Oversmoothing as Representation Degeneracy in Neural Sheaf Diffusion

Neural Sheaf Diffusion (NSD) generalizes diffusion-based Graph Neural Networks by replacing scalar graph Laplacians with sheaf Laplacians whose learned restriction maps define a task-adapted geometry. While the diffusion limit of NSD is known to be the space of global sections, the representation-theoretic structure of this harmonic space remains largely implicit. In this paper, we develop a quiver-theoretic interpretation of NSD by identifying cellular sheaves on graphs with representations of the associated incidence quiver. Under this correspondence, learned sheaf geometries become points in a finite-dimensional representation space. We prove that direct-sum decompositions of the underlying incidence-quiver representation induce corresponding decompositions of the harmonic space reached in the diffusion limit. This provides an algebraic interpretation of oversmoothing as representation degeneration: a conceptual framing where learned sheaves collapse toward trivial or low-complexity summands whose global sections fail to preserve discriminative information. Building on this viewpoint, we connect sheaf diffusion to stability, moduli, and moment-map principles from Geometric Invariant Theory. We introduce moment-map-inspired regularizers that bias learned restriction maps toward more balanced representation geometries, and we identify a structural obstruction in standard equal-stalk architectures: when $d_v=d_e$, the admissibility condition for learnable stability parameters forces the trivial all-object summand onto a stability wall. We show that non-uniform stalk dimensions remove this obstruction, making adaptive stability meaningful in principle. Empirical evaluations on heterophilic benchmarks are consistent with this mechanism: breaking stalk symmetry can reduce variance or improve validation behavior on some datasets, and adaptive stability regularization becomes more effective in selected rectangular settings. These results support the view that moment-map regularization is a structured but dataset-dependent geometric bias rather than a universal performance booster. Overall, our framework interprets oversmoothing not only as a spectral pathology, but as a degeneration phenomenon in the underlying representation geometry.