diff --git a/Actions/.Modules/ReadSettings.psm1 b/Actions/.Modules/ReadSettings.psm1
index ea3bbe350..354f9af9b 100644
--- a/Actions/.Modules/ReadSettings.psm1
+++ b/Actions/.Modules/ReadSettings.psm1
@@ -16,7 +16,11 @@ $CustomTemplateProjectSettingsFile = Join-Path '.github' $CustomTemplateProjectS
 function MergeCustomObjectIntoOrderedDictionary {
     Param(
         [System.Collections.Specialized.OrderedDictionary] $dst,
-        [PSCustomObject] $src
+        [PSCustomObject] $src,
+        # Settings already explicitly overwritten by a prior user source. Template sources must not re-apply these.
+        [string[]] $overwrittenSettings = @(),
+        # True when the source file is a template-managed file (*.doNotEdit.json). Used together with $overwrittenSettings.
+        [bool] $isTemplateSource = $false
     )
 
     # If the src object contains property 'overwriteSettings' (list of settings), remove these settings from the dst object, so that they can be re-added with the new value later on
@@ -42,6 +46,11 @@ function MergeCustomObjectIntoOrderedDictionary {
             return
         }
 
+        # Template sources must not re-introduce a property that was explicitly overwritten by a user source
+        if ($isTemplateSource -and $overwrittenSettings -contains $prop) {
+            return
+        }
+
         $srcProp = $src."$prop"
         $srcPropType = $srcProp.GetType().Name
         if (-not $dst.Contains($prop)) {
@@ -67,6 +76,11 @@ function MergeCustomObjectIntoOrderedDictionary {
     @($dst.Keys) | ForEach-Object {
         $prop = $_
         if ($src.PSObject.Properties.Name -eq $prop) {
+            # Template sources must not overwrite a setting that was explicitly overwritten by a user source
+            if ($isTemplateSource -and $overwrittenSettings -contains $prop) {
+                OutputDebug "Skipping template merge of explicitly overwritten setting $prop"
+                return
+            }
             $dstProp = $dst."$prop"
             $srcProp = $src."$prop"
             $dstPropType = $dstProp.GetType().Name
@@ -479,11 +493,30 @@ function ReadSettings {
         }
     }
 
+    # Tracks settings names that were explicitly overwritten by a user-controlled source.
+    # Template sources (*.doNotEdit.json) that appear later in the merge order must not re-apply these.
+    $overwrittenSettings = @()
+
     foreach($settingsObject in $settingsObjects) {
         $settingsJson = $settingsObject.Settings
         if ($settingsJson) {
+            $isTemplateSource = $settingsObject.Source -like "*.doNotEdit.json"
             OutputDebug "Applying settings from $($settingsObject.Source) ($($settingsObject.Type))"
-            MergeCustomObjectIntoOrderedDictionary -dst $settings -src $settingsJson
+            MergeCustomObjectIntoOrderedDictionary -dst $settings -src $settingsJson -overwrittenSettings $overwrittenSettings -isTemplateSource $isTemplateSource
+
+            # After a non-template source is merged, record which settings it declared as overwritten.
+            # Subsequent template sources must not re-apply those settings.
+            # A setting is only considered overwritten when the source both declares it in overwriteSettings
+            # and also provides the property value. This mirrors the guard in MergeCustomObjectIntoOrderedDictionary
+            # that only removes a destination setting when the source contains the property as well.
