diff --git a/CHANGELOG.md b/CHANGELOG.md
index 5ae94ed..c06afe1 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -236,6 +236,26 @@ with v0.3.x peers.
 
 ### Fixed
 
+- Outbound connection initiation now honors the `node.limits.max_peers`
+  cap that was previously only checked on inbound msg1 admission. Four
+  paths gated: auto-reconnect retries (`process_pending_retries`),
+  Nostr-mediated discovery's `BootstrapEvent::Established` adoption, and
+  both sides of the Nostr-mediated NAT-traversal punch (offer initiation
+  in the runtime's outgoing path, offer acceptance in the responder's
+  incoming-offer handler). At saturation, a node now performs zero
+  outbound work on these paths; only existing peer maintenance and
+  overlay-advert refresh continue. The inbound gate at
+  `handshake.rs:1114` is unchanged. Introduces a shared
+  `Node::outbound_admission_check()` helper so the invariant is
+  grep-able and unit-testable.
+- Mesh-size estimator (`compute_mesh_size`) no longer double-counts the
+  parent's bloom cardinality during the transient cache window after a
+  local parent-switch. Symptom: `fipsctl show status` / fipstop displayed
+  mesh size nearly-but-not-exactly doubling during tree rebalancing.
+  Fix: explicit parent-skip at the head of the children loop, making the
+  disjoint-subtree invariant structural rather than dependent on
+  `peer_declaration` cache freshness. Per-peer 500 ms rate-limiter and
+  overall recompute cadence are unchanged.
 - Spanning-tree state distribution is now eventually-consistent.
   Previously every `send_tree_announce_to_all` call site fired only
   on a local state-change event (parent switch, self-root promotion,
diff --git a/src/discovery/nostr/runtime.rs b/src/discovery/nostr/runtime.rs
index aceb7e2..1633bc5 100644
--- a/src/discovery/nostr/runtime.rs
+++ b/src/discovery/nostr/runtime.rs
@@ -1,6 +1,7 @@
 use std::collections::{HashMap, HashSet};
 use std::net::SocketAddr;
 use std::sync::Arc;
+use std::sync::atomic::{AtomicBool, Ordering};
 use std::time::{Duration, Instant};
 
 use nostr::nips::nip17;
@@ -165,6 +166,13 @@ pub struct NostrDiscovery {
     /// (keyed by `TransportId.as_u32()`). Populated on demand by
     /// `learn_public_udp_addr()` and refreshed by TTL.
     public_udp_addr_cache: RwLock<HashMap<u32, CachedPublicUdpAddr>>,
+    /// Outbound-admission flag refreshed once per Node tick from
+    /// `Node::outbound_admission_check()`. Used to suppress NAT-traversal
+    /// punch initiation (initiator path) and offer acceptance (responder
+    /// path) when the Node is at `max_peers`. Loose granularity by
+    /// design: the inbound msg1 gate in `handshake.rs` remains the
+    /// authoritative cap.
+    outbound_admission: AtomicBool,
 }
 
 impl NostrDiscovery {
@@ -227,6 +235,7 @@ impl NostrDiscovery {
             advertise_task: Mutex::new(None),
             failure_state,
             public_udp_addr_cache: RwLock::new(HashMap::new()),
+            outbound_admission: AtomicBool::new(true),
         });
 
         // Subscribe to the relay-pool broadcast channel BEFORE issuing the
@@ -248,6 +257,19 @@ impl NostrDiscovery {
         Ok(runtime)
     }
 
