diff --git a/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/OutputLayerCompositionState.h b/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/OutputLayerCompositionState.h
index 356965c..b98043b 100644
--- a/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/OutputLayerCompositionState.h
+++ b/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/OutputLayerCompositionState.h
@@ -102,7 +102,7 @@
         // behind the OutputLayer represented by this CompositionState and will
         // be visible through it. Unowned - the OutputLayer's lifetime will
         // outlast this.)
-        OutputLayer* peekThroughLayer = nullptr;
+        compositionengine::OutputLayer* peekThroughLayer = nullptr;
     } overrideInfo;
 
     /*
diff --git a/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/planner/CachedSet.h b/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/planner/CachedSet.h
index a6c4eaf..1045768 100644
--- a/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/planner/CachedSet.h
+++ b/services/surfaceflinger/CompositionEngine/include/compositionengine/impl/planner/CachedSet.h
@@ -121,7 +121,7 @@
     void addHolePunchLayerIfFeasible(const CachedSet&, bool isFirstLayer);
 
     // Retrieve the layer that will be drawn behind this one.
-    OutputLayer* getHolePunchLayer() const;
+    compositionengine::OutputLayer* getHolePunchLayer() const;
 
 private:
     CachedSet() = default;
diff --git a/services/surfaceflinger/CompositionEngine/src/Output.cpp b/services/surfaceflinger/CompositionEngine/src/Output.cpp
index c809e1a..297e687 100644
--- a/services/surfaceflinger/CompositionEngine/src/Output.cpp
+++ b/services/surfaceflinger/CompositionEngine/src/Output.cpp
@@ -707,7 +707,7 @@
 
     editState().earliestPresentTime = refreshArgs.earliestPresentTime;
 
-    OutputLayer* peekThroughLayer = nullptr;
+    compositionengine::OutputLayer* peekThroughLayer = nullptr;
     sp<GraphicBuffer> previousOverride = nullptr;
     bool includeGeometry = refreshArgs.updatingGeometryThisFrame;
     uint32_t z = 0;
diff --git a/services/surfaceflinger/CompositionEngine/src/planner/CachedSet.cpp b/services/surfaceflinger/CompositionEngine/src/planner/CachedSet.cpp
index b31e89e..31662c7 100644
--- a/services/surfaceflinger/CompositionEngine/src/planner/CachedSet.cpp
+++ b/services/surfaceflinger/CompositionEngine/src/planner/CachedSet.cpp
@@ -304,7 +304,7 @@
     }
 }
 
-OutputLayer* CachedSet::getHolePunchLayer() const {
+compositionengine::OutputLayer* CachedSet::getHolePunchLayer() const {
     return mHolePunchLayer ? mHolePunchLayer->getOutputLayer() : nullptr;
 }
 
diff --git a/services/surfaceflinger/CompositionEngine/tests/OutputLayerTest.cpp b/services/surfaceflinger/CompositionEngine/tests/OutputLayerTest.cpp
index 5a92f26..818cb1b 100644
--- a/services/surfaceflinger/CompositionEngine/tests/OutputLayerTest.cpp
+++ b/services/surfaceflinger/CompositionEngine/tests/OutputLayerTest.cpp
@@ -1056,13 +1056,73 @@
                               kOverrideSurfaceDamage);
     expectSetHdrMetadataAndBufferCalls(kOverrideBuffer->getBuffer(), kOverrideFence);
     expectSetCompositionTypeCall(Hwc2::IComposerClient::Composition::DEVICE);
-
     EXPECT_CALL(*mLayerFE, hasRoundedCorners()).WillOnce(Return(false));
 
     mOutputLayer.writeStateToHWC(/*includeGeometry*/ true, /*skipLayer*/ false, 0,
                                  /*zIsOverridden*/ false, /*isPeekingThrough*/ false);
 }
 
