Disappearing Ink: Obfuscation Breaks N-gram Code Watermarks in Theory and Practice

Large language models (LLMs) are increasingly used for code generation, making reliable identification of machine-generated code important for attribution, tracking, and misuse detection. Existing code watermarking methods are dominated by N-gram-based schemes, yet their robustness has mostly been evaluated only against simple edits or optimizations. We argue that this significantly overstates security, because software engineering already provides stronger semantics-preserving transformations in the form of code obfuscation. We study N-gram-based code watermarking under obfuscation. We formally model semantics-preserving transformations as a Markov random walk and prove that, under an intuitive and experimentally supported assumption called distribution consistency, obfuscation can nullify the robustness of N-gram-based watermarks. If the original detector has a false positive rate fpr, then after obfuscation, its failure rate on watermarked code approaches 1 - fpr. We validate this theory on three state-of-the-art watermarking schemes, two LLMs, two programming languages, four benchmarks, and four obfuscators. Across all settings, detectors collapse to near-random performance on obfuscated code (AUROC tightly around 0.5), and for each language, at least one attack leaves all post-obfuscation AUROC scores below 0.6. These results jointly show that current N-gram-based code watermarks are not robust to realistic obfuscation attacks and motivate more semantics-aware alternatives.