diff --git a/fs_mgr/libsnapshot/device_info.cpp b/fs_mgr/libsnapshot/device_info.cpp
index 0ab6103..e0969f4 100644
--- a/fs_mgr/libsnapshot/device_info.cpp
+++ b/fs_mgr/libsnapshot/device_info.cpp
@@ -104,6 +104,24 @@
     return first_stage_init_;
 }
 
+bool DeviceInfo::SetActiveBootSlot([[maybe_unused]] unsigned int slot) {
+#ifdef LIBSNAPSHOT_USE_HAL
+    if (!EnsureBootHal()) {
+        return false;
+    }
+
+    CommandResult result = boot_control_->SetActiveBootSlot(slot);
+    if (!result.success) {
+        LOG(ERROR) << "Error setting slot " << slot << " active: " << result.errMsg;
+        return false;
+    }
+    return true;
+#else
+    LOG(ERROR) << "HAL support not enabled.";
+    return false;
+#endif
+}
+
 bool DeviceInfo::SetSlotAsUnbootable([[maybe_unused]] unsigned int slot) {
 #ifdef LIBSNAPSHOT_USE_HAL
     if (!EnsureBootHal()) {
diff --git a/fs_mgr/libsnapshot/device_info.h b/fs_mgr/libsnapshot/device_info.h
index d06f1be..9153abb 100644
--- a/fs_mgr/libsnapshot/device_info.h
+++ b/fs_mgr/libsnapshot/device_info.h
@@ -36,6 +36,7 @@
     std::string GetSuperDevice(uint32_t slot) const override;
     bool IsOverlayfsSetup() const override;
     bool SetBootControlMergeStatus(MergeStatus status) override;
+    bool SetActiveBootSlot(unsigned int slot) override;
     bool SetSlotAsUnbootable(unsigned int slot) override;
     bool IsRecovery() const override;
     std::unique_ptr<IImageManager> OpenImageManager() const override;
diff --git a/fs_mgr/libsnapshot/include/libsnapshot/mock_device_info.h b/fs_mgr/libsnapshot/include/libsnapshot/mock_device_info.h
index 573a85b..ca1ac1e 100644
--- a/fs_mgr/libsnapshot/include/libsnapshot/mock_device_info.h
+++ b/fs_mgr/libsnapshot/include/libsnapshot/mock_device_info.h
@@ -29,6 +29,7 @@
     MOCK_METHOD(const android::fs_mgr::IPartitionOpener&, GetPartitionOpener, (), (const));
     MOCK_METHOD(bool, IsOverlayfsSetup, (), (const, override));
     MOCK_METHOD(bool, SetBootControlMergeStatus, (MergeStatus status), (override));
+    MOCK_METHOD(bool, SetActiveBootSlot, (unsigned int slot), (override));
     MOCK_METHOD(bool, SetSlotAsUnbootable, (unsigned int slot), (override));
     MOCK_METHOD(bool, IsRecovery, (), (const, override));
     MOCK_METHOD(bool, IsFirstStageInit, (), (const, override));
diff --git a/fs_mgr/libsnapshot/include/libsnapshot/snapshot.h b/fs_mgr/libsnapshot/include/libsnapshot/snapshot.h
index 4a3ec1d..deb2d6e 100644
--- a/fs_mgr/libsnapshot/include/libsnapshot/snapshot.h
+++ b/fs_mgr/libsnapshot/include/libsnapshot/snapshot.h
@@ -104,6 +104,7 @@
         virtual const android::fs_mgr::IPartitionOpener& GetPartitionOpener() const = 0;
         virtual bool IsOverlayfsSetup() const = 0;
         virtual bool SetBootControlMergeStatus(MergeStatus status) = 0;
+        virtual bool SetActiveBootSlot(unsigned int slot) = 0;
         virtual bool SetSlotAsUnbootable(unsigned int slot) = 0;
         virtual bool IsRecovery() const = 0;
         virtual bool IsTestDevice() const { return false; }
@@ -675,6 +676,8 @@
     std::string GetBootSnapshotsWithoutSlotSwitchPath();
     std::string GetSnapuserdFromSystemPath();
 
