diff --git a/terraform/context_apply_test.go b/terraform/context_apply_test.go
index a4acd00851..f332aeec79 100644
--- a/terraform/context_apply_test.go
+++ b/terraform/context_apply_test.go
@@ -12049,7 +12049,7 @@ resource "test_resource" "foo" {
 				}.Instance(addrs.NoKey).Absolute(addrs.RootModuleInstance),
 				&states.ResourceInstanceObjectSrc{
 					Status:    states.ObjectReady,
-					AttrsJSON: []byte(`{"id":"foo", "value":"hello"}`),
+					AttrsJSON: []byte(`{"id":"foo", "value":"hello", "network_interface":[]}`),
 					// No AttrSensitivePaths present
 				},
 				addrs.AbsProviderConfig{
@@ -12070,6 +12070,9 @@ resource "test_resource" "foo" {
 
 	fooState := state.ResourceInstance(addr)
 
+	if len(fooState.Current.AttrSensitivePaths) != 1 {
+		t.Fatalf("wrong number of sensitive paths, expected 1, got, %v", len(fooState.Current.AttrSensitivePaths))
+	}
 	got := fooState.Current.AttrSensitivePaths[0]
 	want := cty.PathValueMarks{
 		Path:  cty.GetAttrPath("value"),
diff --git a/terraform/eval_apply.go b/terraform/eval_apply.go
index a62fcaa8b9..7d14ad13a1 100644
--- a/terraform/eval_apply.go
+++ b/terraform/eval_apply.go
@@ -118,10 +118,26 @@ func (n *EvalApply) Eval(ctx EvalContext) tfdiags.Diagnostics {
 
 	// If we have an Update action, our before and after values are equal,
 	// and only differ on their sensitivity, the newVal is the after val
-	// and we should not communicate with the provider or perform further action.
+	// and we should not communicate with the provider. We do need to update
+	// the state with this new value, to ensure the sensitivity change is
+	// persisted.
 	eqV := unmarkedBefore.Equals(unmarkedAfter)
 	eq := eqV.IsKnown() && eqV.True()
 	if change.Action == plans.Update && eq && !reflect.DeepEqual(beforePaths, afterPaths) {
+		// Copy the previous state, changing only the value
+		newState := &states.ResourceInstanceObject{
+			CreateBeforeDestroy: state.CreateBeforeDestroy,
+			Dependencies:        state.Dependencies,
+			Private:             state.Private,
+			Status:              state.Status,
+			Value:               change.After,
+		}
+
+		// Write the final state
+		if n.Output != nil {
+			*n.Output = newState
+		}
+
 		return diags
 	}