+TEST_F(OutputLayerWriteStateToHWCTest, peekThroughChangesBlendMode) {
+    auto peekThroughLayerFE = sp<compositionengine::mock::LayerFE>::make();
+    OutputLayer peekThroughLayer{mOutput, peekThroughLayerFE};
+
+    mOutputLayer.mState.overrideInfo.peekThroughLayer = &peekThroughLayer;
+
+    expectGeometryCommonCalls(kDisplayFrame, kSourceCrop, kBufferTransform,
+                              Hwc2::IComposerClient::BlendMode::PREMULTIPLIED);
+    expectPerFrameCommonCalls();
+    EXPECT_CALL(*mLayerFE, hasRoundedCorners()).WillOnce(Return(false));
+
+    mOutputLayer.writeStateToHWC(/*includeGeometry*/ true, /*skipLayer*/ false, 0,
+                                 /*zIsOverridden*/ false, /*isPeekingThrough*/ false);
+}
+
+TEST_F(OutputLayerWriteStateToHWCTest, isPeekingThroughSetsOverride) {
+    expectGeometryCommonCalls();
+    expectPerFrameCommonCalls();
+
+    mOutputLayer.writeStateToHWC(/*includeGeometry*/ true, /*skipLayer*/ false, 0,
+                                 /*zIsOverridden*/ false, /*isPeekingThrough*/ true);
+    EXPECT_TRUE(mOutputLayer.getState().hwc->stateOverridden);
+}
+
+TEST_F(OutputLayerWriteStateToHWCTest, zIsOverriddenSetsOverride) {
+    expectGeometryCommonCalls();
+    expectPerFrameCommonCalls();
+    EXPECT_CALL(*mLayerFE, hasRoundedCorners()).WillOnce(Return(false));
+
+    mOutputLayer.writeStateToHWC(/*includeGeometry*/ true, /*skipLayer*/ false, 0,
+                                 /*zIsOverridden*/ true, /*isPeekingThrough*/
+                                 false);
+    EXPECT_TRUE(mOutputLayer.getState().hwc->stateOverridden);
+}
+
+TEST_F(OutputLayerWriteStateToHWCTest, roundedCornersForceClientComposition) {
+    expectGeometryCommonCalls();
+    expectPerFrameCommonCalls();
+    EXPECT_CALL(*mLayerFE, hasRoundedCorners()).WillOnce(Return(true));
+    expectSetCompositionTypeCall(Hwc2::IComposerClient::Composition::CLIENT);
+
+    mOutputLayer.writeStateToHWC(/*includeGeometry*/ true, /*skipLayer*/ false, 0,
+                                 /*zIsOverridden*/ false, /*isPeekingThrough*/
+                                 false);
+}
+
+TEST_F(OutputLayerWriteStateToHWCTest, roundedCornersPeekingThroughAllowsDeviceComposition) {
+    expectGeometryCommonCalls();
+    expectPerFrameCommonCalls();
+    expectSetHdrMetadataAndBufferCalls();
+    EXPECT_CALL(*mLayerFE, hasRoundedCorners()).WillRepeatedly(Return(true));
+    expectSetCompositionTypeCall(Hwc2::IComposerClient::Composition::DEVICE);
+
+    mLayerFEState.compositionType = Hwc2::IComposerClient::Composition::DEVICE;
+    mOutputLayer.writeStateToHWC(/*includeGeometry*/ true, /*skipLayer*/ false, 0,
+                                 /*zIsOverridden*/ false, /*isPeekingThrough*/
+                                 true);
+    EXPECT_EQ(Hwc2::IComposerClient::Composition::DEVICE,
+              mOutputLayer.getState().hwc->hwcCompositionType);
+}
+
 /*
  * OutputLayer::writeCursorPositionToHWC()
  */
diff --git a/services/surfaceflinger/CompositionEngine/tests/OutputTest.cpp b/services/surfaceflinger/CompositionEngine/tests/OutputTest.cpp
index 7b71957..27980a0 100644
--- a/services/surfaceflinger/CompositionEngine/tests/OutputTest.cpp
+++ b/services/surfaceflinger/CompositionEngine/tests/OutputTest.cpp
@@ -879,6 +879,64 @@
     mOutput->writeCompositionState(args);
 }
 
