diff --git a/packages/backend/src/altNodes/jsonNodeConversion.test.ts b/packages/backend/src/altNodes/jsonNodeConversion.test.ts
new file mode 100644
index 00000000..1b8b489f
--- /dev/null
+++ b/packages/backend/src/altNodes/jsonNodeConversion.test.ts
@@ -0,0 +1,20 @@
+import { describe, expect, it } from "vitest";
+import { hugSizingIsMeaningless } from "./jsonNodeConversion";
+
+describe("hugSizingIsMeaningless", () => {
+  it("is false for a TEXT node with no children — it hugs its own characters", () => {
+    expect(hugSizingIsMeaningless({ type: "TEXT" })).toBe(false);
+    expect(hugSizingIsMeaningless({ type: "TEXT", children: [] })).toBe(false);
+  });
+
+  it("is true for an empty non-text frame — nothing to hug around", () => {
+    expect(hugSizingIsMeaningless({ type: "FRAME" })).toBe(true);
+    expect(hugSizingIsMeaningless({ type: "FRAME", children: [] })).toBe(true);
+  });
+
+  it("is false for a non-text frame with children — hugs its child content", () => {
+    expect(
+      hugSizingIsMeaningless({ type: "FRAME", children: [{}] })
+    ).toBe(false);
+  });
+});
diff --git a/packages/backend/src/altNodes/jsonNodeConversion.ts b/packages/backend/src/altNodes/jsonNodeConversion.ts
index d9b23f32..c96bdd6d 100644
--- a/packages/backend/src/altNodes/jsonNodeConversion.ts
+++ b/packages/backend/src/altNodes/jsonNodeConversion.ts
@@ -255,6 +255,24 @@ function adjustChildrenOrder(node: any) {
   node.children = [...absoluteChildren, ...fixedChildren];
 }
 
+/**
+ * True when a node's HUG sizing has nothing to hug — an empty frame, where
+ * HUG-with-no-content is meaningless and falling back to FIXED is correct.
+ *
+ * A TEXT node never has a `children` array (its content is `characters`, a
+ * string, not child elements), so a plain "does it have children" check
+ * reads every TEXT node as having nothing to hug and forces it to FIXED —
+ * wrong, since text hugs its own characters. TEXT is therefore never
+ * "meaningless" here regardless of `children`.
+ */
+export function hugSizingIsMeaningless(node: {
+  type: string;
+  children?: unknown[];
+}): boolean {
+  if (node.type === "TEXT") return false;
+  return !Array.isArray(node.children) || node.children.length === 0;
+}
+
 /**
  * Recursively process both JSON node and Figma node to update with data not available in JSON
  * This now includes the functionality from convertNodeToAltNode
@@ -537,17 +555,16 @@ const processNodePair = async (
     jsonNode.counterAxisAlignItems = "MIN";
   }
 
-  // If layout sizing is HUG but there are no children, set it to FIXED
-  const hasChildren =
-    "children" in jsonNode &&
-    jsonNode.children &&
-    Array.isArray(jsonNode.children) &&
-    jsonNode.children.length > 0;
-
-  if (jsonNode.layoutSizingHorizontal === "HUG" && !hasChildren) {
+  if (
+    jsonNode.layoutSizingHorizontal === "HUG" &&
+    hugSizingIsMeaningless(jsonNode)
+  ) {
     jsonNode.layoutSizingHorizontal = "FIXED";
   }
-  if (jsonNode.layoutSizingVertical === "HUG" && !hasChildren) {
+  if (
+    jsonNode.layoutSizingVertical === "HUG" &&
+    hugSizingIsMeaningless(jsonNode)
+  ) {
     jsonNode.layoutSizingVertical = "FIXED";
   }