diff --git a/services/surfaceflinger/FrontEnd/TransactionHandler.cpp b/services/surfaceflinger/FrontEnd/TransactionHandler.cpp
index 8629671..a209cad 100644
--- a/services/surfaceflinger/FrontEnd/TransactionHandler.cpp
+++ b/services/surfaceflinger/FrontEnd/TransactionHandler.cpp
@@ -64,11 +64,61 @@
         transactionsPendingBarrier = flushPendingTransactionQueues(transactions, flushState);
     } while (lastTransactionsPendingBarrier != transactionsPendingBarrier);
 
+    applyUnsignaledBufferTransaction(transactions, flushState);
+
     mPendingTransactionCount.fetch_sub(transactions.size());
     ATRACE_INT("TransactionQueue", static_cast<int>(mPendingTransactionCount.load()));
     return transactions;
 }
 
+void TransactionHandler::applyUnsignaledBufferTransaction(
+        std::vector<TransactionState>& transactions, TransactionFlushState& flushState) {
+    // only apply an unsignaled buffer transaction if it's the first one
+    if (!transactions.empty()) {
+        return;
+    }
+
+    if (!flushState.queueWithUnsignaledBuffer) {
+        return;
+    }
+
+    auto it = mPendingTransactionQueues.find(flushState.queueWithUnsignaledBuffer);
+    LOG_ALWAYS_FATAL_IF(it == mPendingTransactionQueues.end(),
+                        "Could not find queue with unsignaled buffer!");
+
+    auto& queue = it->second;
+    popTransactionFromPending(transactions, flushState, queue);
+    if (queue.empty()) {
+        it = mPendingTransactionQueues.erase(it);
+    }
+}
+
+void TransactionHandler::popTransactionFromPending(std::vector<TransactionState>& transactions,
+                                                   TransactionFlushState& flushState,
+                                                   std::queue<TransactionState>& queue) {
+    auto& transaction = queue.front();
+    // Transaction is ready move it from the pending queue.
+    flushState.firstTransaction = false;
+    removeFromStalledTransactions(transaction.id);
+    transactions.emplace_back(std::move(transaction));
+    queue.pop();
+
+    auto& readyToApplyTransaction = transactions.back();
+    readyToApplyTransaction.traverseStatesWithBuffers([&](const layer_state_t& state) {
+        const bool frameNumberChanged =
+                state.bufferData->flags.test(BufferData::BufferDataChange::frameNumberChanged);
+        if (frameNumberChanged) {
+            flushState.bufferLayersReadyToPresent.emplace_or_replace(state.surface.get(),
+                                                                     state.bufferData->frameNumber);
+        } else {
+            // Barrier function only used for BBQ which always includes a frame number.
+            // This value only used for barrier logic.
+            flushState.bufferLayersReadyToPresent
+                    .emplace_or_replace(state.surface.get(), std::numeric_limits<uint64_t>::max());
+        }
+    });
+}
+
 TransactionHandler::TransactionReadiness TransactionHandler::applyFilters(
         TransactionFlushState& flushState) {
     auto ready = TransactionReadiness::Ready;
@@ -79,8 +129,7 @@
             case TransactionReadiness::NotReadyBarrier:
                 return perFilterReady;
 
