This study investigates phase segregation and nanoconfined fluid O₂ in a lithium-rich oxide cathode, Li₁.₂₋ₓMn₀.₈O₂, using a combination of ab initio molecular dynamics (AIMD) and cluster expansion-based Monte Carlo simulations. The research reveals that during the first charge, O₂ molecules form in the bulk through a kinetically accessible pathway involving Mn migration and interlayer oxygen dimerization. At the top of charge, the bulk structure phase segregates into MnO₂-rich regions and Mn-deficient nanovoids, which contain O₂ molecules as a nanoconfined fluid. These nanovoids form a percolating network, potentially enabling long-range oxygen transport and linking bulk O₂ formation to surface O₂ loss. The study highlights the importance of developing strategies to kinetically stabilize the bulk structure of Li-rich O-redox cathodes to maintain their high energy densities. The research also shows that O₂ molecules in the bulk exhibit a nanoconfined supercritical fluid character and can potentially diffuse through the network of voids, providing a mechanistic link between bulk O₂ formation and surface O₂ loss. The study demonstrates that O₂ formation is driven by thermodynamic factors, with the metastable structure Mn₀.₈O₂ being thermodynamically susceptible to decomposition into MnO₂ and O₂. The results indicate that O₂ loss and bulk O₂ formation are different outcomes of the same thermodynamically driven process, where O²⁻ ions are oxidized to molecular O₂. The study also shows that O₂ formed in the bulk is unstable with respect to gas-phase O₂ and may subsequently escape through the surface of the cathode, contributing to net O₂ loss. The findings suggest that the structural degradation in Li-rich cathodes is driven by O redox, with confined O₂ in the bulk being a signature of bulk O₂ formation. The study provides insights into the atomic-to-nanoscale mechanisms of O-redox in Li-rich Mn-based cathodes and highlights directions for improving the performance of other high-energy density cathodes that display structural rearrangements during cycling. The results also indicate that the mobility of O₂ molecules in the bulk is higher than previously thought, with a calculated local diffusion coefficient of 1 × 10⁻⁷ cm² s⁻¹ in Li₀.₂Mn₀.₈O₂. This suggests that O₂ can diffuse through the bulk via a network of voids formed by the O-redox mechanism, potentially enabling long-range oxygen transport. The study concludes that the combination of AIMD and cluster expansion-based Monte Carlo simulations allows for a detailed atomic-scale exploration of a lithium-rich O-redox cathode, providing a mechanistic link between O₂ formation in the bulk and O₂ loss through the surface.This study investigates phase segregation and nanoconfined fluid O₂ in a lithium-rich oxide cathode, Li₁.₂₋ₓMn₀.₈O₂, using a combination of ab initio molecular dynamics (AIMD) and cluster expansion-based Monte Carlo simulations. The research reveals that during the first charge, O₂ molecules form in the bulk through a kinetically accessible pathway involving Mn migration and interlayer oxygen dimerization. At the top of charge, the bulk structure phase segregates into MnO₂-rich regions and Mn-deficient nanovoids, which contain O₂ molecules as a nanoconfined fluid. These nanovoids form a percolating network, potentially enabling long-range oxygen transport and linking bulk O₂ formation to surface O₂ loss. The study highlights the importance of developing strategies to kinetically stabilize the bulk structure of Li-rich O-redox cathodes to maintain their high energy densities. The research also shows that O₂ molecules in the bulk exhibit a nanoconfined supercritical fluid character and can potentially diffuse through the network of voids, providing a mechanistic link between bulk O₂ formation and surface O₂ loss. The study demonstrates that O₂ formation is driven by thermodynamic factors, with the metastable structure Mn₀.₈O₂ being thermodynamically susceptible to decomposition into MnO₂ and O₂. The results indicate that O₂ loss and bulk O₂ formation are different outcomes of the same thermodynamically driven process, where O²⁻ ions are oxidized to molecular O₂. The study also shows that O₂ formed in the bulk is unstable with respect to gas-phase O₂ and may subsequently escape through the surface of the cathode, contributing to net O₂ loss. The findings suggest that the structural degradation in Li-rich cathodes is driven by O redox, with confined O₂ in the bulk being a signature of bulk O₂ formation. The study provides insights into the atomic-to-nanoscale mechanisms of O-redox in Li-rich Mn-based cathodes and highlights directions for improving the performance of other high-energy density cathodes that display structural rearrangements during cycling. The results also indicate that the mobility of O₂ molecules in the bulk is higher than previously thought, with a calculated local diffusion coefficient of 1 × 10⁻⁷ cm² s⁻¹ in Li₀.₂Mn₀.₈O₂. This suggests that O₂ can diffuse through the bulk via a network of voids formed by the O-redox mechanism, potentially enabling long-range oxygen transport. The study concludes that the combination of AIMD and cluster expansion-based Monte Carlo simulations allows for a detailed atomic-scale exploration of a lithium-rich O-redox cathode, providing a mechanistic link between O₂ formation in the bulk and O₂ loss through the surface.