+TEST_F(OutputUpdateAndWriteCompositionStateTest, peekThroughLayerChangesOrder) {
+    renderengine::mock::RenderEngine renderEngine;
+    InjectedLayer layer0;
+    InjectedLayer layer1;
+    InjectedLayer layer2;
+    InjectedLayer layer3;
+
+    InSequence seq;
+    EXPECT_CALL(*layer0.outputLayer, updateCompositionState(true, false, ui::Transform::ROT_0));
+    EXPECT_CALL(*layer1.outputLayer, updateCompositionState(true, false, ui::Transform::ROT_0));
+    EXPECT_CALL(*layer2.outputLayer, updateCompositionState(true, false, ui::Transform::ROT_0));
+    EXPECT_CALL(*layer3.outputLayer, updateCompositionState(true, false, ui::Transform::ROT_0));
+
+    uint32_t z = 0;
+    EXPECT_CALL(*layer0.outputLayer,
+                writeStateToHWC(/*includeGeometry*/ true, /*skipLayer*/ false, z++,
+                                /*zIsOverridden*/ false, /*isPeekingThrough*/ false));
+
+    // After calling planComposition (which clears overrideInfo), this test sets
+    // layer3 to be the peekThroughLayer for layer1 and layer2. As a result, it
+    // comes first, setting isPeekingThrough to true and zIsOverridden to true
+    // for it and the following layers.
+    EXPECT_CALL(*layer3.outputLayer,
+                writeStateToHWC(/*includeGeometry*/ true, /*skipLayer*/ false, z++,
+                                /*zIsOverridden*/ true, /*isPeekingThrough*/
+                                true));
+    EXPECT_CALL(*layer1.outputLayer,
+                writeStateToHWC(/*includeGeometry*/ true, /*skipLayer*/ false, z++,
+                                /*zIsOverridden*/ true, /*isPeekingThrough*/ false));
+    EXPECT_CALL(*layer2.outputLayer,
+                writeStateToHWC(/*includeGeometry*/ true, /*skipLayer*/ true, z++,
+                                /*zIsOverridden*/ true, /*isPeekingThrough*/ false));
+
+    injectOutputLayer(layer0);
+    injectOutputLayer(layer1);
+    injectOutputLayer(layer2);
+    injectOutputLayer(layer3);
+
+    mOutput->editState().isEnabled = true;
+
+    CompositionRefreshArgs args;
+    args.updatingGeometryThisFrame = true;
+    args.devOptForceClientComposition = false;
+    mOutput->updateCompositionState(args);
+    mOutput->planComposition();
+
+    std::shared_ptr<renderengine::ExternalTexture> buffer = std::make_shared<
+            renderengine::ExternalTexture>(new GraphicBuffer(), renderEngine,
+                                           renderengine::ExternalTexture::Usage::READABLE |
+                                                   renderengine::ExternalTexture::Usage::WRITEABLE);
+    layer1.outputLayerState.overrideInfo.buffer = buffer;
+    layer2.outputLayerState.overrideInfo.buffer = buffer;
+    layer1.outputLayerState.overrideInfo.peekThroughLayer = layer3.outputLayer;
+    layer2.outputLayerState.overrideInfo.peekThroughLayer = layer3.outputLayer;
+
+    mOutput->writeCompositionState(args);
+}
+
 /*
  * Output::prepareFrame()
  */
diff --git a/services/surfaceflinger/CompositionEngine/tests/planner/CachedSetTest.cpp b/services/surfaceflinger/CompositionEngine/tests/planner/CachedSetTest.cpp
index 283c692..1d21ca0 100644
--- a/services/surfaceflinger/CompositionEngine/tests/planner/CachedSetTest.cpp
+++ b/services/surfaceflinger/CompositionEngine/tests/planner/CachedSetTest.cpp
@@ -19,8 +19,12 @@
 #include <compositionengine/impl/planner/LayerState.h>
 #include <compositionengine/mock/LayerFE.h>
 #include <compositionengine/mock/OutputLayer.h>
+#include <gmock/gmock-actions.h>
 #include <gtest/gtest.h>
+#include <renderengine/ExternalTexture.h>
 #include <renderengine/mock/RenderEngine.h>
+#include <ui/GraphicTypes.h>
+#include <memory>
 
 namespace android::compositionengine {
 using namespace std::chrono_literals;
@@ -334,5 +338,191 @@
     cachedSet.append(CachedSet(layer3));
 }
 
