diff --git a/src/core/hle/service/am/window_system.cpp b/src/core/hle/service/am/window_system.cpp
index 3858791430..2a9cba3d17 100644
--- a/src/core/hle/service/am/window_system.cpp
+++ b/src/core/hle/service/am/window_system.cpp
@@ -515,13 +515,13 @@ void WindowSystem::UpdateAppletStateLocked(Applet* applet, bool is_foreground, b
     }
 
     // Layer ordering. Composition sorts back-to-front. Now with enums for calrity.
-    s32 z_index = Background;
+s32 z_index = Background;
     if (is_overlay) {
-        z_index = Overlay;
+        z_index = this->IsOverlayOpenLocked(*applet) ? Overlay : Background;
     } else if (inherited_foreground) {
         z_index = is_obscured ? Foreground : ForegroundVisible;
     }
-    applet->display_layer_manager.SetOverlayZIndex(z_index);
+        applet->display_layer_manager.SetOverlayZIndex(z_index);
 
     // Recurse into child applets.
     for (const auto& child_applet : applet->child_applets) {
diff --git a/src/video_core/renderer_vulkan/present/layer.cpp b/src/video_core/renderer_vulkan/present/layer.cpp
index 6d3e7721f6..9f4aaf390f 100644
--- a/src/video_core/renderer_vulkan/present/layer.cpp
+++ b/src/video_core/renderer_vulkan/present/layer.cpp
@@ -94,13 +94,13 @@ void Layer::ConfigureDraw(const Device& device, PresentPushConstants* out_push_c
     const u32 scaled_width = texture_info ? texture_info->scaled_width : texture_width;
     const u32 scaled_height = texture_info ? texture_info->scaled_height : texture_height;
     const bool use_accelerated = texture_info.has_value();
+    const bool is_applet =
+        (framebuffer.layer_stack_mask & Service::Nvnflinger::LayerStackBit(
+                                            Service::Nvnflinger::LayerStackId::Recording)) == 0;
 
     RefreshResources(device, framebuffer);
     SetAntiAliasPass(device);
 #ifdef HAS_RESHADE
-    const bool is_applet =
-        (framebuffer.layer_stack_mask & Service::Nvnflinger::LayerStackBit(
-                                            Service::Nvnflinger::LayerStackId::Recording)) == 0;
     SetPostProcessPass(device, is_applet);
 #endif
 
@@ -141,8 +141,11 @@ void Layer::ConfigureDraw(const Device& device, PresentPushConstants* out_push_c
         source_image_view = fsr->Draw(device, scheduler, image_index, source_image, source_image_view, render_extent, crop_rect);
         crop_rect = {0, 0, 1, 1};
     } else if (auto* sgsr = std::get_if<SGSR>(&sr_filter)) {
-        source_image_view = sgsr->Draw(device, scheduler, image_index, source_image, source_image_view, render_extent, crop_rect);
-        crop_rect = {0, 0, 1, 1};
+        if (!is_applet) {
+            source_image_view = sgsr->Draw(device, scheduler, image_index, source_image,
+                                           source_image_view, render_extent, crop_rect);
+            crop_rect = {0, 0, 1, 1};
+        }
     }
 
     SetMatrixData(device, *out_push_constants, layout);