MemTrace: Tracing and Attributing Errors in Large Language Model Memory Systems

Large language model (LLM) agents increasingly rely on external memory systems to remain consistent across long-horizon interactions, but little empirical work has been done to understand the specific failure modes and design choices that these systems present. Existing benchmarks report aggregate question-answering accuracy and treat memory systems as black boxes, making it impossible to attribute an incorrect answer to a particular failure mode of the system. We introduce MemFail, a diagnostic benchmark that isolates the failure modes of modern LLM memory systems. We begin by formalizing memory systems as the composition of three canonical operations -- summarization, storage, and retrieval -- and identify the potential failure modes induced by each. Based on these hypothesized failure modes, we construct five datasets spanning four tasks, each adversarially designed to test a specific operation of a memory system. Using these datasets, we evaluate four state-of-the-art memory systems on MemFail and demonstrate how MemFail can be used to empirically understand the tradeoffs induced by differences in memory system architectures.

Long-term memory enables large language models (LLMs) to preserve and reuse information across interactions, but it can also turn localized errors into persistent risks. Existing work mainly evaluates whether memory systems store and retrieve information correctly, leaving limited understanding of how errors propagate across responses, memory states, and future interactions. We propose a structural causal model (SCM)-based framework for cross-turn error propagation in memory-augmented LLMs. We model user questions, model responses, and memory states as a dynamic causal process, and identify two entry pathways: internal memory updating and external question feedback. By intervening on these pathways, we construct four counterfactual trajectories and quantify their downstream effects and interaction. Error influence is evaluated at four levels: memory retention, natural responses, targeted diagnostic probing, and probability-level error preference. Experiments show that error influence generally decays with interaction distance, while the memory-update pathway contributes more persistent effects than question feedback; latent errors may remain even after disappearing from natural responses. Propagation patterns also vary across memory categories and memory mechanisms. Pathway-guided restoration further validates this decomposition: Question Repair reduces residual error by 27.5%, Memory Repair by 70.2%, and Joint Repair by 98.3%, nearly eliminating residual propagation.

Latent memory, which stores past knowledge fragments as per-layer hidden states, has emerged as a promising paradigm (e.g., MemoryLLM and M+) for long-term memory in large language models (LLMs). However, the paradigm suffers from significant performance degradation during memory updates, due to positional encoding misalignment and the absence of any tracing mechanism to distinguish target memory fragments from irrelevant ones. To discover such a tracing mechanism, we probe the layer-wise attention density over stored memory fragments, and find that a small set of middle transformer layers consistently concentrates the highest density on the target fragment - exposing an inherent tracing signal. In light of this, we propose MemDefrag, a training-free and model-agnostic framework that (1) uses a middle-layer tracing signal to conduct memory defragmentation (rank, reorder, and filter memories), and (2) applies an informativeness-guided proportional forgetting mechanism once capacity is exceeded. Experiments show that MemDefrag substantially outperforms MemoryLLM and M+ on knowledge retention (e.g., 43.0% vs. 17.4%/17.6% after 50 memory updates) and long-context benchmarks, and generalizes well across various LLMs and latent-memory variants. The code is available at github.com/ryehr/MemDefrag.