The mechanism of capacity fade of the Li2MnO3·LiMO2 (M = Li, Ni, Co, Mn) composite positive electrode within a full cell was investigated using a combination of operando neutron powder diffraction and transmission X-ray microscopy methods, enabling the phase, crystallographic, and morphological evolution of the material during electrochemical cycling to be understood. The electrode was shown to initially consist of 73(1) wt % R3m LiMO2 with the remaining 27(1) wt % C2/m Li2MnO3 likely existing as an intergrowth. Cracking in the Li2MnO3·LiMO2 electrode particle under operando microscopy observation was revealed to be initiated by the solid-solution reaction of the LiMO2 phase on charge to 4.55 V vs Li+/Li and intensified during further charge to 4.7 V vs Li+/Li during the concurrent two-phase reaction of the LiMO2 phase, involving the largest lattice change of any phase, and oxygen evolution from the Li2MnO3 phase. Notably, significant healing of the generated cracks in the Li2MnO3·LiMO2 electrode particle occurred during subsequent lithiation on discharge, with this rehealing being principally associated with the solid-solution reaction of the LiMO2 phase. This work reveals that while it is the reduction of lattice size of electrode phases during charge that results in cracking of the Li2MnO3·LiMO2 electrode particle, with the extent of cracking correlated to the magnitude of the size change, crack healing is possible in the reverse solid-solution reaction occurring during discharge. Importantly, it is the phase separation during the two-phase reaction of the LiMO2 phase that prevents the complete healing of the electrode particle, leading to pulverization over extended cycling. This work points to the minimization of behavior leading to phase separation, such as two-phase and oxygen evolution, as a key strategy in preventing capacity fade of the electrode.