diff --git a/docs/superpowers/specs/2026-06-10-source-location-fixes-design.md b/docs/superpowers/specs/2026-06-10-source-location-fixes-design.md
new file mode 100644
index 0000000..a2ecb0c
--- /dev/null
+++ b/docs/superpowers/specs/2026-06-10-source-location-fixes-design.md
@@ -0,0 +1,57 @@
+# Source Location Error Fixes — Design Document
+
+> **Date:** 2026-06-10
+> **Status:** Approved
+> **Scope:** Parser severity filtering + source maps for merged builds
+
+---
+
+## 1. Parser Diagnostics with Severity
+
+### Problem
+Parser is fault-tolerant and generates diagnostics for recoverable errors (e.g., `expected '}'`, `skipping unknown declaration`). The stdlib triggers many of these, but compilation succeeds because the parser recovers.
+
+### Solution
+Add `severity` to `ParserDiag`:
+```bux
+struct ParserDiag {
+    line: uint32;
+    column: uint32;
+    message: String;
+    severity: int;  /* 0=error (fatal), 1=warning (recoverable) */
+}
+```
+
+- `parserExpect()`, `parserEmitDiag()` set severity to `1` (warning/recoverable)
+- Only when the parser is completely stuck → severity `0` (fatal)
+- In `Parser_Parse`, print ONLY diags with `severity == 0`, OR if `mod.itemCount == 0`
+
+---
+
+## 2. Source Maps for `bux build`
+
+### Problem
+`Cli_BuildProject` creates a merged module in memory. Sema errors show `<merged>` as the path because no physical file exists.
+
+### Solution
+Before `Sema_Analyze(merged)`, generate the merged source text from all declarations and write it to `build/merged.bux`. Pass this path to `Diagnostic_Print`.
+
+**Result:**
+```
+error: undeclared identifier 'undefined_variable'
+  --> build/merged.bux:507:18
+   |
+507 |     let x: int = undefined_variable;
+   |                  ^
+```
+
+The user can open `build/merged.bux` to see the full context.
+
+---
+
+## Files to Modify
+
+| File | Change |
+|------|--------|
+| `src/parser.bux` | Add `severity` to `ParserDiag`. Set severity in `parserExpect`/`parserEmitDiag`. Print only fatal errors in `Parser_Parse`. |
+| `src/cli.bux` | Generate merged source text before `Sema_Analyze`. Write to `build/merged.bux`. Pass path to `Diagnostic_Print`. |