+    /// Update the cached outbound-admission flag. Called once per Node
+    /// tick with the current value of `Node::outbound_admission_check()`.
+    /// Cheap atomic store; safe to call unconditionally.
+    pub fn set_outbound_admission(&self, allow: bool) {
+        self.outbound_admission.store(allow, Ordering::Relaxed);
+    }
+
+    /// Read the cached outbound-admission flag. Returns `true` when the
+    /// Node is below `max_peers` (or `max_peers == 0`), `false` otherwise.
+    pub(crate) fn outbound_admission_allowed(&self) -> bool {
+        self.outbound_admission.load(Ordering::Relaxed)
+    }
+
     pub async fn request_connect(self: &Arc<Self>, peer_config: PeerConfig) {
         let peer_npub = peer_config.npub.clone();
         {
@@ -981,6 +1003,13 @@ impl NostrDiscovery {
         peer_config: PeerConfig,
     ) -> Result<EstablishedTraversal, BootstrapError> {
         let peer_short = short_npub(&peer_config.npub);
+        if !self.outbound_admission_allowed() {
+            debug!(
+                peer = %peer_short,
+                "traversal: initiator suppressed, Node at capacity"
+            );
+            return Err(BootstrapError::Disabled);
+        }
         debug!(peer = %peer_short, "traversal: initiator starting");
         let target_pubkey =
             PublicKey::parse(&peer_config.npub).map_err(|e| BootstrapError::InvalidPeerNpub {
@@ -1163,6 +1192,14 @@ impl NostrDiscovery {
         sender_npub: String,
     ) -> Result<(), BootstrapError> {
         let peer_short = short_npub(&sender_npub);
+        if !self.outbound_admission_allowed() {
+            debug!(
+                peer = %peer_short,
+                session = %short_id(&offer.session_id),
+                "traversal: incoming offer dropped, Node at capacity"
+            );
+            return Ok(());
+        }
         let offer_received_at = now_ms();
         debug!(
             peer = %peer_short,
@@ -1665,6 +1702,7 @@ impl NostrDiscovery {
             advertise_task: Mutex::new(None),
             failure_state,
             public_udp_addr_cache: RwLock::new(HashMap::new()),
+            outbound_admission: AtomicBool::new(true),
         }
     }
 
diff --git a/src/node/lifecycle.rs b/src/node/lifecycle.rs
index f285d75..526d57c 100644
--- a/src/node/lifecycle.rs
+++ b/src/node/lifecycle.rs
@@ -446,6 +446,13 @@ impl Node {
             return;
         };
 
+        // Refresh the runtime's outbound-admission view once per tick.
+        // The runtime task lives in a separate tokio context with no Node
+        // reference, so we publish current capacity state through a
+        // cheap atomic store. One-tick lag is acceptable: the inbound
+        // msg1 gate in handshake.rs remains the authoritative cap.
+        bootstrap.set_outbound_admission(self.outbound_admission_check());
+
         if let Err(err) = self.refresh_overlay_advert(&bootstrap).await {
             debug!(error = %err, "Failed to refresh local Nostr overlay advert");
         }
@@ -453,6 +460,15 @@ impl Node {
         for event in bootstrap.drain_events().await {
             match event {
                 BootstrapEvent::Established { traversal } => {
+                    if !self.outbound_admission_check() {
+                        debug!(
+                            peer_npub = %traversal.peer_npub,
+                            peers = self.peers.len(),
+                            max_peers = self.max_peers,
+                            "Dropping established NAT traversal: at capacity"
+                        );
+                        continue;
+                    }
                     let peer_npub = traversal.peer_npub.clone();
                     if let Ok(peer_identity) = PeerIdentity::from_npub(&peer_npub) {
                         let peer_addr = *peer_identity.node_addr();
diff --git a/src/node/mod.rs b/src/node/mod.rs
index 1d01920..949b4dc 100644
--- a/src/node/mod.rs
+++ b/src/node/mod.rs
@@ -1276,6 +1276,9 @@ impl Node {
 
         // Children's filters: each child's subtree is disjoint
         for (peer_addr, peer) in &self.peers {
+            if peer_addr == &parent_id {
+                continue;
+            }
             if let Some(decl) = self.tree_state.peer_declaration(peer_addr)
                 && *decl.parent_id() == my_addr
             {
@@ -1435,6 +1438,18 @@ impl Node {
         self.max_peers = max;
     }
 