-            case TransactionReadiness::ReadyUnsignaled:
-            case TransactionReadiness::ReadyUnsignaledSingle:
+            case TransactionReadiness::NotReadyUnsignaled:
                 // If one of the filters allows latching an unsignaled buffer, latch this ready
                 // state.
                 ready = perFilterReady;
@@ -97,17 +146,7 @@
     int transactionsPendingBarrier = 0;
     auto it = mPendingTransactionQueues.begin();
     while (it != mPendingTransactionQueues.end()) {
-        auto& queue = it->second;
-        IBinder* queueToken = it->first.get();
-
-        // if we have already flushed a transaction with an unsignaled buffer then stop queue
-        // processing
-        if (std::find(flushState.queuesWithUnsignaledBuffers.begin(),
-                      flushState.queuesWithUnsignaledBuffers.end(),
-                      queueToken) != flushState.queuesWithUnsignaledBuffers.end()) {
-            continue;
-        }
-
+        auto& [applyToken, queue] = *it;
         while (!queue.empty()) {
             auto& transaction = queue.front();
             flushState.transaction = &transaction;
@@ -117,38 +156,14 @@
                 break;
             } else if (ready == TransactionReadiness::NotReady) {
                 break;
-            }
-
-            // Transaction is ready move it from the pending queue.
-            flushState.firstTransaction = false;
-            removeFromStalledTransactions(transaction.id);
-            transactions.emplace_back(std::move(transaction));
-            queue.pop();
-
-            // If the buffer is unsignaled, then we don't want to signal other transactions using
-            // the buffer as a barrier.
-            auto& readyToApplyTransaction = transactions.back();
-            if (ready == TransactionReadiness::Ready) {
-                readyToApplyTransaction.traverseStatesWithBuffers([&](const layer_state_t& state) {
-                    const bool frameNumberChanged = state.bufferData->flags.test(
-                            BufferData::BufferDataChange::frameNumberChanged);
-                    if (frameNumberChanged) {
-                        flushState.bufferLayersReadyToPresent
-                                .emplace_or_replace(state.surface.get(),
-                                                    state.bufferData->frameNumber);
-                    } else {
-                        // Barrier function only used for BBQ which always includes a frame number.
-                        // This value only used for barrier logic.
-                        flushState.bufferLayersReadyToPresent
-                                .emplace_or_replace(state.surface.get(),
-                                                    std::numeric_limits<uint64_t>::max());
-                    }
-                });
-            } else if (ready == TransactionReadiness::ReadyUnsignaledSingle) {
-                // Track queues with a flushed unsingaled buffer.
-                flushState.queuesWithUnsignaledBuffers.emplace_back(queueToken);
+            } else if (ready == TransactionReadiness::NotReadyUnsignaled) {
+                // We maybe able to latch this transaction if it's the only transaction
+                // ready to be applied.
+                flushState.queueWithUnsignaledBuffer = applyToken;
                 break;
             }
+            // ready == TransactionReadiness::Ready
+            popTransactionFromPending(transactions, flushState, queue);
         }
 
         if (queue.empty()) {
diff --git a/services/surfaceflinger/FrontEnd/TransactionHandler.h b/services/surfaceflinger/FrontEnd/TransactionHandler.h
index 7fc825e..865835f 100644
--- a/services/surfaceflinger/FrontEnd/TransactionHandler.h
+++ b/services/surfaceflinger/FrontEnd/TransactionHandler.h
@@ -40,14 +40,20 @@
         // Layer handles that have transactions with buffers that are ready to be applied.
         ftl::SmallMap<IBinder* /* binder address */, uint64_t /* framenumber */, 15>
                 bufferLayersReadyToPresent = {};
-        ftl::SmallVector<IBinder* /* queueToken */, 15> queuesWithUnsignaledBuffers;
+        // Tracks the queue with an unsignaled buffer. This is used to handle
+        // LatchUnsignaledConfig::AutoSingleLayer to ensure we only apply an unsignaled buffer
+        // if it's the only transaction that is ready to be applied.
+        sp<IBinder> queueWithUnsignaledBuffer = nullptr;
     };
     enum class TransactionReadiness {
-        NotReady,
-        NotReadyBarrier,
+        // Transaction is ready to be applied
         Ready,
-        ReadyUnsignaled,
-        ReadyUnsignaledSingle,
+        // Transaction has unmet conditions (fence, present time, etc) and cannot be applied.
+        NotReady,
+        // Transaction is waiting on a barrier (another buffer to be latched first)
+        NotReadyBarrier,
+        // Transaction has an unsignaled fence but can be applied if it's the only transaction
+        NotReadyUnsignaled,
     };
     using TransactionFilter = std::function<TransactionReadiness(const TransactionFlushState&)>;
 
@@ -64,6 +70,9 @@
     friend class ::android::TestableSurfaceFlinger;
 
     int flushPendingTransactionQueues(std::vector<TransactionState>&, TransactionFlushState&);
+    void applyUnsignaledBufferTransaction(std::vector<TransactionState>&, TransactionFlushState&);
+    void popTransactionFromPending(std::vector<TransactionState>&, TransactionFlushState&,
+                                   std::queue<TransactionState>&);
     TransactionReadiness applyFilters(TransactionFlushState&);
     std::unordered_map<sp<IBinder>, std::queue<TransactionState>, IListenerHash>
             mPendingTransactionQueues;
diff --git a/services/surfaceflinger/SurfaceFlinger.cpp b/services/surfaceflinger/SurfaceFlinger.cpp
index a271083..4be4d59 100644
--- a/services/surfaceflinger/SurfaceFlinger.cpp
+++ b/services/surfaceflinger/SurfaceFlinger.cpp
@@ -4266,20 +4266,23 @@
             return TraverseBuffersReturnValues::STOP_TRAVERSAL;
         }
 
