Early Diagnosis of Wasted Computation in Multi-Agent LLM Systems via Failure-Aware Observability

Tool-using multi-agent large language model (LLM) systems spend computation through model tokens, tool calls, retries, and code execution before producing an answer. When a run fails, final-answer evaluation reveals the endpoint but usually not the point at which the trajectory stopped making recoverable progress. This paper introduces a failure-aware observability framework for diagnosing wasted computation in multi-agent LLM traces. The framework maps recurring failure modes to online trace signals, including tool reliability, execution recovery, orchestration loops, evidence availability, information change, and budget pressure. We instantiate the framework in a three- agent question-answering system and evaluate it on 165 GAIA validation traces under identical execution caps. Operational failures remain common: 22/53 level-1 runs, 33/86 level-2 runs, and 12/26 level-3 runs fail to produce a usable final answer. The traces expose different mechanisms behind these outcomes, including insufficient evidence, repeated-action loops, max-step termination, tool-failure streaks, and execution calls that succeed without useful output. Mean token use rises from 8,152 tokens at level 1 to 16,389 tokens at level 3, while evidence availability and sentence-level support diverge. A cached 10-trace LLM-judge grounding audit shows that cheap online signals and deeper semantic metrics capture complementary layers of failure. The results position failure-aware observability as a diagnostic layer between raw execution logs and final-answer accuracy.