+    /// Returns false when we are at or above the configured `max_peers`
+    /// cap, suppressing outbound connection-initiation. `max_peers == 0`
+    /// is the "no cap" sentinel and always returns true. The inbound
+    /// msg1 gate in `handshake.rs` is the authoritative cap; this helper
+    /// keeps the four outbound initiation paths (auto-reconnect retries,
+    /// Nostr-discovery `Established` adoption, and both sides of the
+    /// Nostr-mediated NAT-traversal punch) from doing pointless work
+    /// when saturated.
+    pub(crate) fn outbound_admission_check(&self) -> bool {
+        self.max_peers == 0 || self.peers.len() < self.max_peers
+    }
+
     /// Set the maximum number of links.
     pub fn set_max_links(&mut self, max: usize) {
         self.max_links = max;
diff --git a/src/node/retry.rs b/src/node/retry.rs
index 8ddf6dc..34f7e0e 100644
--- a/src/node/retry.rs
+++ b/src/node/retry.rs
@@ -231,6 +231,16 @@ impl Node {
             return;
         }
 
+        if !self.outbound_admission_check() {
+            debug!(
+                peers = self.peers.len(),
+                max_peers = self.max_peers,
+                retry_pending = self.retry_pending.len(),
+                "Suppressing auto-reconnect retries: at capacity"
+            );
+            return;
+        }
+
         // Collect retries that are due
         let due: Vec<NodeAddr> = self
             .retry_pending
diff --git a/src/node/tests/bloom.rs b/src/node/tests/bloom.rs
index c8b9264..ccac45b 100644
--- a/src/node/tests/bloom.rs
+++ b/src/node/tests/bloom.rs
@@ -443,6 +443,96 @@ async fn test_bloom_filter_split_horizon() {
     cleanup_nodes(&mut nodes).await;
 }
 
