diff --git a/core/java/android/view/InsetsSource.java b/core/java/android/view/InsetsSource.java
index e02e600f53c8e..39477380e196f 100644
--- a/core/java/android/view/InsetsSource.java
+++ b/core/java/android/view/InsetsSource.java
@@ -20,7 +20,6 @@ import static android.view.InsetsSourceProto.FRAME;
 import static android.view.InsetsSourceProto.TYPE;
 import static android.view.InsetsSourceProto.VISIBLE;
 import static android.view.InsetsSourceProto.VISIBLE_FRAME;
-import static android.view.ViewRootImpl.CAPTION_ON_SHELL;
 import static android.view.WindowInsets.Type.ime;
 
 import android.annotation.IntRange;
@@ -169,7 +168,7 @@ public class InsetsSource implements Parcelable {
         // During drag-move and drag-resizing, the caption insets position may not get updated
         // before the app frame get updated. To layout the app content correctly during drag events,
         // we always return the insets with the corresponding height covering the top.
-        if (!CAPTION_ON_SHELL && getType() == WindowInsets.Type.captionBar()) {
+        if (getType() == WindowInsets.Type.captionBar()) {
             return Insets.of(0, frame.height(), 0, 0);
         }
         // Checks for whether there is shared edge with insets for 0-width/height window.
diff --git a/core/tests/coretests/src/android/view/InsetsSourceTest.java b/core/tests/coretests/src/android/view/InsetsSourceTest.java
index 1db6587e12836..6fa8f11173438 100644
--- a/core/tests/coretests/src/android/view/InsetsSourceTest.java
+++ b/core/tests/coretests/src/android/view/InsetsSourceTest.java
@@ -19,6 +19,7 @@ package android.view;
 import static android.view.WindowInsets.Type.FIRST;
 import static android.view.WindowInsets.Type.LAST;
 import static android.view.WindowInsets.Type.SIZE;
+import static android.view.WindowInsets.Type.captionBar;
 import static android.view.WindowInsets.Type.ime;
 import static android.view.WindowInsets.Type.navigationBars;
 
@@ -51,11 +52,13 @@ public class InsetsSourceTest {
 
     private final InsetsSource mSource = new InsetsSource(0 /* id */, navigationBars());
     private final InsetsSource mImeSource = new InsetsSource(1 /* id */, ime());
+    private final InsetsSource mCaptionSource = new InsetsSource(2 /* id */, captionBar());
 
     @Before
     public void setUp() {
         mSource.setVisible(true);
         mImeSource.setVisible(true);
+        mCaptionSource.setVisible(true);
     }
 
     @Test
@@ -106,6 +109,17 @@ public class InsetsSourceTest {
         assertEquals(Insets.of(0, 0, 0, 100), insets);
     }
 
+    @Test
+    public void testCalculateInsets_caption_resizing() {
+        mCaptionSource.setFrame(new Rect(0, 0, 100, 100));
+        Insets insets = mCaptionSource.calculateInsets(new Rect(0, 0, 200, 200), false);
+        assertEquals(Insets.of(0, 100, 0, 0), insets);
+        insets = mCaptionSource.calculateInsets(new Rect(0, 0, 50, 200), false);
+        assertEquals(Insets.of(0, 100, 0, 0), insets);
+        insets = mCaptionSource.calculateInsets(new Rect(100, 100, 200, 500), false);
+        assertEquals(Insets.of(0, 100, 0, 0), insets);
+    }
+
     @Test
     public void testCalculateInsets_invisible() {
         mSource.setFrame(new Rect(0, 0, 500, 100));
diff --git a/core/tests/coretests/src/android/view/InsetsStateTest.java b/core/tests/coretests/src/android/view/InsetsStateTest.java
index b035c23cb98b7..fde1a6d7b04c4 100644
--- a/core/tests/coretests/src/android/view/InsetsStateTest.java
+++ b/core/tests/coretests/src/android/view/InsetsStateTest.java
@@ -247,6 +247,18 @@ public class InsetsStateTest {
         assertEquals(Insets.of(0, 300, 0, 0), visibleInsets);
     }
 
+    @Test
+    public void testCalculateInsets_captionBarOffset() {
+        mState.getOrCreateSource(ID_CAPTION_BAR, captionBar())
+                .setFrame(new Rect(0, 0, 100, 300))
+                .setVisible(true);
+
+        Insets visibleInsets = mState.calculateVisibleInsets(
+                new Rect(0, 0, 150, 400), TYPE_APPLICATION, WINDOWING_MODE_UNDEFINED,
+                SOFT_INPUT_ADJUST_NOTHING, 0 /* windowFlags */);
+        assertEquals(Insets.of(0, 300, 0, 0), visibleInsets);
+    }
+
     @Test
     public void testCalculateInsets_extraNavRightStatusTop() {
         mState.getOrCreateSource(ID_STATUS_BAR, statusBars())
diff --git a/services/core/java/com/android/server/wm/InsetsPolicy.java b/services/core/java/com/android/server/wm/InsetsPolicy.java
index 25ce5699ab71c..210a7d9538c78 100644
--- a/services/core/java/com/android/server/wm/InsetsPolicy.java
+++ b/services/core/java/com/android/server/wm/InsetsPolicy.java
@@ -344,6 +344,19 @@ class InsetsPolicy {
             }
         }
 
+        if (!attrs.isFullscreen() || attrs.getFitInsetsTypes() != 0) {
+            if (state == originalState) {
+                state = new InsetsState(originalState);
+            }
+            // Explicitly exclude floating windows from receiving caption insets. This is because we
+            // hard code caption insets for windows due to a synchronization issue that leads to
+            // flickering that bypasses insets frame calculation, which consequently needs us to
+            // remove caption insets from floating windows.
+            // TODO(b/254128050): Remove this workaround after we find a way to update window frames
+            //  and caption insets frames simultaneously.
+            state.removeSource(InsetsState.ITYPE_CAPTION_BAR);
+        }
+
         final SparseArray<WindowContainerInsetsSourceProvider> providers =
                 mStateController.getSourceProviders();
         final int windowType = attrs.type;