+            if (-not $isTemplateSource -and $settingsJson.PSObject.Properties.Name -contains "overwriteSettings") {
+                $settingsJson.overwriteSettings | ForEach-Object {
+                    if ($_ -notin $overwrittenSettings -and $settingsJson.PSObject.Properties.Name -contains $_) {
+                        $overwrittenSettings += $_
+                    }
+                }
+            }
+
             if ($settingsJson.PSObject.Properties.Name -eq "ConditionalSettings") {
                 foreach($conditionalSetting in $settingsJson.ConditionalSettings) {
                     if ("$conditionalSetting" -ne "") {
@@ -505,7 +538,7 @@ function ReadSettings {
                         }
                         if ($conditionMet) {
                             OutputDebug "Applying conditional settings for $($conditions -join ", ")"
-                            MergeCustomObjectIntoOrderedDictionary -dst $settings -src $conditionalSetting.settings
+                            MergeCustomObjectIntoOrderedDictionary -dst $settings -src $conditionalSetting.settings -overwrittenSettings $overwrittenSettings -isTemplateSource $isTemplateSource
                         }
                     }
                 }
diff --git a/Tests/ReadSettings.Test.ps1 b/Tests/ReadSettings.Test.ps1
index 24fdb69c9..4294c29e7 100644
--- a/Tests/ReadSettings.Test.ps1
+++ b/Tests/ReadSettings.Test.ps1
@@ -460,7 +460,130 @@ InModuleScope ReadSettings { # Allows testing of private functions
             $dst.PSObject.Properties.Name | Should -Not -Contain 'overwriteSettings'
         }
 
-        It 'Multiple conditionalSettings with same array setting are merged (all entries kept)' {
+        It 'overwriteSettings in a user source prevents subsequent template sources from re-merging that setting' {
+            Mock Write-Host { }
+            Mock Out-Host { }
+
+            Push-Location
+            $tempName = Join-Path ([System.IO.Path]::GetTempPath()) ([Guid]::NewGuid().ToString())
+            $githubFolder = Join-Path $tempName ".github"
+            $projectALGoFolder = Join-Path $tempName "Project/$ALGoFolderName"
+
+            New-Item $githubFolder -ItemType Directory | Out-Null
+            New-Item $projectALGoFolder -ItemType Directory | Out-Null
+
+            try {
+                # Template repo settings add probing paths
+                @{ "appDependencyProbingPaths" = @( @{ "repo" = "template-repo"; "version" = "latest" } ) } | ConvertTo-Json -Depth 99 |
+                Set-Content -Path (Join-Path $githubFolder $CustomTemplateRepoSettingsFileName) -Encoding utf8 -Force
+
+                # User repo settings explicitly overwrite appDependencyProbingPaths to empty
+                @{ "overwriteSettings" = @("appDependencyProbingPaths"); "appDependencyProbingPaths" = @() } | ConvertTo-Json -Depth 99 |
+                Set-Content -Path (Join-Path $githubFolder "AL-Go-Settings.json") -Encoding utf8 -Force
+
+                # Template project settings also have probing paths (this is the source of the bug)
+                @{ "appDependencyProbingPaths" = @( @{ "repo" = "template-project-repo"; "version" = "latest" } ) } | ConvertTo-Json -Depth 99 |
+                Set-Content -Path (Join-Path $githubFolder $CustomTemplateProjectSettingsFileName) -Encoding utf8 -Force
+
+                $ENV:ALGoOrgSettings = ''
+                $ENV:ALGoRepoSettings = ''
+
+                $settings = ReadSettings -baseFolder $tempName -project 'Project' -repoName 'repo' -workflowName '' -branchName '' -userName ''
+
+                # appDependencyProbingPaths must remain empty: the user's overwriteSettings must win over both template sources
+                $settings.appDependencyProbingPaths | Should -BeNullOrEmpty
+            }
+            finally {
+                Pop-Location
+                Remove-Item $tempName -Recurse -Force
+            }
+        }
+
+        It 'overwriteSettings in a user source still allows subsequent user sources to contribute to that setting' {
+            Mock Write-Host { }
+            Mock Out-Host { }
+
+            Push-Location
+            $tempName = Join-Path ([System.IO.Path]::GetTempPath()) ([Guid]::NewGuid().ToString())
+            $githubFolder = Join-Path $tempName ".github"
+            $projectALGoFolder = Join-Path $tempName "Project/$ALGoFolderName"
+
+            New-Item $githubFolder -ItemType Directory | Out-Null
+            New-Item $projectALGoFolder -ItemType Directory | Out-Null
+
