When Token Supervision Fails: Segment-Level On-Policy Distillation for Long-Horizon Agents

Jialong Liu, Zuchao Li, Yuling Shi, Lefei Zhang, Baoyuan Qi, Hai Zhao


Abstract
On-policy distillation (OPD) for long-horizon language agents fails even when the teacher remains sequence-informative: in a failing Qwen3 configuration, the teacher still separates good from bad rollouts (sequence AUROC ≈ 0.75), yet the local token-gradient alignment 𝛼diag decays from 0.71 to 0.09 and standard OPD recovers only 1.3% of the teacher–student gap. We restrict our claims to two coupled mechanisms, jointly termed CHOP (Counterfactual Hierarchical On-Policy distillation): (i) a per-state reliability gate routing between per-token reverse Kullback–Leibler matching and per-segment sliced-Wasserstein matching, and (ii) a counterfactual total-variation gate activating privileged information (PI) only when the PI changes the teacher’s distribution. The scope is explicit: CHOP targets low-reliability, long-horizon traces where token-local support matching plateaus; in short-horizon or high-reliability regimes Top-K local-support matching (LSM) is already sufficient and CHOP’s segment branch is rarely activated. CHOP recovers 31.7% of the anisotropic-Qwen3 gap (vs. 1.3%/14.5%/24.7% for OPD/Top-K LSM/Li et al. 2026); on SWE-bench Verified under a fixed OpenHands harness, CHOP-deployable prevents the OPD-induced regression (6.5%\!→\!13.2%, matched to off-the-shelf 11.8%, not a significant gain over off-the-shelf) and oracle PI reveals further headroom (14.2%, 95% CI [11.4,17.3]); on AIME 2024 at a 60K-token stress cap (a diagnostic horizon, not a deployment target), CHOP holds 44.9 vs. 42.8 for Top-K LSM (p=0.032), while standard OPD collapses to 28.4. Compute-matched, leakage, and PI-removed-teacher controls attribute the gain to supervision-object routing rather than extra compute or PI contamination.
Anthology ID:
2026.aacl-long.167
Volume:
Proceedings of the 15th International Joint Conference on Natural Language Processing and the 5th Conference of the Asia-Pacific Chapter of the Association for Computational Linguistics (Volume 1: Long Papers)
Month:
November
Year:
2026
Address:
Hengqin, China
Editors:
Yue Zhang, Ruifeng Xu, Ayu Purwarianti, Tong Rong, Jun Suzuki
Venues:
AACL | IJCNLP
SIG:
Publisher:
Association for Computational Linguistics
Note:
Pages:
3688–3725
Language:
URL:
https://aclanthology.org/2026.aacl-long.167/
DOI:
Bibkey:
Cite (ACL):
Jialong Liu, Zuchao Li, Yuling Shi, Lefei Zhang, Baoyuan Qi, and Hai Zhao. 2026. When Token Supervision Fails: Segment-Level On-Policy Distillation for Long-Horizon Agents. In Proceedings of the 15th International Joint Conference on Natural Language Processing and the 5th Conference of the Asia-Pacific Chapter of the Association for Computational Linguistics (Volume 1: Long Papers), pages 3688–3725, Hengqin, China. Association for Computational Linguistics.
Cite (Informal):
When Token Supervision Fails: Segment-Level On-Policy Distillation for Long-Horizon Agents (Liu et al., AACL-IJCNLP 2026)
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PDF:
https://aclanthology.org/2026.aacl-long.167.pdf