+    bool HasForwardMergeIndicator();
+
     const LpMetadata* ReadOldPartitionMetadata(LockedFile* lock);
 
     bool MapAllPartitions(LockedFile* lock, const std::string& super_device, uint32_t slot,
@@ -785,11 +788,8 @@
     bool UpdateForwardMergeIndicator(bool wipe);
 
     // Helper for HandleImminentDataWipe.
-    // Call ProcessUpdateState and handle states with special rules before data wipe. Specifically,
-    // if |allow_forward_merge| and allow-forward-merge indicator exists, initiate merge if
-    // necessary.
-    UpdateState ProcessUpdateStateOnDataWipe(bool allow_forward_merge,
-                                             const std::function<bool()>& callback);
+    // Call ProcessUpdateState and handle states with special rules before data wipe.
+    UpdateState ProcessUpdateStateOnDataWipe(const std::function<bool()>& callback);
 
     // Return device string of a mapped image, or if it is not available, the mapped image path.
     bool GetMappedImageDeviceStringOrPath(const std::string& device_name,
@@ -848,7 +848,6 @@
     std::string metadata_dir_;
     std::unique_ptr<IImageManager> images_;
     bool use_first_stage_snapuserd_ = false;
-    bool in_factory_data_reset_ = false;
     std::function<bool(const std::string&)> uevent_regen_callback_;
     std::unique_ptr<SnapuserdClient> snapuserd_client_;
     std::unique_ptr<LpMetadata> old_partition_metadata_;
diff --git a/fs_mgr/libsnapshot/include_test/libsnapshot/test_helpers.h b/fs_mgr/libsnapshot/include_test/libsnapshot/test_helpers.h
index 0afd8bd..620b03c 100644
--- a/fs_mgr/libsnapshot/include_test/libsnapshot/test_helpers.h
+++ b/fs_mgr/libsnapshot/include_test/libsnapshot/test_helpers.h
@@ -92,6 +92,7 @@
     }
     bool IsOverlayfsSetup() const override { return false; }
     bool IsRecovery() const override { return recovery_; }
+    bool SetActiveBootSlot([[maybe_unused]] unsigned int slot) override { return true; }
     bool SetSlotAsUnbootable(unsigned int slot) override {
         unbootable_slots_.insert(slot);
         return true;
diff --git a/fs_mgr/libsnapshot/partition_cow_creator_test.cpp b/fs_mgr/libsnapshot/partition_cow_creator_test.cpp
index a4a2c1a..8356c0c 100644
--- a/fs_mgr/libsnapshot/partition_cow_creator_test.cpp
+++ b/fs_mgr/libsnapshot/partition_cow_creator_test.cpp
@@ -250,8 +250,8 @@
                                 .target_partition = system_b,
                                 .current_metadata = builder_a.get(),
                                 .current_suffix = "_a",
-                                .using_snapuserd = true,
-                                .update = &update};
+                                .update = &update,
+                                .using_snapuserd = true};
 
     auto ret = creator.Run();
     ASSERT_TRUE(ret.has_value());
@@ -276,8 +276,8 @@
                                 .target_partition = system_b,
                                 .current_metadata = builder_a.get(),
                                 .current_suffix = "_a",
-                                .using_snapuserd = true,
-                                .update = nullptr};
+                                .update = nullptr,
+                                .using_snapuserd = true};
 
     auto ret = creator.Run();
     ASSERT_FALSE(ret.has_value());
diff --git a/fs_mgr/libsnapshot/snapshot.cpp b/fs_mgr/libsnapshot/snapshot.cpp
index 265445b..108fd90 100644
--- a/fs_mgr/libsnapshot/snapshot.cpp
+++ b/fs_mgr/libsnapshot/snapshot.cpp
@@ -4005,44 +4005,90 @@
         // We allow the wipe to continue, because if we can't mount /metadata,
         // it is unlikely the device would have booted anyway. If there is no
         // metadata partition, then the device predates Virtual A/B.
+        LOG(INFO) << "/metadata not found; allowing wipe.";
         return true;
     }
 
