diff --git a/libs/WindowManager/Shell/src/com/android/wm/shell/windowdecor/DesktopModeWindowDecorViewModel.java b/libs/WindowManager/Shell/src/com/android/wm/shell/windowdecor/DesktopModeWindowDecorViewModel.java
index 8312aef..d1ec1c8 100644
--- a/libs/WindowManager/Shell/src/com/android/wm/shell/windowdecor/DesktopModeWindowDecorViewModel.java
+++ b/libs/WindowManager/Shell/src/com/android/wm/shell/windowdecor/DesktopModeWindowDecorViewModel.java
@@ -669,12 +669,6 @@
                 View v, MotionEvent e) {
             final int id = v.getId();
             if (id == R.id.caption_handle) {
-                if (e.getActionMasked() == MotionEvent.ACTION_DOWN) {
-                    // Caption handle is located within the status bar region, meaning the
-                    // DisplayPolicy will attempt to transfer this input to status bar if it's
-                    // a swipe down. Pilfer here to keep the gesture in handle alone.
-                    mInputManager.pilferPointers(v.getViewRootImpl().getInputToken());
-                }
                 handleCaptionThroughStatusBar(e, decoration);
                 final boolean wasDragging = mIsDragging;
                 updateDragStatus(e.getActionMasked());
diff --git a/libs/WindowManager/Shell/src/com/android/wm/shell/windowdecor/DesktopModeWindowDecoration.java b/libs/WindowManager/Shell/src/com/android/wm/shell/windowdecor/DesktopModeWindowDecoration.java
index 529def7..6e88325 100644
--- a/libs/WindowManager/Shell/src/com/android/wm/shell/windowdecor/DesktopModeWindowDecoration.java
+++ b/libs/WindowManager/Shell/src/com/android/wm/shell/windowdecor/DesktopModeWindowDecoration.java
@@ -520,11 +520,7 @@
             return new AppHandleViewHolder(
                     mResult.mRootView,
                     mOnCaptionTouchListener,
-                    mOnCaptionButtonClickListener,
-                    (v, event) -> {
-                        updateHoverAndPressStatus(event);
-                        return true;
-                    }
+                    mOnCaptionButtonClickListener
             );
         } else if (mRelayoutParams.mLayoutResId
                 == R.layout.desktop_mode_app_header) {
@@ -589,9 +585,11 @@
             controlsElement.mWidthResId = R.dimen.desktop_mode_customizable_caption_margin_end;
             controlsElement.mAlignment = RelayoutParams.OccludingCaptionElement.Alignment.END;
             relayoutParams.mOccludingCaptionElements.add(controlsElement);
-        } else if (isAppHandle) {
+        } else if (isAppHandle && !Flags.enableAdditionalWindowsAboveStatusBar()) {
             // The focused decor (fullscreen/split) does not need to handle input because input in
             // the App Handle is handled by the InputMonitor in DesktopModeWindowDecorViewModel.
+            // Note: This does not apply with the above flag enabled as the status bar input layer
+            // will forward events to the handle directly.
             relayoutParams.mInputFeatures
                     |= WindowManager.LayoutParams.INPUT_FEATURE_NO_INPUT_CHANNEL;
         }
diff --git a/libs/WindowManager/Shell/src/com/android/wm/shell/windowdecor/viewholder/AppHandleViewHolder.kt b/libs/WindowManager/Shell/src/com/android/wm/shell/windowdecor/viewholder/AppHandleViewHolder.kt
index 76dfe37..57d8cac 100644
--- a/libs/WindowManager/Shell/src/com/android/wm/shell/windowdecor/viewholder/AppHandleViewHolder.kt
+++ b/libs/WindowManager/Shell/src/com/android/wm/shell/windowdecor/viewholder/AppHandleViewHolder.kt
@@ -21,10 +21,11 @@
 import android.content.res.ColorStateList
 import android.graphics.Color
 import android.graphics.Point
+import android.hardware.input.InputManager
+import android.view.MotionEvent.ACTION_DOWN
 import android.view.SurfaceControl
 import android.view.View
 import android.view.View.OnClickListener
-import android.view.View.OnHoverListener
 import android.view.WindowInsetsController.APPEARANCE_LIGHT_STATUS_BARS
 import android.view.WindowManager
 import android.widget.ImageButton
@@ -39,9 +40,8 @@
  */
 internal class AppHandleViewHolder(
     rootView: View,
-    private val onCaptionTouchListener: View.OnTouchListener,
-    private val onCaptionButtonClickListener: OnClickListener,
-    private val onCaptionHoverListener: OnHoverListener,
+    onCaptionTouchListener: View.OnTouchListener,
+    onCaptionButtonClickListener: OnClickListener
 ) : WindowDecorationViewHolder(rootView) {
 
     companion object {
@@ -51,6 +51,7 @@
     private val windowManager = context.getSystemService(WindowManager::class.java)
     private val captionView: View = rootView.requireViewById(R.id.desktop_mode_caption)
     private val captionHandle: ImageButton = rootView.requireViewById(R.id.caption_handle)
+    private val inputManager = context.getSystemService(InputManager::class.java)
 
     // An invisible View that takes up the same coordinates as captionHandle but is layered
     // above the status bar. The purpose of this View is to receive input intended for
@@ -61,7 +62,6 @@
         captionView.setOnTouchListener(onCaptionTouchListener)
         captionHandle.setOnTouchListener(onCaptionTouchListener)
         captionHandle.setOnClickListener(onCaptionButtonClickListener)
-        captionHandle.setOnHoverListener(onCaptionHoverListener)
     }
 
     override fun bindData(
@@ -106,10 +106,19 @@
         // gesture listener that receives events before window. This is to prevent notification
         // shade gesture when we swipe down to enter desktop.
         lp.inputFeatures = WindowManager.LayoutParams.INPUT_FEATURE_SPY
-        view.id = R.id.caption_handle
-        view.setOnClickListener(onCaptionButtonClickListener)
-        view.setOnTouchListener(onCaptionTouchListener)
-        view.setOnHoverListener(onCaptionHoverListener)
+        view.setOnHoverListener { _, event ->
+            captionHandle.onHoverEvent(event)
+        }
+        // Caption handle is located within the status bar region, meaning the
+        // DisplayPolicy will attempt to transfer this input to status bar if it's
+        // a swipe down. Pilfer here to keep the gesture in handle alone.
+        view.setOnTouchListener { v, event ->
+            if (event.actionMasked == ACTION_DOWN) {
+                inputManager.pilferPointers(v.viewRootImpl.inputToken)
+            }
+            captionHandle.dispatchTouchEvent(event)
+            true
+        }
         windowManager.updateViewLayout(view, lp)
     }