+TEST_F(CachedSetTest, holePunch_requiresBuffer) {
+    CachedSet::Layer& layer1 = *mTestLayers[0]->cachedSetLayer.get();
+    sp<mock::LayerFE> layerFE1 = mTestLayers[0]->layerFE;
+
+    CachedSet cachedSet(layer1);
+    EXPECT_CALL(*layerFE1, hasRoundedCorners()).WillRepeatedly(Return(true));
+
+    EXPECT_FALSE(cachedSet.requiresHolePunch());
+}
+
+TEST_F(CachedSetTest, holePunch_requiresRoundedCorners) {
+    CachedSet::Layer& layer1 = *mTestLayers[0]->cachedSetLayer.get();
+    mTestLayers[0]->layerFECompositionState.buffer = sp<GraphicBuffer>::make();
+
+    CachedSet cachedSet(layer1);
+
+    EXPECT_FALSE(cachedSet.requiresHolePunch());
+}
+
+TEST_F(CachedSetTest, holePunch_requiresSingleLayer) {
+    CachedSet::Layer& layer1 = *mTestLayers[0]->cachedSetLayer.get();
+    mTestLayers[0]->layerFECompositionState.buffer = sp<GraphicBuffer>::make();
+    sp<mock::LayerFE> layerFE = mTestLayers[0]->layerFE;
+    EXPECT_CALL(*layerFE, hasRoundedCorners()).WillRepeatedly(Return(true));
+
+    CachedSet::Layer& layer2 = *mTestLayers[1]->cachedSetLayer.get();
+
+    CachedSet cachedSet(layer1);
+    cachedSet.append(layer2);
+
+    EXPECT_FALSE(cachedSet.requiresHolePunch());
+}
+
+TEST_F(CachedSetTest, requiresHolePunch) {
+    CachedSet::Layer& layer = *mTestLayers[0]->cachedSetLayer.get();
+    mTestLayers[0]->layerFECompositionState.buffer = sp<GraphicBuffer>::make();
+    sp<mock::LayerFE> layerFE = mTestLayers[0]->layerFE;
+
+    CachedSet cachedSet(layer);
+    EXPECT_CALL(*layerFE, hasRoundedCorners()).WillRepeatedly(Return(true));
+
+    EXPECT_TRUE(cachedSet.requiresHolePunch());
+}
+
+TEST_F(CachedSetTest, holePunch_requiresDeviceComposition) {
+    CachedSet::Layer& layer = *mTestLayers[0]->cachedSetLayer.get();
+    sp<mock::LayerFE> layerFE = mTestLayers[0]->layerFE;
+    auto& layerFECompositionState = mTestLayers[0]->layerFECompositionState;
+    layerFECompositionState.buffer = sp<GraphicBuffer>::make();
+    layerFECompositionState.forceClientComposition = true;
+
+    CachedSet cachedSet(layer);
+    EXPECT_CALL(*layerFE, hasRoundedCorners()).WillRepeatedly(Return(true));
+
+    EXPECT_FALSE(cachedSet.requiresHolePunch());
+}
+
+TEST_F(CachedSetTest, addHolePunch_requiresOverlap) {
+    CachedSet::Layer& layer1 = *mTestLayers[0]->cachedSetLayer.get();
+    CachedSet::Layer& layer2 = *mTestLayers[1]->cachedSetLayer.get();
+    CachedSet::Layer& layer3 = *mTestLayers[2]->cachedSetLayer.get();
+
+    CachedSet cachedSet(layer1);
+    cachedSet.addLayer(layer2.getState(), kStartTime + 10ms);
+
+    cachedSet.addHolePunchLayerIfFeasible(layer3, true);
+
+    ASSERT_EQ(nullptr, cachedSet.getHolePunchLayer());
+}
+
+TEST_F(CachedSetTest, addHolePunch_requiresOpaque) {
+    mTestLayers[0]->outputLayerCompositionState.displayFrame = Rect(0, 0, 5, 5);
+    mTestLayers[0]->layerFECompositionState.isOpaque = false;
