line 17.
+Body line 18.
+Body line 19.
+Body line 20.
+Body line 21.
+Body line 22.
+Body line 23.
+Body line 24.
+Body line 25.
+Body line 26.
+Body line 27.
+Body line 28.
+Body line 29.
+Body line 30.
+Body line 31.
+Body line 32.
+Body line 33.
+Body line 34.
+```bash
+export STAMP=${TIMESTAMP}  # documented, not live
+```
+Body line 38.
+Body line 39.
+Body line 40.
+Body line 41.
+Body line 42.
+Body line 43.
+Body line 44.
+Body line 45.
+Body line 46.
+Body line 47.
+Body line 48.
+Body line 49.
+!git log -1  # genuine shell-exec in live prose at line 50
+Body line 51.
+Body line 52.
+Body line 53.
+Body line 54.
+Body line 55.
diff --git a/tests/fixtures/cps-inline-code/mixed/CLAUDE.md b/tests/fixtures/cps-inline-code/mixed/CLAUDE.md
new file mode 100644
index 0000000..c39f00e
--- /dev/null
+++ b/tests/fixtures/cps-inline-code/mixed/CLAUDE.md
@@ -0,0 +1,55 @@
+# Inline Code Mixed Project
+
+Stable preamble. Backticked template plus a live var in prose.
+Body line 4.
+Body line 5.
+Body line 6.
+Body line 7.
+Body line 8.
+Body line 9.
+Body line 10.
+Body line 11.
+Body line 12.
+Body line 13.
+Body line 14.
+Body line 15.
+Body line 16.
+Body line 17.
+Body line 18.
+Body line 19.
+Body line 20.
+Body line 21.
+Body line 22.
+Body line 23.
+Body line 24.
+Body line 25.
+Body line 26.
+Body line 27.
+Body line 28.
+Body line 29.
+Body line 30.
+Body line 31.
+Body line 32.
+Body line 33.
+Body line 34.
+Body line 35.
+Body line 36.
+Body line 37.
+Body line 38.
+Body line 39.
+Output template is `run-{date}.md` (documented).
+Body line 41.
+Body line 42.
+Body line 43.
+Body line 44.
+Body line 45.
+Body line 46.
+Body line 47.
+Body line 48.
+Body line 49.
+Deployed at ${RELEASE_STAMP} on every push.
+Body line 51.
+Body line 52.
+Body line 53.
+Body line 54.
+Body line 55.
diff --git a/tests/fixtures/cps-inline-code/pure/CLAUDE.md b/tests/fixtures/cps-inline-code/pure/CLAUDE.md
new file mode 100644
index 0000000..241c303
--- /dev/null
+++ b/tests/fixtures/cps-inline-code/pure/CLAUDE.md
@@ -0,0 +1,46 @@
+# Inline Code Doc Project
+
+Stable preamble. A filename template is documented in backticks below.
+Body line 4.
+Body line 5.
+Body line 6.
+Body line 7.
+Body line 8.
+Body line 9.
+Body line 10.
+Body line 11.
+Body line 12.
+Body line 13.
+Body line 14.
+Body line 15.
+Body line 16.
+Body line 17.
+Body line 18.
+Body line 19.
+Body line 20.
+Body line 21.
+Body line 22.
+Body line 23.
+Body line 24.
+Body line 25.
+Body line 26.
+Body line 27.
+Body line 28.
+Body line 29.
+Body line 30.
+Body line 31.
+Body line 32.
+Body line 33.
+Body line 34.
+Body line 35.
+Body line 36.
+Body line 37.
+Body line 38.
+Body line 39.
+| `--brief <path>` | writes to `.claude/plans/run-{date}-{slug}.md` |
+Body line 41.
+Body line 42.
+Body line 43.
+Body line 44.
+Body line 45.
+Body line 46.
diff --git a/tests/fixtures/cps-stable-vars/non-whitelisted/CLAUDE.md b/tests/fixtures/cps-stable-vars/non-whitelisted/CLAUDE.md
new file mode 100644
index 0000000..dd1ffe9
--- /dev/null
+++ b/tests/fixtures/cps-stable-vars/non-whitelisted/CLAUDE.md
@@ -0,0 +1,46 @@
+# Non-Whitelisted Var Project
+
+Stable preamble with a genuine runtime substitution below.
+Body line 4.
+Body line 5.
+Body line 6.
+Body line 7.
+Body line 8.
+Body line 9.
+Body line 10.
+Body line 11.
+Body line 12.
+Body line 13.
+Body line 14.
+Body line 15.
+Body line 16.
+Body line 17.
+Body line 18.
+Body line 19.
+Body line 20.
+Body line 21.
+Body line 22.
+Body line 23.
+Body line 24.
+Body line 25.
+Body line 26.
+Body line 27.
+Body line 28.
+Body line 29.
+Body line 30.
+Body line 31.
+Body line 32.
+Body line 33.
+Body line 34.
+Body line 35.
+Body line 36.
+Body line 37.
+Body line 38.
+Body line 39.
+Deployed build tag: ${DEPLOY_TIMESTAMP} (changes every release).
+Body line 41.
+Body line 42.
+Body line 43.
+Body line 44.
+Body line 45.
+Body line 46.
diff --git a/tests/fixtures/cps-stable-vars/whitelisted/CLAUDE.md b/tests/fixtures/cps-stable-vars/whitelisted/CLAUDE.md
new file mode 100644
index 0000000..3fb0961
--- /dev/null
+++ b/tests/fixtures/cps-stable-vars/whitelisted/CLAUDE.md
@@ -0,0 +1,46 @@
+# Stable CC Vars Project
+
+Stable preamble — only CC-provided path vars appear below.
