When RLHF Fails: A Mechanistic Taxonomy of Reward Hacking, Collapse, and Evaluator Gaming

arXiv:2606.03238v2 Announce Type: replace-cross Abstract: RLHF evaluation should track how failures emerge, where they localize, and which warning signals appear before external quality degrades. We study this problem with a compact RLHF pipeline built for this paper, including PPO, DPO, uncertainty-penalized PPO (UP-PPO), reward-model uncertainty, approximate policy drift, diversity and repetition diagnostics, and two external LLM judges. Rather than treating reward hacking as a single terminal event, we classify matched checkpoint and prompt-level transitions by the directions of learned reward R_phi, judge scores R_dag and R2_dag, and their average R_dag. The main empirical findings are that aggressive PPO produces the clearest localized reward-hacking signal, UP-PPO reduces but does not eliminate that signal, row-level diagnostics reveal failures hidden by checkpoint averages, and pre-transition features partially anticipate future localized reward hacking. The central conclusion is methodological: RLHF failures are training dynamics that can be classified, localized, and partially anticipated, not only final-model pathologies. The repository is available at github.com/zabahana/rlhf-failure-modes-diagnostics. The pipeline is also deployed as a live interactive web demo for model comparison and diagnostic views at rlhf-failures.zelalem.ai.