-        // check fence status
-        const bool allowLatchUnsignaled = shouldLatchUnsignaled(layer, s, transaction.states.size(),
-                                                                flushState.firstTransaction);
-        ATRACE_FORMAT("%s allowLatchUnsignaled=%s", layer->getName().c_str(),
-                      allowLatchUnsignaled ? "true" : "false");
-
-        const bool acquireFenceChanged = s.bufferData &&
+        // ignore the acquire fence if LatchUnsignaledConfig::Always is set.
+        const bool checkAcquireFence = enableLatchUnsignaledConfig != LatchUnsignaledConfig::Always;
+        const bool acquireFenceAvailable = s.bufferData &&
                 s.bufferData->flags.test(BufferData::BufferDataChange::fenceChanged) &&
                 s.bufferData->acquireFence;
-        const bool fenceSignaled =
-                (!acquireFenceChanged ||
-                 s.bufferData->acquireFence->getStatus() != Fence::Status::Unsignaled);
+        const bool fenceSignaled = !checkAcquireFence || !acquireFenceAvailable ||
+                s.bufferData->acquireFence->getStatus() != Fence::Status::Unsignaled;
         if (!fenceSignaled) {
-            if (!allowLatchUnsignaled) {
+            // check fence status
+            const bool allowLatchUnsignaled =
+                    shouldLatchUnsignaled(layer, s, transaction.states.size(),
+                                          flushState.firstTransaction);
+            ATRACE_FORMAT("%s allowLatchUnsignaled=%s", layer->getName().c_str(),
+                          allowLatchUnsignaled ? "true" : "false");
+            if (allowLatchUnsignaled) {
+                ready = TransactionReadiness::NotReadyUnsignaled;
+            } else {
                 ready = TransactionReadiness::NotReady;
                 auto& listener = s.bufferData->releaseBufferListener;
                 if (listener &&
@@ -4292,10 +4295,6 @@
                 }
                 return TraverseBuffersReturnValues::STOP_TRAVERSAL;
             }
-
-            ready = enableLatchUnsignaledConfig == LatchUnsignaledConfig::AutoSingleLayer
-                    ? TransactionReadiness::ReadyUnsignaledSingle
-                    : TransactionReadiness::ReadyUnsignaled;
         }
         return TraverseBuffersReturnValues::CONTINUE_TRAVERSAL;
     });
diff --git a/services/surfaceflinger/SurfaceFlinger.h b/services/surfaceflinger/SurfaceFlinger.h
index 74d00dd..fd6125c 100644
--- a/services/surfaceflinger/SurfaceFlinger.h
+++ b/services/surfaceflinger/SurfaceFlinger.h
@@ -174,10 +174,15 @@
     // Latch unsignaled is permitted when a single layer is updated in a frame,
     // and the update includes just a buffer update (i.e. no sync transactions
     // or geometry changes).
+    // Latch unsignaled is also only permitted when a single transaction is ready
+    // to be applied. If we pass an unsignaled fence to HWC, HWC might miss presenting
+    // the frame if the fence does not fire in time. If we apply another transaction,
+    // we may penalize the other transaction unfairly.
     AutoSingleLayer,
 
     // All buffers are latched unsignaled. This behaviour is discouraged as it
     // can break sync transactions, stall the display and cause undesired side effects.
+    // This is equivalent to ignoring the acquire fence when applying transactions.
     Always,
 };
 
diff --git a/services/surfaceflinger/tests/unittests/TransactionApplicationTest.cpp b/services/surfaceflinger/tests/unittests/TransactionApplicationTest.cpp
index d4e2357..03c4e71 100644
--- a/services/surfaceflinger/tests/unittests/TransactionApplicationTest.cpp
+++ b/services/surfaceflinger/tests/unittests/TransactionApplicationTest.cpp
@@ -294,7 +294,8 @@
         return fence;
     }
 
-    ComposerState createComposerState(int layerId, sp<Fence> fence, uint64_t what) {
+    ComposerState createComposerState(int layerId, sp<Fence> fence, uint64_t what,
+                                      std::optional<sp<IBinder>> layerHandle = std::nullopt) {
         ComposerState state;
         state.state.bufferData =
                 std::make_shared<fake::BufferData>(/* bufferId */ 123L, /* width */ 1,
@@ -302,15 +303,20 @@
                                                    /* outUsage */ 0);
         state.state.bufferData->acquireFence = std::move(fence);
         state.state.layerId = layerId;
-        state.state.surface =
+        state.state.surface = layerHandle.value_or(
                 sp<Layer>::make(LayerCreationArgs(mFlinger.flinger(), nullptr, "TestLayer", 0, {}))
-                        ->getHandle();
+                        ->getHandle());
         state.state.bufferData->flags = BufferData::BufferDataChange::fenceChanged;
 
         state.state.what = what;
         if (what & layer_state_t::eCropChanged) {
             state.state.crop = Rect(1, 2, 3, 4);
         }
+        if (what & layer_state_t::eFlagsChanged) {
+            state.state.flags = layer_state_t::eEnableBackpressure;
+            state.state.mask = layer_state_t::eEnableBackpressure;
+        }
+
         return state;
     }
 