+    CachedSet::Layer& layer1 = *mTestLayers[0]->cachedSetLayer.get();
+    CachedSet::Layer& layer2 = *mTestLayers[1]->cachedSetLayer.get();
+    CachedSet::Layer& layer3 = *mTestLayers[2]->cachedSetLayer.get();
+
+    CachedSet cachedSet(layer1);
+    cachedSet.addLayer(layer2.getState(), kStartTime + 10ms);
+
+    cachedSet.addHolePunchLayerIfFeasible(layer3, false);
+
+    ASSERT_EQ(nullptr, cachedSet.getHolePunchLayer());
+}
+
+TEST_F(CachedSetTest, addHolePunch_opaque) {
+    mTestLayers[0]->outputLayerCompositionState.displayFrame = Rect(0, 0, 5, 5);
+    mTestLayers[0]->layerFECompositionState.isOpaque = true;
+    CachedSet::Layer& layer1 = *mTestLayers[0]->cachedSetLayer.get();
+    CachedSet::Layer& layer2 = *mTestLayers[1]->cachedSetLayer.get();
+    CachedSet::Layer& layer3 = *mTestLayers[2]->cachedSetLayer.get();
+
+    CachedSet cachedSet(layer1);
+    cachedSet.addLayer(layer2.getState(), kStartTime + 10ms);
+
+    cachedSet.addHolePunchLayerIfFeasible(layer3, false);
+
+    ASSERT_EQ(&mTestLayers[2]->outputLayer, cachedSet.getHolePunchLayer());
+}
+
+TEST_F(CachedSetTest, addHolePunch_firstLayer) {
+    mTestLayers[0]->outputLayerCompositionState.displayFrame = Rect(0, 0, 5, 5);
+    mTestLayers[0]->layerFECompositionState.isOpaque = false;
+    CachedSet::Layer& layer1 = *mTestLayers[0]->cachedSetLayer.get();
+    CachedSet::Layer& layer2 = *mTestLayers[1]->cachedSetLayer.get();
+    CachedSet::Layer& layer3 = *mTestLayers[2]->cachedSetLayer.get();
+
+    CachedSet cachedSet(layer1);
+    cachedSet.addLayer(layer2.getState(), kStartTime + 10ms);
+
+    cachedSet.addHolePunchLayerIfFeasible(layer3, true);
+
+    ASSERT_EQ(&mTestLayers[2]->outputLayer, cachedSet.getHolePunchLayer());
+}
+
+TEST_F(CachedSetTest, addHolePunch) {
+    mTestLayers[0]->outputLayerCompositionState.displayFrame = Rect(0, 0, 5, 5);
+    CachedSet::Layer& layer1 = *mTestLayers[0]->cachedSetLayer.get();
+    sp<mock::LayerFE> layerFE1 = mTestLayers[0]->layerFE;
+
+    CachedSet::Layer& layer2 = *mTestLayers[1]->cachedSetLayer.get();
+    sp<mock::LayerFE> layerFE2 = mTestLayers[1]->layerFE;
+
+    CachedSet::Layer& layer3 = *mTestLayers[2]->cachedSetLayer.get();
+    sp<mock::LayerFE> layerFE3 = mTestLayers[2]->layerFE;
+
+    CachedSet cachedSet(layer1);
+    cachedSet.addLayer(layer2.getState(), kStartTime + 10ms);
+
+    cachedSet.addHolePunchLayerIfFeasible(layer3, true);
+
+    std::vector<compositionengine::LayerFE::LayerSettings> clientCompList1;
+    clientCompList1.push_back({});
+    std::vector<compositionengine::LayerFE::LayerSettings> clientCompList2;
+    clientCompList2.push_back({});
+    std::vector<compositionengine::LayerFE::LayerSettings> clientCompList3;
+    clientCompList3.push_back({});
+
+    clientCompList3[0].source.buffer.buffer = std::make_shared<
+            renderengine::ExternalTexture>(sp<GraphicBuffer>::make(), mRenderEngine,