+/// Regression for `compute_mesh_size` parent double-count.
+///
+/// Reproduces the stale-peer-declaration window that follows a local
+/// parent-switch: our `my_declaration().parent_id()` already names P, but
+/// the cached `peer_declaration(P)` is still the pre-switch advert in
+/// which P names US as its parent. Without the explicit parent-skip in
+/// the children loop, P would be iterated as a child and its bloom
+/// cardinality added a second time on top of the parent contribution.
+#[test]
+fn compute_mesh_size_skips_parent_under_stale_peer_declaration() {
+    use crate::bloom::BloomFilter;
+    use crate::peer::ActivePeer;
+    use crate::tree::ParentDeclaration;
+
+    let mut node = make_node();
+    let my_addr = *node.tree_state().my_node_addr();
+
+    // Generate a parent identity strictly less than my_addr so the
+    // tree_state defensive check (my_node_addr > parent_root) accepts
+    // the extension; otherwise recompute_coords would demote us back
+    // to self-root and is_root() would stay true.
+    let (parent_identity, parent_addr) = loop {
+        let candidate = make_peer_identity();
+        let addr = *candidate.node_addr();
+        if addr < my_addr {
+            break (candidate, addr);
+        }
+    };
+    let mut parent_peer = ActivePeer::new(parent_identity, LinkId::new(1), 0);
+    let mut parent_filter = BloomFilter::new();
+    for i in 0..5u8 {
+        let mut bytes = [0u8; 16];
+        bytes[0] = 0x80 | i; // distinct namespace
+        parent_filter.insert(&NodeAddr::from_bytes(bytes));
+    }
+    parent_peer.update_filter(parent_filter, 1, 0);
+    node.peers.insert(parent_addr, parent_peer);
+
+    // Inject legitimate child Q with a 3-entry inbound filter.
+    let child_identity = make_peer_identity();
+    let child_addr = *child_identity.node_addr();
+    let mut child_peer = ActivePeer::new(child_identity, LinkId::new(2), 0);
+    let mut child_filter = BloomFilter::new();
+    for i in 0..3u8 {
+        let mut bytes = [0u8; 16];
+        bytes[0] = 0xC0 | i;
+        child_filter.insert(&NodeAddr::from_bytes(bytes));
+    }
+    child_peer.update_filter(child_filter, 1, 0);
+    node.peers.insert(child_addr, child_peer);
+
+    // Seed parent ancestry first so recompute_coords can extend it and
+    // flip is_root() to false; child ancestry is for completeness.
+    let parent_ancestry = crate::tree::TreeCoordinate::root_with_meta(parent_addr, 1, 1);
+    let child_ancestry = crate::tree::TreeCoordinate::root_with_meta(child_addr, 1, 1);
+    // Inject the stale-cache scenario: peer_declaration(P) still names
+    // US (M) as P's parent (the pre-switch advert that the cache hasn't
+    // refreshed yet). Q is a legitimate child also naming M as parent.
+    let parent_decl_stale = ParentDeclaration::new(parent_addr, my_addr, 1, 1);
+    let child_decl = ParentDeclaration::new(child_addr, my_addr, 1, 1);
+    node.tree_state_mut()
+        .update_peer(parent_decl_stale, parent_ancestry);
+    node.tree_state_mut()
+        .update_peer(child_decl, child_ancestry);
+
+    // Switch our parent to P and recompute coords so root flips off self.
+    node.tree_state_mut().set_parent(parent_addr, 2, 1);
+    node.tree_state_mut().recompute_coords();
+    assert!(
+        !node.tree_state().is_root(),
+        "test setup broken: node should not be its own root after parent switch"
+    );
+
+    node.compute_mesh_size();
+
+    let estimate = node
+        .estimated_mesh_size()
+        .expect("estimator should produce a value with filter data present");
+
+    // Expected (parent counted once + child counted once): 1 + 5 + 3 = 9.
+    // Unfixed (parent double-counted via children loop): 1 + 2*5 + 3 = 14.
+    // The estimator's log-based math rounds, so allow +/-1 tolerance.
+    let diff = (estimate as i64 - 9).abs();
+    assert!(
+        diff <= 1,
+        "expected mesh-size estimate ~9 (1+5+3), got {} (double-count fingerprint is ~14)",
+        estimate
+    );
+}
+
 /// 100-node random graph: bloom filter exchange at scale.
 #[tokio::test]
 async fn test_bloom_filter_convergence_100_nodes() {
diff --git a/src/node/tests/unit.rs b/src/node/tests/unit.rs
index fa77957..03a31d8 100644
--- a/src/node/tests/unit.rs
+++ b/src/node/tests/unit.rs
@@ -1360,3 +1360,172 @@ async fn test_seed_path_mtu_noop_for_unknown_transport() {
         "Seed must be a no-op when transport_id is not registered"
     );
 }
+
+// === Outbound admission gate tests ===
+
+/// Inject `count` synthetic active peers into `node.peers` so peer_count()
+/// reflects a desired saturation level for admission-gate tests.
+fn inject_dummy_peers(node: &mut Node, count: usize) {
+    use crate::peer::ActivePeer;
+    for i in 0..count {
+        let identity = make_peer_identity();
+        let addr = *identity.node_addr();
+        let peer = ActivePeer::new(identity, LinkId::new((i + 1) as u64), 0);
+        node.peers.insert(addr, peer);
+    }
+}
+
+#[test]
+fn outbound_admission_check_direct() {
+    // max_peers cap honored: above-cap returns false, below-cap returns true.
+    let mut node = make_node();
+    node.set_max_peers(3);
+
