docs: add remaining work tracking for Issue #487

Document the work completed and remaining tasks for full issue resolution:

Completed (quick wins):
- Fixed three correctness footguns
- Added regression tests

Remaining work:
- Establish coverage baseline and restore to ~100%
- Reduce mock usage in favor of integration tests
- Address architecture/quality follow-ups
- Document testing patterns

This provides a roadmap for continuing the coverage and testing improvements.

Related to #487

Co-authored-by: Paul Hernandez <phernandez@users.noreply.github.com>
Signed-off-by: claude[bot] <41898282+claude[bot]@users.noreply.github.com>

docs/issue-487-remaining-work.md

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+# Issue #487 Remaining Work
+
+This document outlines the remaining work for Issue #487 after the quick wins have been addressed.
+
+## ✅ Completed (Quick Wins)
+
+1. **Fixed mutable default args** in `search_notes()` MCP tool
+2. **Fixed Pydantic defaults** in `WatchServiceState` classes
+3. **Fixed list mutation during iteration** in `WatchService.handle_changes()`
+4. **Added regression tests** for all three bugs
+
+## 🔄 Remaining Work
+
+### 1. Coverage Baseline and Restoration
+
+**Goal**: Restore test coverage to ~100% (practical: minimal, justified excludes)
+
+**Tasks**:
+- [ ] Run `just coverage` to establish current baseline
+- [ ] Identify files/functions with missing coverage
+- [ ] Add tests for uncovered code paths
+- [ ] Document any justified coverage excludes (e.g., CLI entry points, debug code)
+
+**Priority**: High - This is the main goal of the issue
+
+### 2. Reduce Mock Usage
+
+**Goal**: Replace mocks with integration tests where practical
+
+**Tasks**:
+- [ ] **High-value targets** (most mocked files):
+  - `tests/test_rclone_commands.py` (56 mocks) - Consider using real rclone or temp dirs
+  - `tests/sync/test_sync_service.py` (11 mocks) - Many can use real filesystem
+  - `tests/services/test_search_service.py` (8 mocks) - Already mostly integration-style
+
+- [ ] **Cloud/external service mocks**:
+  - `tests/cli/test_cloud_authentication.py` - Consider mock OAuth server or test fixtures
+  - `tests/cli/test_upload.py` - Consider using MinIO (local S3-compatible storage)
+  - `tests/test_telemetry.py` - Mock external telemetry endpoint is acceptable
+
+- [ ] **Move appropriate tests to `test-int/`**:
+  - Tests that use real DB + real filesystem + real in-process API client belong in `test-int/`
+  - Keep unit tests in `tests/` for isolated component testing
+
+**Priority**: Medium - Important for test reliability but not critical
+
+### 3. Architecture/Quality Follow-ups
+
+**Tasks**:
+- [ ] **Cloud-mode DB initialization**: Ensure cloud mode runs required DB init/migrations reliably
+  - Even if project reconciliation is skipped
+  - Add integration test for cloud mode startup
+
+- [ ] **Telemetry credential optics**: Review client secret in repo
+  - Currently marked as "write-only" but still in version control
+  - Consider environment variable or config file approach
+  - Document security model if keeping in repo
+
+**Priority**: Medium - Quality improvements, not bugs
+
+### 4. Documentation
+
+**Tasks**:
+- [ ] Document coverage expectations in CLAUDE.md or CONTRIBUTING.md
+- [ ] Document when to use mocks vs integration tests
+- [ ] Add examples of good integration tests to test guidelines
+
+**Priority**: Low - Nice to have
+
+## Testing Strategy
+
+### Unit Tests (`tests/`)
+- **Use when**: Testing isolated components with clear boundaries
+- **Mock**: External services, network calls, filesystem (when appropriate)
+- **Examples**: Schema validation, utility functions, parsers
+
+### Integration Tests (`test-int/`)
+- **Use when**: Testing user flows, API endpoints, sync operations
+- **Real components**: Database (SQLite/Postgres), filesystem (tmp_path), in-process API client
+- **Examples**: MCP tool workflows, sync operations, search functionality
+
+### Coverage Goals
+- **Target**: ~100% practical coverage
+- **Acceptable excludes**: CLI entry points, debug code, unreachable error paths
+- **Document**: All coverage excludes with justification
+
+## Next Steps
+
+1. **Run coverage baseline**: `just coverage` (requires approval)
+2. **Triage uncovered code**: Identify what needs tests vs what can be excluded
+3. **Prioritize high-value tests**: Focus on user-facing functionality first
+4. **Reduce strategic mocks**: Start with `test_rclone_commands.py`
+5. **Document patterns**: Add testing guidelines to help future contributions
+
+## References
+
+- Issue: #487
+- Quick wins commits: [cdc28ee](https://github.com/basicmachines-co/basic-memory/commit/cdc28ee), [bb364dc](https://github.com/basicmachines-co/basic-memory/commit/bb364dc)
+- Test structure: `tests/` (unit), `test-int/` (integration)
+- Coverage tool: `just coverage` → `coverage/index.html`