-    // Check this early, so we don't accidentally start trying to populate
-    // the state file in recovery. Note we don't call GetUpdateState since
-    // we want errors in acquiring the lock to be propagated, instead of
-    // returning UpdateState::None.
-    auto state_file = GetStateFilePath();
-    if (access(state_file.c_str(), F_OK) != 0 && errno == ENOENT) {
-        return true;
-    }
-
-    auto slot_number = SlotNumberForSlotSuffix(device_->GetSlotSuffix());
-    auto super_path = device_->GetSuperDevice(slot_number);
-    if (!CreateLogicalAndSnapshotPartitions(super_path, 20s)) {
-        LOG(ERROR) << "Unable to map partitions to complete merge.";
-        return false;
-    }
-
-    auto process_callback = [&]() -> bool {
-        if (callback) {
-            callback();
+    // This could happen if /metadata mounted but there is no filesystem
+    // structure. Weird, but we have to assume there's no OTA pending, and
+    // thus we let the wipe proceed.
+    UpdateState state;
+    {
+        auto lock = LockExclusive();
+        if (!lock) {
+            LOG(ERROR) << "Unable to determine update state; allowing wipe.";
+            return true;
         }
-        return true;
-    };
 
-    in_factory_data_reset_ = true;
-    UpdateState state =
-            ProcessUpdateStateOnDataWipe(true /* allow_forward_merge */, process_callback);
-    in_factory_data_reset_ = false;
-
-    if (state == UpdateState::MergeFailed) {
-        return false;
+        state = ReadUpdateState(lock.get());
+        LOG(INFO) << "Update state before wipe: " << state << "; slot: " << GetCurrentSlot()
+                  << "; suffix: " << device_->GetSlotSuffix();
     }
 
-    // Nothing should be depending on partitions now, so unmap them all.
-    if (!UnmapAllPartitionsInRecovery()) {
-        LOG(ERROR) << "Unable to unmap all partitions; fastboot may fail to flash.";
+    bool try_merge = false;
+    switch (state) {
+        case UpdateState::None:
+        case UpdateState::Initiated:
+            LOG(INFO) << "Wipe is not impacted by update state; allowing wipe.";
+            break;
+        case UpdateState::Unverified:
+            if (GetCurrentSlot() != Slot::Target) {
+                LOG(INFO) << "Wipe is not impacted by rolled back update; allowing wipe";
+                break;
+            }
+            if (!HasForwardMergeIndicator()) {
+                auto slot_number = SlotNumberForSlotSuffix(device_->GetSlotSuffix());
+                auto other_slot_number = SlotNumberForSlotSuffix(device_->GetOtherSlotSuffix());
+
+                // We're not allowed to forward merge, so forcefully rollback the
+                // slot switch.
+                LOG(INFO) << "Allowing wipe due to lack of forward merge indicator; reverting to "
+                             "old slot since update will be deleted.";
+                device_->SetSlotAsUnbootable(slot_number);
+                device_->SetActiveBootSlot(other_slot_number);
+                break;
+            }
+
+            // Forward merge indicator means we have to mount snapshots and try to merge.
+            LOG(INFO) << "Forward merge indicator is present.";
+            try_merge = true;
+            break;
+        case UpdateState::Merging:
+        case UpdateState::MergeFailed:
+            try_merge = true;
+            break;
+        case UpdateState::MergeNeedsReboot:
+        case UpdateState::Cancelled:
+            LOG(INFO) << "Unexpected update state in recovery; allowing wipe.";
+            break;
+        default:
+            break;
+    }
+
+    if (try_merge) {
+        auto slot_number = SlotNumberForSlotSuffix(device_->GetSlotSuffix());
+        auto super_path = device_->GetSuperDevice(slot_number);
+        if (!CreateLogicalAndSnapshotPartitions(super_path, 20s)) {
+            LOG(ERROR) << "Unable to map partitions to complete merge.";
+            return false;
+        }
+
+        auto process_callback = [&]() -> bool {
+            if (callback) {
+                callback();
+            }
+            return true;
+        };
+
+        state = ProcessUpdateStateOnDataWipe(process_callback);
+        if (state == UpdateState::MergeFailed) {
+            return false;
+        }
+
+        // Nothing should be depending on partitions now, so unmap them all.
+        if (!UnmapAllPartitionsInRecovery()) {
+            LOG(ERROR) << "Unable to unmap all partitions; fastboot may fail to flash.";
+        }
     }
 