@@ -601,6 +607,41 @@
     setTransactionStates({unsignaledTransaction}, kExpectedTransactionsPending);
 }
 
+TEST_F(LatchUnsignaledAutoSingleLayerTest, UnsignaledNotAppliedWhenThereAreSignaled_SignaledFirst) {
+    const sp<IBinder> kApplyToken1 =
+            IInterface::asBinder(TransactionCompletedListener::getIInstance());
+    const sp<IBinder> kApplyToken2 = sp<BBinder>::make();
+    const sp<IBinder> kApplyToken3 = sp<BBinder>::make();
+    const auto kLayerId1 = 1;
+    const auto kLayerId2 = 2;
+    const auto kExpectedTransactionsPending = 1u;
+
+    const auto signaledTransaction =
+            createTransactionInfo(kApplyToken1,
+                                  {
+                                          createComposerState(kLayerId1,
+                                                              fence(Fence::Status::Signaled),
+                                                              layer_state_t::eBufferChanged),
+                                  });
+    const auto signaledTransaction2 =
+            createTransactionInfo(kApplyToken2,
+                                  {
+                                          createComposerState(kLayerId1,
+                                                              fence(Fence::Status::Signaled),
+                                                              layer_state_t::eBufferChanged),
+                                  });
+    const auto unsignaledTransaction =
+            createTransactionInfo(kApplyToken3,
+                                  {
+                                          createComposerState(kLayerId2,
+                                                              fence(Fence::Status::Unsignaled),
+                                                              layer_state_t::eBufferChanged),
+                                  });
+
+    setTransactionStates({signaledTransaction, signaledTransaction2, unsignaledTransaction},
+                         kExpectedTransactionsPending);
+}
+
 class LatchUnsignaledDisabledTest : public LatchUnsignaledTest {
 public:
     void SetUp() override {
@@ -943,6 +984,43 @@
                          kExpectedTransactionsPending);
 }
 
+TEST_F(LatchUnsignaledAlwaysTest, RespectsBackPressureFlag) {
+    const sp<IBinder> kApplyToken1 =
+            IInterface::asBinder(TransactionCompletedListener::getIInstance());
+    const sp<IBinder> kApplyToken2 = sp<BBinder>::make();
+    const auto kLayerId1 = 1;
+    const auto kExpectedTransactionsPending = 1u;
+    auto layer =
+            sp<Layer>::make(LayerCreationArgs(mFlinger.flinger(), nullptr, "TestLayer", 0, {}));
+    auto layerHandle = layer->getHandle();
+    const auto setBackPressureFlagTransaction =
+            createTransactionInfo(kApplyToken1,
+                                  {createComposerState(kLayerId1, fence(Fence::Status::Unsignaled),
+                                                       layer_state_t::eBufferChanged |
+                                                               layer_state_t::eFlagsChanged,
+                                                       {layerHandle})});
+    setTransactionStates({setBackPressureFlagTransaction}, 0u);
+
+    const auto unsignaledTransaction =
+            createTransactionInfo(kApplyToken1,
+                                  {
+                                          createComposerState(kLayerId1,
+                                                              fence(Fence::Status::Unsignaled),
+                                                              layer_state_t::eBufferChanged,
+                                                              {layerHandle}),
+                                  });
+    const auto unsignaledTransaction2 =
+            createTransactionInfo(kApplyToken1,
+                                  {
+                                          createComposerState(kLayerId1,
+                                                              fence(Fence::Status::Unsignaled),
+                                                              layer_state_t::eBufferChanged,
+                                                              {layerHandle}),
+                                  });
+    setTransactionStates({unsignaledTransaction, unsignaledTransaction2},
+                         kExpectedTransactionsPending);
+}
+
 TEST_F(LatchUnsignaledAlwaysTest, LatchUnsignaledWhenEarlyOffset) {
     const sp<IBinder> kApplyToken =
             IInterface::asBinder(TransactionCompletedListener::getIInstance());