We present MIPT-SSM, a neural sequence architecture built on the physics of Measurement-Induced Phase Transitions (MIPT). The central idea is a learned measurement rate $p_{t}\in(0,1)$ that routes computation between two regimes: wave phase $(p_{t}\rightarrow0)$, where information propagates as distributed complex-phase interference; and particle phase $(p_{t}\rightarrow1)$ where the state collapses onto the current token, enabling precise local storage. These two regimes are provably incompatible in a single linear operator one of the few "no-go theorems" in sequence modeling and $p_{t}$ is our way around it. The model is predicted to exhibit a phase transition at critical sequence length $N^{*}\approx1024$, where the information density ratio $N/D$ crosses unity, consistent with our memory scaling observations. On AG News (four-class classification), MIPT achieves 0.905 accuracy versus Transformer's 0.736 (+16.6%), stable across 3 seeds. At $N=8192$ MIPT requires 810 MB versus Transformer's 34,651 MB a 42.8x memory reduction. On exact-recall ("needle-in-a-haystack"), our causal sparse KV cache achieves 0.968 accuracy. Remarkably, under unbounded cache capacity, the $p_{t}$ gate autonomously learns to store only the single critical token (averaging $1.0/512$ slots used), filtering out all noise and achieving a 99.8% sparsity rate. On language modeling (WikiText-103, 31M parameters), MIPT-LM with $K=64$ cache reaches PPL 92.1 versus Transformer's 90.5 (gap: 1.8%) while inference KV cache shrinks from $O(N)$ to $O(64)$.