     if (state != UpdateState::None) {
@@ -4088,58 +4134,40 @@
     return true;
 }
 
-UpdateState SnapshotManager::ProcessUpdateStateOnDataWipe(bool allow_forward_merge,
-                                                          const std::function<bool()>& callback) {
-    auto slot_number = SlotNumberForSlotSuffix(device_->GetSlotSuffix());
-    UpdateState state = ProcessUpdateState(callback);
-    LOG(INFO) << "Update state in recovery: " << state;
-    switch (state) {
-        case UpdateState::MergeFailed:
-            LOG(ERROR) << "Unrecoverable merge failure detected.";
-            return state;
-        case UpdateState::Unverified: {
-            // If an OTA was just applied but has not yet started merging:
-            //
-            // - if forward merge is allowed, initiate merge and call
-            // ProcessUpdateState again.
-            //
-            // - if forward merge is not allowed, we
-            // have no choice but to revert slots, because the current slot will
-            // immediately become unbootable. Rather than wait for the device
-            // to reboot N times until a rollback, we proactively disable the
-            // new slot instead.
-            //
-            // Since the rollback is inevitable, we don't treat a HAL failure
-            // as an error here.
-            auto slot = GetCurrentSlot();
-            if (slot == Slot::Target) {
-                if (allow_forward_merge &&
-                    access(GetForwardMergeIndicatorPath().c_str(), F_OK) == 0) {
-                    LOG(INFO) << "Forward merge allowed, initiating merge now.";
-
-                    if (!InitiateMerge()) {
-                        LOG(ERROR) << "Failed to initiate merge on data wipe.";
-                        return UpdateState::MergeFailed;
-                    }
-                    return ProcessUpdateStateOnDataWipe(false /* allow_forward_merge */, callback);
+UpdateState SnapshotManager::ProcessUpdateStateOnDataWipe(const std::function<bool()>& callback) {
+    while (true) {
+        UpdateState state = ProcessUpdateState(callback);
+        LOG(INFO) << "Processed updated state in recovery: " << state;
+        switch (state) {
+            case UpdateState::MergeFailed:
+                LOG(ERROR) << "Unrecoverable merge failure detected.";
+                return state;
+            case UpdateState::Unverified: {
+                // Unverified was already handled earlier, in HandleImminentDataWipe,
+                // but it will fall through here if a forward merge is required.
+                //
+                // If InitiateMerge fails, we early return. If it succeeds, then we
+                // are guaranteed that the next call to ProcessUpdateState will not
+                // return Unverified.
+                if (!InitiateMerge()) {
+                    LOG(ERROR) << "Failed to initiate merge on data wipe.";
+                    return UpdateState::MergeFailed;
                 }
-
-                LOG(ERROR) << "Reverting to old slot since update will be deleted.";
-                device_->SetSlotAsUnbootable(slot_number);
-            } else {
-                LOG(INFO) << "Booting from " << slot << " slot, no action is taken.";
+                continue;
             }
-            break;
+            case UpdateState::MergeNeedsReboot:
+                // We shouldn't get here, because nothing is depending on
+                // logical partitions.
+                LOG(ERROR) << "Unexpected merge-needs-reboot state in recovery.";
+                return state;
+            default:
+                return state;
         }
-        case UpdateState::MergeNeedsReboot:
-            // We shouldn't get here, because nothing is depending on
-            // logical partitions.
-            LOG(ERROR) << "Unexpected merge-needs-reboot state in recovery.";
-            break;
-        default:
-            break;
     }
-    return state;
+}
+
+bool SnapshotManager::HasForwardMergeIndicator() {
+    return access(GetForwardMergeIndicatorPath().c_str(), F_OK) == 0;
 }
 