+Body line 4.
+Body line 5.
+Body line 6.
+Body line 7.
+Body line 8.
+Body line 9.
+Body line 10.
+Body line 11.
+Body line 12.
+Body line 13.
+Body line 14.
+Body line 15.
+Body line 16.
+Body line 17.
+Body line 18.
+Body line 19.
+Body line 20.
+Body line 21.
+Body line 22.
+Body line 23.
+Body line 24.
+Body line 25.
+Body line 26.
+Body line 27.
+Body line 28.
+Body line 29.
+Body line 30.
+Body line 31.
+Body line 32.
+Body line 33.
+Body line 34.
+Body line 35.
+Body line 36.
+Body line 37.
+Body line 38.
+Body line 39.
+Hooks resolve under ${CLAUDE_PLUGIN_ROOT}/hooks and project root is ${CLAUDE_PROJECT_DIR}.
+Body line 41.
+Body line 42.
+Body line 43.
+Body line 44.
+Body line 45.
+Body line 46.
diff --git a/tests/scanners/cache-prefix.test.mjs b/tests/scanners/cache-prefix.test.mjs
index aecea00..e4f3d00 100644
--- a/tests/scanners/cache-prefix.test.mjs
+++ b/tests/scanners/cache-prefix.test.mjs
@@ -86,6 +86,66 @@ describe('CPS scanner — volatile content in @imported files (v5.10 B6)', () =>
   });
 });
 
+describe('CPS scanner — CC-stable vars are not cache-busters (M-BUG-7)', () => {
+  it('does NOT flag ${CLAUDE_PLUGIN_ROOT} / ${CLAUDE_PROJECT_DIR} in prose', async () => {
+    // These are CC-provided path substitutions that resolve to a stable value
+    // every turn — referencing them in CLAUDE.md prose is not a cache-buster.
+    const result = await runScanner('cps-stable-vars/whitelisted');
+    const f = result.findings.find(x => /volatile content inside cached prefix/i.test(x.title || ''));
+    assert.equal(f, undefined,
+      `CC-stable path vars must not trip CPS; got: ${f?.evidence}`);
+  });
+
+  it('STILL flags a genuine non-CC ${VAR} substitution (whitelist is selective)', async () => {
+    const result = await runScanner('cps-stable-vars/non-whitelisted');
+    const f = result.findings.find(x => /volatile content inside cached prefix/i.test(x.title || ''));
+    assert.ok(f, `expected a finding for a genuine runtime var; got none`);
+    assert.match(String(f.evidence || ''), /line 40/);
+    assert.match(String(f.evidence || ''), /\$\{VAR\} substitution/i);
+  });
+});
+
+describe('CPS scanner — volatility inside fenced code blocks is documentation (M-BUG-7)', () => {
+  it('does NOT flag volatile-looking lines inside a ```fence```', async () => {
+    // Content inside a fenced code block is illustrative, byte-stable literal
+    // text — not runtime volatility — so it must not break the cached prefix.
+    const result = await runScanner('cps-fenced/inside-fence');
+    const f = result.findings.find(x => /volatile content inside cached prefix/i.test(x.title || ''));
+    assert.equal(f, undefined,
+      `fenced code content must not trip CPS; got: ${f?.evidence}`);
+  });
+
+  it('STILL flags genuine volatility in live prose outside the fence', async () => {
+    const result = await runScanner('cps-fenced/mixed');
+    const f = result.findings.find(x => /volatile content inside cached prefix/i.test(x.title || ''));
+    assert.ok(f, `expected a finding for the out-of-fence volatile line; got none`);
+    assert.match(String(f.evidence || ''), /line 50/);
+    assert.match(String(f.evidence || ''), /shell-exec/i);
+    assert.doesNotMatch(String(f.evidence || ''), /line 3[567]/,
+      'fenced lines 35–37 must not appear in the evidence');
+  });
+});
+
+describe('CPS scanner — volatility inside inline code is documentation (M-BUG-7)', () => {
+  it('does NOT flag a {date} placeholder shown inside `inline code`', async () => {
+    // A filename template like `.claude/plans/run-{date}.md` in backticks is
+    // literal documentation text — byte-stable, not a runtime substitution.
+    const result = await runScanner('cps-inline-code/pure');
+    const f = result.findings.find(x => /volatile content inside cached prefix/i.test(x.title || ''));
+    assert.equal(f, undefined,
+      `inline-code documentation must not trip CPS; got: ${f?.evidence}`);
+  });
+
+  it('STILL flags a live ${VAR} that sits outside backticks', async () => {
+    const result = await runScanner('cps-inline-code/mixed');
+    const f = result.findings.find(x => /volatile content inside cached prefix/i.test(x.title || ''));
+    assert.ok(f, `expected a finding for the out-of-backtick volatile line; got none`);
+    assert.match(String(f.evidence || ''), /line 50/);
+    assert.doesNotMatch(String(f.evidence || ''), /line 40/,
+      'the backticked {date} on line 40 must not appear in the evidence');
+  });
+});
+
 describe('CPS scanner — orchestrator wiring', () => {
   it('CPS appears in scan-orchestrator scanner list', async () => {
     const orch = await import('../../scanners/scan-orchestrator.mjs');