+    assert!(node.outbound_admission_check(), "0/3 should be admissible");
+    inject_dummy_peers(&mut node, 2);
+    assert!(node.outbound_admission_check(), "2/3 should be admissible");
+    inject_dummy_peers(&mut node, 1);
+    assert!(
+        !node.outbound_admission_check(),
+        "3/3 (at cap) should suppress"
+    );
+    inject_dummy_peers(&mut node, 1);
+    assert!(
+        !node.outbound_admission_check(),
+        "4/3 (above cap) should suppress"
+    );
+
+    // No-cap sentinel: max_peers == 0 admits unconditionally.
+    let mut uncapped = make_node();
+    uncapped.set_max_peers(0);
+    assert!(uncapped.outbound_admission_check());
+    inject_dummy_peers(&mut uncapped, 50);
+    assert!(
+        uncapped.outbound_admission_check(),
+        "max_peers=0 (no cap) must always admit"
+    );
+}
+
+#[tokio::test]
+async fn process_pending_retries_gated_at_capacity() {
+    let mut node = make_node();
+    node.set_max_peers(2);
+    inject_dummy_peers(&mut node, 2);
+
+    // Queue a retry that would otherwise be due.
+    let peer_identity = Identity::generate();
+    let peer_npub = peer_identity.npub();
+    let peer_node_addr = *PeerIdentity::from_npub(&peer_npub).unwrap().node_addr();
+    let mut state = super::super::retry::RetryState::new(crate::config::PeerConfig::new(
+        peer_npub,
+        "udp",
+        "127.0.0.1:9",
+    ));
+    state.retry_after_ms = 0;
+    state.reconnect = true;
+    node.retry_pending.insert(peer_node_addr, state);
+
+    let before_peers = node.peer_count();
+    let before_connections = node.connection_count();
+
+    node.process_pending_retries(1_000).await;
+
+    // At capacity: gate short-circuits before due-list collection. The
+    // retry entry must still be present (untouched) and no connection
+    // attempt may have been started. Without the gate, the due-list
+    // collector would pick the entry up, fire `initiate_peer_connection`
+    // (which fails without a registered transport), and the failure
+    // handler would call `schedule_retry`, bumping `retry_count` to 1.
+    let state = node
+        .retry_pending
+        .get(&peer_node_addr)
+        .expect("retry entry must be preserved when suppressed at capacity");
+    assert_eq!(
+        state.retry_count, 0,
+        "gate must short-circuit before initiate_peer_connection; \
+         a bumped retry_count is the fingerprint of the ungated path"
+    );
+    assert_eq!(
+        state.retry_after_ms, 0,
+        "gate must short-circuit before initiate_peer_connection; \
+         retry_after_ms still zero means no attempt fired"
+    );
+    assert_eq!(
+        node.peer_count(),
+        before_peers,
+        "no peer adoption while suppressed"
+    );
+    assert_eq!(
+        node.connection_count(),
+        before_connections,
+        "no connection initiated while suppressed"
+    );
+}
+
+#[tokio::test]
+async fn poll_nostr_discovery_established_gated_at_capacity() {
+    use crate::discovery::EstablishedTraversal;
+    use std::net::UdpSocket;
+
+    let mut node = make_node();
+    node.set_max_peers(2);
+    inject_dummy_peers(&mut node, 2);
+
+    let bootstrap = Arc::new(NostrDiscovery::new_for_test());
+    let socket = UdpSocket::bind("127.0.0.1:0").expect("bind local UDP socket");
+    let remote_addr = "127.0.0.1:9999".parse().expect("parse remote addr");
+    let peer_identity = Identity::generate();
+    bootstrap.push_event_for_test(BootstrapEvent::Established {
+        traversal: EstablishedTraversal::new(
+            "cap-test-session",
+            peer_identity.npub(),
+            remote_addr,
+            socket,
+        ),
+    });
+    node.nostr_discovery = Some(bootstrap.clone());
+
+    let before_peers = node.peer_count();
+    let before_links = node.link_count();
+    let before_connections = node.connection_count();
+
+    node.poll_nostr_discovery().await;
+
+    assert_eq!(
+        node.peer_count(),
+        before_peers,
+        "Established event must not add a peer while at capacity"
+    );
+    assert_eq!(
+        node.link_count(),
+        before_links,
+        "Established event must not allocate a link while at capacity"
+    );
+    assert_eq!(
+        node.connection_count(),
+        before_connections,
+        "Established event must not start a handshake while at capacity"
+    );
+}
+
+#[test]
+fn nostr_discovery_outbound_admission_atomic_roundtrip() {
+    // Verifies the runtime-side plumbing for the two NAT-traversal gate
+    // points: the setter mutates the atomic and the (super-visible)
+    // reader observes the value the Node-side wiring would publish.
+    let bootstrap = NostrDiscovery::new_for_test();
+    assert!(
+        bootstrap.outbound_admission_allowed(),
+        "default must allow (start unsaturated)"
+    );
+    bootstrap.set_outbound_admission(false);
+    assert!(
+        !bootstrap.outbound_admission_allowed(),
+        "after suppression store: traversal initiator/responder must see false"
+    );
+    bootstrap.set_outbound_admission(true);
+    assert!(
+        bootstrap.outbound_admission_allowed(),
+        "after recovery store: traversal initiator/responder must see true"
+    );
+}