+                                           renderengine::ExternalTexture::READABLE);
+
+    EXPECT_CALL(*layerFE1, prepareClientCompositionList(_)).WillOnce(Return(clientCompList1));
+    EXPECT_CALL(*layerFE2, prepareClientCompositionList(_)).WillOnce(Return(clientCompList2));
+    EXPECT_CALL(*layerFE3, prepareClientCompositionList(_)).WillOnce(Return(clientCompList3));
+
+    const auto drawLayers = [&](const renderengine::DisplaySettings&,
+                                const std::vector<const renderengine::LayerSettings*>& layers,
+                                const std::shared_ptr<renderengine::ExternalTexture>&, const bool,
+                                base::unique_fd&&, base::unique_fd*) -> size_t {
+        // If the highlight layer is enabled, it will increase the size by 1.
+        // We're interested in the third layer either way.
+        EXPECT_GE(layers.size(), 3u);
+        const auto* holePunchSettings = layers[2];
+        EXPECT_EQ(nullptr, holePunchSettings->source.buffer.buffer);
+        EXPECT_EQ(half3(0.0f, 0.0f, 0.0f), holePunchSettings->source.solidColor);
+        EXPECT_TRUE(holePunchSettings->disableBlending);
+        EXPECT_EQ(0.0f, holePunchSettings->alpha);
+
+        return NO_ERROR;
+    };
+
+    EXPECT_CALL(mRenderEngine, drawLayers(_, _, _, _, _, _)).WillOnce(Invoke(drawLayers));
+    cachedSet.render(mRenderEngine, mOutputState);
+}
+
+TEST_F(CachedSetTest, decompose_removesHolePunch) {
+    mTestLayers[0]->outputLayerCompositionState.displayFrame = Rect(0, 0, 5, 5);
+    CachedSet::Layer& layer1 = *mTestLayers[0]->cachedSetLayer.get();
+    CachedSet::Layer& layer2 = *mTestLayers[1]->cachedSetLayer.get();
+    CachedSet::Layer& layer3 = *mTestLayers[2]->cachedSetLayer.get();
+
+    CachedSet cachedSet(layer1);
+    cachedSet.addLayer(layer2.getState(), kStartTime + 10ms);
+
+    cachedSet.addHolePunchLayerIfFeasible(layer3, true);
+
+    ASSERT_EQ(&mTestLayers[2]->outputLayer, cachedSet.getHolePunchLayer());
+
+    std::vector<CachedSet> decomposed = cachedSet.decompose();
+    EXPECT_EQ(2u, decomposed.size());
+    for (const auto& set : decomposed) {
+        EXPECT_EQ(nullptr, set.getHolePunchLayer());
+    }
+}
+
 } // namespace
 } // namespace android::compositionengine
diff --git a/services/surfaceflinger/CompositionEngine/tests/planner/FlattenerTest.cpp b/services/surfaceflinger/CompositionEngine/tests/planner/FlattenerTest.cpp
index c528087..d75b636 100644
--- a/services/surfaceflinger/CompositionEngine/tests/planner/FlattenerTest.cpp
+++ b/services/surfaceflinger/CompositionEngine/tests/planner/FlattenerTest.cpp
@@ -22,6 +22,8 @@
 #include <compositionengine/mock/LayerFE.h>
 #include <compositionengine/mock/OutputLayer.h>
 #include <gtest/gtest.h>
+#include <renderengine/ExternalTexture.h>
+#include <renderengine/LayerSettings.h>
 #include <renderengine/mock/RenderEngine.h>
 
