diff --git a/client/server/extend_authsession_test.go b/client/server/extend_authsession_test.go
new file mode 100644
index 000000000..a1a048a7c
--- /dev/null
+++ b/client/server/extend_authsession_test.go
@@ -0,0 +1,42 @@
+package server
+
+import (
+	"errors"
+	"fmt"
+	"testing"
+
+	"github.com/stretchr/testify/require"
+	"google.golang.org/grpc/codes"
+	gstatus "google.golang.org/grpc/status"
+)
+
+func TestInnermostStatus(t *testing.T) {
+	t.Run("wrapped gRPC status", func(t *testing.T) {
+		inner := gstatus.Error(codes.PermissionDenied, "peer is already registered by a different User or a Setup Key")
+		// Mirror the daemon wrap chain: engine wraps with %w, mgm error is the inner status.
+		wrapped := fmt.Errorf("extend auth session on management: %w", inner)
+
+		st := innermostStatus(wrapped)
+		require.NotNil(t, st)
+		require.Equal(t, codes.PermissionDenied, st.Code())
+		require.Equal(t, "peer is already registered by a different User or a Setup Key", st.Message())
+	})
+
+	t.Run("deepest status wins over an outer one", func(t *testing.T) {
+		inner := gstatus.Error(codes.PermissionDenied, "deepest")
+		chain := fmt.Errorf("outer: %w", fmt.Errorf("mid: %w", inner))
+
+		st := innermostStatus(chain)
+		require.NotNil(t, st)
+		require.Equal(t, codes.PermissionDenied, st.Code())
+		require.Equal(t, "deepest", st.Message())
+	})
+
+	t.Run("no status in chain", func(t *testing.T) {
+		require.Nil(t, innermostStatus(errors.New("plain error")))
+	})
+
+	t.Run("nil error", func(t *testing.T) {
+		require.Nil(t, innermostStatus(nil))
+	})
+}
diff --git a/client/server/server.go b/client/server/server.go
index 13ae11b6c..ea9f41951 100644
--- a/client/server/server.go
+++ b/client/server/server.go
@@ -1771,7 +1771,14 @@ func (s *Server) WaitExtendAuthSession(
 
 	deadline, err := engine.ExtendAuthSession(ctx, tokenInfo.GetTokenToUse())
 	if err != nil {
-		return nil, gstatus.Errorf(codes.Internal, "management ExtendAuthSession failed: %v", err)
+		// Log the full wrapped chain, but return only the innermost gRPC
+		// status (code + clean desc) so the UI shows the root cause, not
+		// the daemon's wrapping layers.
+		log.Errorf("management ExtendAuthSession failed: %v", err)
+		if st := innermostStatus(err); st != nil {
+			return nil, gstatus.Error(st.Code(), st.Message())
+		}
+		return nil, gstatus.Errorf(codes.Internal, "%v", err)
 	}
 
 	resp := &proto.WaitExtendAuthSessionResponse{}
@@ -2392,3 +2399,16 @@ func logoutPeerGone(err error) bool {
 	}
 	return false
 }
+
+// innermostStatus walks the wrap chain and returns the deepest gRPC status,
+// or nil when none is present. gstatus.FromError does not unwrap, so a status
+// wrapped with fmt.Errorf %w would otherwise be missed.
+func innermostStatus(err error) *gstatus.Status {
+	var found *gstatus.Status
+	for e := err; e != nil; e = errors.Unwrap(e) {
+		if s, ok := gstatus.FromError(e); ok {
+			found = s
+		}
+	}
+	return found
+}