 bool SnapshotManager::EnsureNoOverflowSnapshot(LockedFile* lock) {
diff --git a/fs_mgr/libsnapshot/snapshot_test.cpp b/fs_mgr/libsnapshot/snapshot_test.cpp
index b2e36d4..c29da17 100644
--- a/fs_mgr/libsnapshot/snapshot_test.cpp
+++ b/fs_mgr/libsnapshot/snapshot_test.cpp
@@ -2102,10 +2102,10 @@
     test_device->set_recovery(true);
     auto new_sm = NewManagerForFirstStageMount(test_device);
 
+    EXPECT_EQ(new_sm->GetUpdateState(), UpdateState::Unverified);
     ASSERT_TRUE(new_sm->HandleImminentDataWipe());
     // Manually mount metadata so that we can call GetUpdateState() below.
     MountMetadata();
-    EXPECT_EQ(new_sm->GetUpdateState(), UpdateState::None);
     EXPECT_TRUE(test_device->IsSlotUnbootable(1));
     EXPECT_FALSE(test_device->IsSlotUnbootable(0));
 }
@@ -2127,6 +2127,7 @@
     test_device->set_recovery(true);
     auto new_sm = NewManagerForFirstStageMount(test_device);
 
+    EXPECT_EQ(new_sm->GetUpdateState(), UpdateState::Unverified);
     ASSERT_TRUE(new_sm->HandleImminentDataWipe());
     EXPECT_EQ(new_sm->GetUpdateState(), UpdateState::None);
     EXPECT_FALSE(test_device->IsSlotUnbootable(0));
@@ -2135,10 +2136,6 @@
 
 // Test update package that requests data wipe.
 TEST_F(SnapshotUpdateTest, DataWipeRequiredInPackage) {
-    if (ShouldSkipLegacyMerging()) {
-        GTEST_SKIP() << "Skipping legacy merge in test";
-    }
-
     AddOperationForPartitions();
     // Execute the update.
     ASSERT_TRUE(sm->BeginUpdate());
@@ -2157,6 +2154,7 @@
     test_device->set_recovery(true);
     auto new_sm = NewManagerForFirstStageMount(test_device);
 
+    EXPECT_EQ(new_sm->GetUpdateState(), UpdateState::Unverified);
     ASSERT_TRUE(new_sm->HandleImminentDataWipe());
     // Manually mount metadata so that we can call GetUpdateState() below.
     MountMetadata();
@@ -2178,10 +2176,6 @@
 
 // Test update package that requests data wipe.
 TEST_F(SnapshotUpdateTest, DataWipeWithStaleSnapshots) {
-    if (ShouldSkipLegacyMerging()) {
-        GTEST_SKIP() << "Skipping legacy merge in test";
-    }
-
     AddOperationForPartitions();
 
     // Execute the update.
@@ -2222,6 +2216,7 @@
     test_device->set_recovery(true);
     auto new_sm = NewManagerForFirstStageMount(test_device);
 
+    EXPECT_EQ(new_sm->GetUpdateState(), UpdateState::Unverified);
     ASSERT_TRUE(new_sm->HandleImminentDataWipe());
     // Manually mount metadata so that we can call GetUpdateState() below.
     MountMetadata();