diff --git a/rust/src/tools/ctx_semantic_search/dense.rs b/rust/src/tools/ctx_semantic_search/dense.rs
index 92282d6fe..d6ec3e5df 100644
--- a/rust/src/tools/ctx_semantic_search/dense.rs
+++ b/rust/src/tools/ctx_semantic_search/dense.rs
@@ -64,6 +64,26 @@ pub(crate) fn dense_build_hint(pending: usize, compact: bool) -> String {
     }
 }
 
+/// #1259: is the default BM25 ranking running *because* the dense index was
+/// never built? Cheap enough for the hot path — a file-existence check, no
+/// engine load. Callers use it to label the degradation instead of reporting
+/// lexical hits as "semantic". False when dense is deliberately off (#686):
+/// there is nothing to build then.
+pub(crate) fn dense_index_missing(root: &Path) -> bool {
+    #[cfg(feature = "embeddings")]
+    {
+        HybridConfig::from_config().dense_enabled
+            && !crate::core::index_namespace::vectors_dir(root)
+                .join("embeddings.bin")
+                .exists()
+    }
+    #[cfg(not(feature = "embeddings"))]
+    {
+        let _ = root;
+        false
+    }
+}
+
 pub(crate) fn hybrid_search_mode(
     query: &str,
     root: &Path,
diff --git a/rust/src/tools/ctx_semantic_search/mod.rs b/rust/src/tools/ctx_semantic_search/mod.rs
index 022fe57e5..7f551bcf8 100644
--- a/rust/src/tools/ctx_semantic_search/mod.rs
+++ b/rust/src/tools/ctx_semantic_search/mod.rs
@@ -43,6 +43,9 @@ pub fn handle(
     };
 
     let compact = crp_mode.is_tdd();
+    // #1259: separate "caller asked for BM25" from "BM25 is what the default
+    // resolves to" — only the latter is a silent degradation worth labelling.
+    let mode_defaulted = mode.is_none();
     let mode = mode.unwrap_or("bm25").to_lowercase();
     let workspace = workspace.unwrap_or(false);
     let artifacts = artifacts.unwrap_or(false);
@@ -74,15 +77,30 @@ pub fn handle(
             }
             results.truncate(top_k);
 
+            // #1259: never call a lexical fallback "semantic". When no mode was
+            // requested and the dense index was never built, name the
+            // degradation and the one command that fixes it.
+            let degraded = mode_defaulted && dense_index_missing(root);
             let header = if compact {
                 format!(
-                    "semantic_search(bm25,{top_k}) → {} results, {} chunks indexed\n",
+                    "semantic_search({},{top_k}) → {} results, {} chunks indexed\n",
+                    if degraded {
+                        "bm25,dense-not-built"
+                    } else {
+                        "bm25"
+                    },
                     results.len(),
                     index.doc_count
                 )
             } else {
                 format!(
-                    "Semantic search (BM25): \"{}\" ({} results from {} indexed chunks)\n",
+                    "{}: \"{}\" ({} results from {} indexed chunks)\n",
+                    if degraded {
+                        "Lexical search (BM25 — dense index not built, \
+                         run: lean-ctx index build-semantic)"
+                    } else {
+                        "Semantic search (BM25)"
+                    },
                     truncate_query(query, 60),
                     results.len(),
                     index.doc_count,
diff --git a/rust/src/tools/ctx_semantic_search/tests.rs b/rust/src/tools/ctx_semantic_search/tests.rs
index 78e7296c3..035079955 100644
--- a/rust/src/tools/ctx_semantic_search/tests.rs
+++ b/rust/src/tools/ctx_semantic_search/tests.rs
@@ -20,6 +20,22 @@ mod filter_tests {
     }
 }
 
+#[cfg(test)]
+mod dense_availability_tests {
+    #[allow(clippy::wildcard_imports)]
+    use super::super::*;
+
+    /// #1259: a project that never built embeddings must be reported as
+    /// degraded, so the default path can say so instead of calling BM25 hits
+    /// "semantic".
+    #[test]
+    fn missing_embeddings_bin_is_reported_as_degraded() {
+        let dir = std::env::temp_dir().join("lean-ctx-dense-missing-test");
+        let _ = std::fs::create_dir_all(&dir);
+        assert_eq!(dense_index_missing(&dir), cfg!(feature = "embeddings"));
+    }
+}
+
 #[cfg(test)]
 mod root_resolution_tests {
     #[allow(clippy::wildcard_imports)]