Masked Diffusion Language Models are Strong and Steerable Text-Based World Models for Agentic RL [R]

Autoregressive LLM world models factorize next-state generation left-to-right, preventing them from conditioning on globally interdependent anchors (tool schemas, trailing status fields, expected outcomes) and yielding prefix-consistent but globally incoherent rollouts. MDLMs' any-order denoising objective sidesteps this by learning every conditional direction from the same training signal. Empirically, fine-tuned MDLMs (SDAR-8B, WeDLM-8B) surpass AR baselines up to 4x their total parameter count on BLEU-1, ROUGE-L, and MAUVE across in- and out-of-domain splits, with lower Self-BLEU and higher Distinct-N confirming reduced prefix mode collapse. GRPO training on MDLM-generated rollouts shows up to +15% absolute task-success gains over AR generated training on held-out ScienceWorld, ALFWorld, and AppWorld across 1.2B–7B backbones (LFM2.5, Qwen3, Mistral) in a zero-shot transfer setting.