Hidden Error Awareness in Chain-of-Thought Reasoning: The Signal Is Diagnostic, Not Causal

Chain-of-thought (CoT) prompting assumes that generated reasoning reflects a model's internal computation. We show this assumption is wrong in a specific, measurable way: models internally detect their own reasoning errors but outwardly express confidence in them. A linear probe on hidden states predicts trace correctness with 0.95 AUROC -- from the very first reasoning step (0.79) -- while verbalized confidence for wrong traces is 4.55/5, nearly identical to correct ones (4.87/5). A text-surface classifier achieves only 0.59 on the same data, confirming a 0.20-point gap invisible in the generated text. This hidden error awareness holds across three model families (Qwen, Llama, Phi), 1.5B-72B parameters, and RL-trained reasoning models (DeepSeek-R1, 0.852 AUROC). The natural question is whether this signal can fix the errors it detects. It cannot. Four interventions -- activation steering, probe-guided best-of-N, self-correction, and activation patching -- all fail; patching destroys output coherence entirely. The signal is diagnostic, not causal: a readout of computation quality, not a lever to redirect it. This delineates a boundary for mechanistic interpretability: error representations during reasoning are fundamentally different from the factual knowledge representations that prior work has successfully edited.