diff --git a/frontend/src/App.tsx b/frontend/src/App.tsx
index d18b3b1..069ecb6 100644
--- a/frontend/src/App.tsx
+++ b/frontend/src/App.tsx
@@ -245,9 +245,16 @@ export default function App() {
     const id = generateUUID()
     const isContainerNode = data.container_mode === true
     const parentNode = data.parent_id ? nodes.find((n) => n.id === data.parent_id) : null
-    // Children position is relative to parent; place near top-left with padding
-    const position = parentNode
-      ? { x: 20, y: 50 }
+    // Only nest when the parent is an actual container. For a non-container
+    // parent the LXC/VM stays a free node (linked by a virtual edge) — setting
+    // extent:'parent' on a non-container would trap it inside the parent's tiny
+    // bounding box with no way to drag it out (issue #205 follow-up).
+    const nestInParent = !!parentNode?.data.container_mode
+    // Seed an ABSOLUTE position near the container's top-left; addNode converts
+    // it to container-relative. addNode is the single authority for parentId /
+    // extent, so we don't set them here.
+    const position = nestInParent && parentNode
+      ? { x: parentNode.position.x + 20, y: parentNode.position.y + 50 }
       : { x: 300, y: 300 }
 
     const newNode: Node<NodeData> = {
@@ -255,7 +262,6 @@ export default function App() {
       type: data.type ?? 'generic',
       position,
       data: { status: 'unknown', services: [], ...data } as NodeData,
-      ...(data.parent_id ? { parentId: data.parent_id, extent: 'parent' as const } : {}),
       ...(isContainerNode ? { width: 300, height: 200 } : {}),
     }
     addNode(newNode)
diff --git a/frontend/src/stores/__tests__/canvasStore.test.ts b/frontend/src/stores/__tests__/canvasStore.test.ts
index 3f39c0a..9c69b99 100644
--- a/frontend/src/stores/__tests__/canvasStore.test.ts
+++ b/frontend/src/stores/__tests__/canvasStore.test.ts
@@ -150,6 +150,23 @@ describe('canvasStore', () => {
     expect(nested?.extent).toBe('parent')
   })
 
+  it('addNode strips parentId/extent when the parent is not a container', () => {
+    // Regression: a stray extent:'parent' on a non-container parent traps the
+    // node in the parent's tiny box with no way to drag it out (issue #205).
+    const parent = { ...makeNode('p1', { container_mode: false }), position: { x: 100, y: 100 } }
+    useCanvasStore.getState().addNode(parent)
+    const trapped: Node<NodeData> = {
+      ...makeNode('c1', { parent_id: 'p1' }),
+      position: { x: 150, y: 180 },
+      parentId: 'p1',
+      extent: 'parent',
+    }
+    useCanvasStore.getState().addNode(trapped)
+    const child = useCanvasStore.getState().nodes.find((n) => n.id === 'c1')
+    expect(child?.parentId).toBeUndefined()
+    expect(child?.extent).toBeUndefined()
+  })
+
   it('docker_container nests under docker_host with container_mode on', () => {
     const host = { ...makeNode('dh1', { type: 'docker_host', container_mode: true }), position: { x: 100, y: 100 } }
     const container = { ...makeNode('dc1', { type: 'docker_container' }), position: { x: 160, y: 180 } }
diff --git a/frontend/src/stores/canvasStore.ts b/frontend/src/stores/canvasStore.ts
index baad428..b1ba24e 100644
--- a/frontend/src/stores/canvasStore.ts
+++ b/frontend/src/stores/canvasStore.ts
@@ -289,7 +289,9 @@ export const useCanvasStore = create<CanvasState>((set) => ({
               y: Math.max(10, node.position.y - parent.position.y),
             },
           }
-        : node
+        // Not nesting: strip any parentId/extent a caller may have set so a
+        // non-container parent can't trap the node in its bounding box.
+        : { ...node, parentId: undefined, extent: undefined }
       // Parents must come before children in the array (React Flow requirement)
       const withoutNew = state.nodes.filter((n) => n.id !== node.id)
       if (enriched.parentId) {