diff --git a/src/nvim/msgpack_rpc/packer.c b/src/nvim/msgpack_rpc/packer.c
index 264e2157ef..6889fd885d 100644
--- a/src/nvim/msgpack_rpc/packer.c
+++ b/src/nvim/msgpack_rpc/packer.c
@@ -76,7 +76,7 @@ void mpack_float8(char **ptr, double i)
 void mpack_str(String str, PackerBuffer *packer)
 {
   const size_t len = str.size;
-  if (len < 20) {
+  if (len < 32) {
     mpack_w(&packer->ptr, 0xa0 | len);
   } else if (len < 0xff) {
     mpack_w(&packer->ptr, 0xd9);
diff --git a/test/functional/core/channels_spec.lua b/test/functional/core/channels_spec.lua
index c26f4b0fea..9e72975b29 100644
--- a/test/functional/core/channels_spec.lua
+++ b/test/functional/core/channels_spec.lua
@@ -196,6 +196,22 @@ describe('channels', function()
     end
   end
 
+  -- Helper to accumulate PTY stdout data until expected string is received.
+  -- PTY reads are non-atomic and may deliver data in chunks.
+  local function expect_stdout(id, expected)
+    local accumulated = ''
+    while #accumulated < #expected do
+      local msg = next_msg()
+      eq('notification', msg[1])
+      eq('stdout', msg[2])
+      eq(id, msg[3][1])
+      for _, chunk in ipairs(msg[3][2]) do
+        accumulated = accumulated .. chunk
+      end
+    end
+    eq(expected, accumulated)
+  end
+
   it('can use stdio channel with pty', function()
     skip(is_os('win'))
     source([[
@@ -229,7 +245,7 @@ describe('channels', function()
     expect_twoline(id, 'stdout', 'Blobs!\r', "[1, ['Blobs!', ''], 'stdin']")
 
     command("call chansend(id, 'neovan')")
-    eq({ 'notification', 'stdout', { id, { 'neovan' } } }, next_msg())
+    expect_stdout(id, 'neovan')
     command("call chansend(id, '\127\127im\n')")
     expect_twoline(id, 'stdout', '\b \b\b \bim\r', "[1, ['neovim', ''], 'stdin']")
 
diff --git a/test/functional/lua/mpack_spec.lua b/test/functional/lua/mpack_spec.lua
index ebede26936..039911aa62 100644
--- a/test/functional/lua/mpack_spec.lua
+++ b/test/functional/lua/mpack_spec.lua
@@ -27,4 +27,18 @@ describe('lua vim.mpack', function()
       end)
     )
   end)
+
+  it('encodes dict keys of length 20-31 as fixstr #32784', function()
+    -- MessagePack fixstr format: 0xa0 | length (for lengths 0-31)
+    -- Before #36737, strings 20-31 bytes were incorrectly encoded as str8 (0xd9, len)
+    for len = 20, 31 do
+      local expected_header = string.char(0xa0 + len) -- fixstr header
+      local result = exec_lua(function(keylen)
+        local key = string.rep('x', keylen)
+        return vim.mpack.encode({ [key] = 1 })
+      end, len)
+      -- Byte 1 is fixmap header (0x81), byte 2 should be fixstr header for the key
+      eq(expected_header, result:sub(2, 2), 'dict key length ' .. len .. ' should use fixstr')
+    end
+  end)
 end)