 namespace android::compositionengine {
@@ -45,7 +47,7 @@
 
 class FlattenerTest : public testing::Test {
 public:
-    FlattenerTest() : mFlattener(std::make_unique<Flattener>(mPredictor)) {}
+    FlattenerTest() : mFlattener(std::make_unique<Flattener>(mPredictor, true)) {}
     void SetUp() override;
 
 protected:
@@ -532,5 +534,123 @@
     EXPECT_EQ(overrideBuffer4, overrideBuffer5);
 }
 
+// Tests for a PIP
+TEST_F(FlattenerTest, flattenLayers_pipRequiresRoundedCorners) {
+    auto& layerState1 = mTestLayers[0]->layerState;
+    const auto& overrideBuffer1 = layerState1->getOutputLayer()->getState().overrideInfo.buffer;
+
+    auto& layerState2 = mTestLayers[1]->layerState;
+    const auto& overrideBuffer2 = layerState2->getOutputLayer()->getState().overrideInfo.buffer;
+
+    auto& layerState3 = mTestLayers[2]->layerState;
+    const auto& overrideBuffer3 = layerState3->getOutputLayer()->getState().overrideInfo.buffer;
+
+    const std::vector<const LayerState*> layers = {
+            layerState1.get(),
+            layerState2.get(),
+            layerState3.get(),
+    };
+
+    initializeFlattener(layers);
+
+    // 3 has a buffer update, so it will not be merged, but it has no round
+    // corners, so it is not a PIP.
+    mTime += 200ms;
+    layerState3->resetFramesSinceBufferUpdate();
+
+    initializeOverrideBuffer(layers);
+    EXPECT_EQ(getNonBufferHash(layers),
+              mFlattener->flattenLayers(layers, getNonBufferHash(layers), mTime));
+
+    // This will render a CachedSet.
+    EXPECT_CALL(mRenderEngine, drawLayers(_, _, _, _, _, _)).WillOnce(Return(NO_ERROR));
+    mFlattener->renderCachedSets(mRenderEngine, mOutputState);
+
+    // We've rendered a CachedSet, but we haven't merged it in.
+    EXPECT_EQ(nullptr, overrideBuffer1);
+    EXPECT_EQ(nullptr, overrideBuffer2);
+    EXPECT_EQ(nullptr, overrideBuffer3);
+
+    // This time we merge the CachedSet in, so we have a new hash, and we should
+    // only have two sets.
+    EXPECT_CALL(mRenderEngine, drawLayers(_, _, _, _, _, _)).Times(0);
+    initializeOverrideBuffer(layers);
+    EXPECT_NE(getNonBufferHash(layers),
+              mFlattener->flattenLayers(layers, getNonBufferHash(layers), mTime));
+    mFlattener->renderCachedSets(mRenderEngine, mOutputState);
+
+    EXPECT_NE(nullptr, overrideBuffer1);
+    EXPECT_EQ(overrideBuffer1, overrideBuffer2);
+    EXPECT_EQ(nullptr, overrideBuffer3);
+}
+
+TEST_F(FlattenerTest, flattenLayers_pip) {
+    mTestLayers[0]->outputLayerCompositionState.displayFrame = Rect(0, 0, 5, 5);
+    auto& layerState1 = mTestLayers[0]->layerState;
+    const auto& overrideBuffer1 = layerState1->getOutputLayer()->getState().overrideInfo.buffer;
+
+    auto& layerState2 = mTestLayers[1]->layerState;
+    const auto& overrideBuffer2 = layerState2->getOutputLayer()->getState().overrideInfo.buffer;
+
+    auto& layerState3 = mTestLayers[2]->layerState;
+    const auto& overrideBuffer3 = layerState3->getOutputLayer()->getState().overrideInfo.buffer;
+
+    EXPECT_CALL(*mTestLayers[2]->layerFE, hasRoundedCorners()).WillRepeatedly(Return(true));
+
+    std::vector<LayerFE::LayerSettings> clientCompositionList = {
+            LayerFE::LayerSettings{},
+    };
+    clientCompositionList[0].source.buffer.buffer = std::make_shared<
+            renderengine::ExternalTexture>(mTestLayers[2]->layerFECompositionState.buffer,
+                                           mRenderEngine,
+                                           renderengine::ExternalTexture::Usage::READABLE);
+    EXPECT_CALL(*mTestLayers[2]->layerFE, prepareClientCompositionList(_))
+            .WillOnce(Return(clientCompositionList));
+
+    const std::vector<const LayerState*> layers = {
+            layerState1.get(),
+            layerState2.get(),
+            layerState3.get(),
+    };
+
+    initializeFlattener(layers);
+
+    // 3 has a buffer update, so it will not be merged, and it has round
+    // corners, so it is a PIP.
+    mTime += 200ms;
+    layerState3->resetFramesSinceBufferUpdate();
+
+    initializeOverrideBuffer(layers);
+    EXPECT_EQ(getNonBufferHash(layers),
+              mFlattener->flattenLayers(layers, getNonBufferHash(layers), mTime));
+
+    // This will render a CachedSet.
+    EXPECT_CALL(mRenderEngine, drawLayers(_, _, _, _, _, _)).WillOnce(Return(NO_ERROR));
+    mFlattener->renderCachedSets(mRenderEngine, mOutputState);
+
+    // We've rendered a CachedSet, but we haven't merged it in.
+    EXPECT_EQ(nullptr, overrideBuffer1);
+    EXPECT_EQ(nullptr, overrideBuffer2);
+    EXPECT_EQ(nullptr, overrideBuffer3);
+
+    // This time we merge the CachedSet in, so we have a new hash, and we should
+    // only have two sets.
+    EXPECT_CALL(mRenderEngine, drawLayers(_, _, _, _, _, _)).Times(0);
+    initializeOverrideBuffer(layers);
+    EXPECT_NE(getNonBufferHash(layers),
+              mFlattener->flattenLayers(layers, getNonBufferHash(layers), mTime));
+    mFlattener->renderCachedSets(mRenderEngine, mOutputState);
+
+    EXPECT_NE(nullptr, overrideBuffer1);
+    EXPECT_EQ(overrideBuffer1, overrideBuffer2);
+    EXPECT_EQ(nullptr, overrideBuffer3);
+
+    const auto* peekThroughLayer1 =
+            layerState1->getOutputLayer()->getState().overrideInfo.peekThroughLayer;
+    const auto* peekThroughLayer2 =
+            layerState2->getOutputLayer()->getState().overrideInfo.peekThroughLayer;
+    EXPECT_EQ(&mTestLayers[2]->outputLayer, peekThroughLayer1);
+    EXPECT_EQ(peekThroughLayer1, peekThroughLayer2);
+}
 } // namespace
 } // namespace android::compositionengine