docs: update progress tracking for AI normalization implementation

Updated PROGRESS.md:
- Changed Last Updated to 2025-11-02
- Updated Overall Completion to 57% (was 55%)
- Stage 2 Feature Discussion now explicitly notes AI normalization
- Added AI normalization details to Multi-Provider AI System section
- Documented two-tier architecture (AI primary, fallback secondary)

Updated DESIGN.md:
- Changed Updated date to 2025-11-02
- Added "Multi-Provider Fallback" to implemented features
- Added "AI Normalization" to implemented features
- Reflects current system capabilities

Both documents now accurately track the completed AI normalization work
that enables natural conversation in discussions without strict formatting.

🤖 Generated with [Claude Code](https://claude.com/claude-code)

Co-Authored-By: Claude <noreply@anthropic.com>

docs/DESIGN.md

@@ -2,17 +2,19 @@
 ## Process & Architecture Design Document (v2.1)
 - Feature ID: FR_2025-10-21_initial-feature-request
 - Status: Design Approved (Ready for Implementation)
-- Date: 2025-10-21 (Updated: 2025-11-01)
+- Date: 2025-10-21 (Updated: 2025-11-02)
 - Owners: Rob (maintainer), AI_Moderator (process steward)
 - Contributors: AI_Claude, AI_Deepseek, AI_Junie, AI_Chat-GPT, AI_GitHubCopilot
 
-## Implementation Status (2025-11-01)
+## Implementation Status (2025-11-02)
 
 ### ✅ Currently Implemented (Milestone M0-M1)
 - **Stage 1: Request** - Feature request creation and automation
 - **Stage 2: Feature Discussion** - Discussion file generation, voting, summaries
 - **Cascading Rules System** - .ai-rules.yml loading and merging
 - **AI Patch Generation** - Claude API integration, diff application
+- **Multi-Provider Fallback** - Claude → Codex → Gemini chain with model hints
+- **AI Normalization** - Natural conversation → structured data extraction
 - **Vote Tracking** - VOTE: line parsing, summary updates
 - **Pre-commit Hook** - Automation orchestration, file staging
 - **Setup Script** - Project initialization with Ramble GUI

docs/PROGRESS.md

@@ -1,7 +1,7 @@
 # CascadingDev Implementation Progress
 
-**Last Updated:** 2025-11-01
-**Overall Completion:** ~55% (M0✅ M1✅ M2🚧 M3❌ M4✅)
+**Last Updated:** 2025-11-02
+**Overall Completion:** ~57% (M0✅ M1✅ M2🚧 M3❌ M4✅)
 
 ---
 
@@ -92,6 +92,11 @@
 - [x] Cost optimization via intelligent routing
 - [x] Environment variable overrides
 - [x] Claude subagent setup script (`tools/setup_claude_agents.sh`)
+- [x] **AI normalization system** (agents.normalize_discussion())
+  - [x] Natural conversation → structured JSON extraction
+  - [x] Fast model usage for cost-effective extraction
+  - [x] Simple fallback for explicit markers when AI unavailable
+  - [x] Two-tier architecture (AI primary, regex fallback)
 
 ### Testing Infrastructure
 - [x] `tests/test_workflow.py` - Workflow automation tests (7 tests)
@@ -121,14 +126,16 @@
 - [x] Rules: `feature_discussion_update`, `feature_discussion_writer`
 - [x] Automation:
   - [x] Vote tracking (VOTE: READY/CHANGES/REJECT)
-  - [x] Question extraction (Q:, ?)
-  - [x] Action item tracking (TODO:, DONE:)
-  - [x] Decision tracking (DECISION:)
+  - [x] **AI normalization** for natural conversation (agents.normalize_discussion())
+  - [x] Question extraction from natural language
+  - [x] Action item tracking from conversational text
+  - [x] Decision tracking with context understanding
   - [x] @mention tracking
   - [x] Timeline generation
   - [x] Summary file updates
+  - [x] Simple fallback for explicit line-start markers (DECISION:, QUESTION:, ACTION:)
 - [x] Gate creation: `design.discussion.md` when status = READY_FOR_DESIGN
-- [x] Tested: 7 passing tests in test_workflow.py
+- [x] Tested: 7 passing tests in test_workflow.py + production validation
 
 ### Stage 3: Design Discussion (90% 🚧)
 - [x] Template: `assets/templates/design.discussion.md`