fix(canvas): correct z-index layering for selected blocks and connected edges

apps/sim/app/workspace/[workspaceId]/w/[workflowId]/workflow.tsx

@@ -201,8 +201,6 @@ const edgeTypes: EdgeTypes = {
 const defaultEdgeOptions = { type: 'custom' }
 
 const reactFlowStyles = [
-  '[&_.react-flow__edges]:!z-0',
-  '[&_.react-flow__node]:z-[21]',
   '[&_.react-flow__handle]:!z-[30]',
   '[&_.react-flow__edge-labels]:!z-[1001]',
   '[&_.react-flow__pane]:select-none',
@@ -2478,6 +2476,7 @@ const WorkflowContent = React.memo(
 
     // Local state for nodes - allows smooth drag without store updates on every frame
     const [displayNodes, setDisplayNodes] = useState<Node[]>([])
+    const [lastInteractedNodeId, setLastInteractedNodeId] = useState<string | null>(null)
 
     const selectedNodeIds = useMemo(
       () => displayNodes.filter((node) => node.selected).map((node) => node.id),
@@ -2489,6 +2488,14 @@ const WorkflowContent = React.memo(
       syncPanelWithSelection(selectedNodeIds)
     }, [selectedNodeIdsKey])
 
+    // Keep the most recently selected block on top even after deselection, so a
+    // dragged block doesn't suddenly drop behind other overlapping blocks.
+    useEffect(() => {
+      if (selectedNodeIds.length > 0) {
+        setLastInteractedNodeId(selectedNodeIds[selectedNodeIds.length - 1])
+      }
+    }, [selectedNodeIdsKey])
+
     useEffect(() => {
       // Check for pending selection (from paste/duplicate), otherwise preserve existing selection
       if (pendingSelection && pendingSelection.length > 0) {
@@ -3723,18 +3730,54 @@ const WorkflowContent = React.memo(
       [removeEdge, edges, blocks, addNotification, activeWorkflowId]
     )
 
+    // Elevate nodes using React Flow's native zIndex so selected/recent blocks
+    // always sit above edges and other blocks.
+    //
+    // Z-index layers (regular blocks):
+    //   21 — default
+    //   22 — last interacted (dragged/selected, now deselected) so it stays on
+    //        top of siblings until another block is touched
+    //   31 — currently selected (above connected edges at z-22 and handles at z-30)
+    //
+    // Subflow container nodes are skipped — they use depth-based zIndex for
+    // correct parent/child layering and must not be bumped.
+    // Child blocks inside containers already carry zIndex 1000 and are bumped by
+    // +10 when selected so they stay above their sibling child blocks.
+    const nodesForRender = useMemo(() => {
+      return displayNodes.map((node) => {
+        if (node.type === 'subflowNode') return node
+        const base = node.zIndex ?? 21
+        const target = node.selected
+          ? base + 10
+          : node.id === lastInteractedNodeId
+            ? Math.max(base, 22)
+            : base
+        if (target === node.zIndex) return node
+        return { ...node, zIndex: target }
+      })
+    }, [displayNodes, lastInteractedNodeId])
+
     /** Transforms edges to include selection state and delete handlers. Memoized to prevent re-renders. */
     const edgesWithSelection = useMemo(() => {
       const nodeMap = new Map(displayNodes.map((n) => [n.id, n]))
+      const elevatedNodeIdSet = new Set(
+        lastInteractedNodeId ? [...selectedNodeIds, lastInteractedNodeId] : selectedNodeIds
+      )
 
       return edgesForDisplay.map((edge) => {
         const sourceNode = nodeMap.get(edge.source)
         const targetNode = nodeMap.get(edge.target)
         const parentLoopId = sourceNode?.parentId || targetNode?.parentId
         const edgeContextId = `${edge.id}${parentLoopId ? `-${parentLoopId}` : ''}`
+        const connectedToElevated =
+          elevatedNodeIdSet.has(edge.source) || elevatedNodeIdSet.has(edge.target)
+        // Derive elevated z-index from connected nodes so edges inside subflows
+        // (child nodes at z-1000) stay above their sibling child blocks.
+        const elevatedZIndex = Math.max(22, sourceNode?.zIndex ?? 21, targetNode?.zIndex ?? 21)
 
         return {
           ...edge,
+          zIndex: connectedToElevated ? elevatedZIndex : 0,
           data: {
             ...edge.data,
             isSelected: selectedEdges.has(edgeContextId),
@@ -3745,7 +3788,14 @@ const WorkflowContent = React.memo(
           },
         }
       })
-    }, [edgesForDisplay, displayNodes, selectedEdges, handleEdgeDelete])
+    }, [
+      edgesForDisplay,
+      displayNodes,
+      selectedNodeIds,
+      selectedEdges,
+      handleEdgeDelete,
+      lastInteractedNodeId,
+    ])
 
     /** Handles Delete/Backspace to remove selected edges or blocks. */
     useEffect(() => {
@@ -3885,7 +3935,7 @@ const WorkflowContent = React.memo(
                 {showTrainingModal && <TrainingModal />}
 
                 <ReactFlow
-                  nodes={displayNodes}
+                  nodes={nodesForRender}
                   edges={edgesWithSelection}
                   onNodesChange={onNodesChange}
                   onEdgesChange={onEdgesChange}
@@ -3952,7 +4002,7 @@ const WorkflowContent = React.memo(
                   onNodeDragStart={effectivePermissions.canEdit ? onNodeDragStart : undefined}
                   snapToGrid={snapToGrid}
                   snapGrid={snapGrid}
-                  elevateEdgesOnSelect={true}
+                  elevateEdgesOnSelect={false}
                   onlyRenderVisibleElements={false}
                   deleteKeyCode={null}
                   elevateNodesOnSelect={false}