+            try {
+                # Template repo settings add probing paths
+                @{ "appDependencyProbingPaths" = @( @{ "repo" = "template-repo"; "version" = "latest" } ) } | ConvertTo-Json -Depth 99 |
+                Set-Content -Path (Join-Path $githubFolder $CustomTemplateRepoSettingsFileName) -Encoding utf8 -Force
+
+                # User repo settings explicitly overwrite appDependencyProbingPaths to a specific set
+                @{ "overwriteSettings" = @("appDependencyProbingPaths"); "appDependencyProbingPaths" = @( @{ "repo" = "user-repo"; "version" = "1.0" } ) } | ConvertTo-Json -Depth 99 |
+                Set-Content -Path (Join-Path $githubFolder "AL-Go-Settings.json") -Encoding utf8 -Force
+
+                # Template project settings also have probing paths (must be ignored)
+                @{ "appDependencyProbingPaths" = @( @{ "repo" = "template-project-repo"; "version" = "latest" } ) } | ConvertTo-Json -Depth 99 |
+                Set-Content -Path (Join-Path $githubFolder $CustomTemplateProjectSettingsFileName) -Encoding utf8 -Force
+
+                # User project settings add one more probing path (must be merged on top of the user repo overwrite)
+                @{ "appDependencyProbingPaths" = @( @{ "repo" = "project-repo"; "version" = "2.0" } ) } | ConvertTo-Json -Depth 99 |
+                Set-Content -Path (Join-Path $projectALGoFolder "settings.json") -Encoding utf8 -Force
+
+                $ENV:ALGoOrgSettings = ''
+                $ENV:ALGoRepoSettings = ''
+
+                $settings = ReadSettings -baseFolder $tempName -project 'Project' -repoName 'repo' -workflowName '' -branchName '' -userName ''
+
+                # Only user-repo and project-repo entries must be present; template entries must be absent
+                $settings.appDependencyProbingPaths.Count | Should -Be 2
+                $settings.appDependencyProbingPaths.repo | Should -Contain 'user-repo'
+                $settings.appDependencyProbingPaths.repo | Should -Contain 'project-repo'
+                $settings.appDependencyProbingPaths.repo | Should -Not -Contain 'template-repo'
+                $settings.appDependencyProbingPaths.repo | Should -Not -Contain 'template-project-repo'
+            }
+            finally {
+                Pop-Location
+                Remove-Item $tempName -Recurse -Force
+            }
+        }
+
+        It 'overwriteSettings in a user source without the property value does not block template sources from merging that setting' {
+            Mock Write-Host { }
+            Mock Out-Host { }
+
+            Push-Location
+            $tempName = Join-Path ([System.IO.Path]::GetTempPath()) ([Guid]::NewGuid().ToString())
+            $githubFolder = Join-Path $tempName ".github"
+            $projectALGoFolder = Join-Path $tempName "Project/$ALGoFolderName"
+
+            New-Item $githubFolder -ItemType Directory | Out-Null
+            New-Item $projectALGoFolder -ItemType Directory | Out-Null
+
+            try {
+                # Template repo settings add probing paths
+                @{ "appDependencyProbingPaths" = @( @{ "repo" = "template-repo"; "version" = "latest" } ) } | ConvertTo-Json -Depth 99 |
+                Set-Content -Path (Join-Path $githubFolder $CustomTemplateRepoSettingsFileName) -Encoding utf8 -Force
+
+                # User repo settings declare overwriteSettings for appDependencyProbingPaths but do NOT provide the property value.
+                # This must not block template sources from contributing appDependencyProbingPaths.
+                @{ "overwriteSettings" = @("appDependencyProbingPaths") } | ConvertTo-Json -Depth 99 |
+                Set-Content -Path (Join-Path $githubFolder "AL-Go-Settings.json") -Encoding utf8 -Force
+
+                $ENV:ALGoOrgSettings = ''
+                $ENV:ALGoRepoSettings = ''
+
+                $settings = ReadSettings -baseFolder $tempName -project 'Project' -repoName 'repo' -workflowName '' -branchName '' -userName ''
+
+                # appDependencyProbingPaths must contain the template entry because the user source did not provide a value
+                $settings.appDependencyProbingPaths | Should -Not -BeNullOrEmpty
+                $settings.appDependencyProbingPaths.repo | Should -Contain 'template-repo'
+            }
+            finally {
+                Pop-Location
+                Remove-Item $tempName -Recurse -Force
+            }
+        }
+
+
             Mock Write-Host { }
             Mock Out-Host { }