diff --git a/core/res/res/values/config.xml b/core/res/res/values/config.xml
index 87ba59abdebe8..50aec835cc31b 100644
--- a/core/res/res/values/config.xml
+++ b/core/res/res/values/config.xml
@@ -6415,7 +6415,7 @@
         Packages can be added by OEMs in an allowlist, to prevent them from being scanned as
         "stopped" during initial boot of a device, or after an OTA update. Stopped state of
         an app is not changed during subsequent reboots.  -->
-    <bool name="config_stopSystemPackagesByDefault">false</bool>
+    <bool name="config_stopSystemPackagesByDefault">true</bool>
 
     <!-- Whether to show weather on the lock screen by default. -->
     <bool name="config_lockscreenWeatherEnabledByDefault">false</bool>
diff --git a/services/core/java/com/android/server/pm/InstallPackageHelper.java b/services/core/java/com/android/server/pm/InstallPackageHelper.java
index a267e8afa78d9..5932929a69c4c 100644
--- a/services/core/java/com/android/server/pm/InstallPackageHelper.java
+++ b/services/core/java/com/android/server/pm/InstallPackageHelper.java
@@ -4360,12 +4360,22 @@ final class InstallPackageHelper {
 
         // A new application appeared on /system, and we are seeing it for the first time.
         // Its also not updated as we don't have a copy of it on /data. So, scan it in a
-        // STOPPED state. Ignore if it's an APEX package since stopped state does not affect them.
+        // STOPPED state.
+        // We'll skip this step under the following conditions:
+        //   - It's "android"
+        //   - It's an APEX or overlay package since stopped state does not affect them.
+        //   - It is enumerated with a <initial-package-state> tag having the stopped attribute
+        //     set to false
         final boolean isApexPkg = (scanFlags & SCAN_AS_APEX) != 0;
-        if (mPm.mShouldStopSystemPackagesByDefault && scanSystemPartition
-                && !pkgAlreadyExists && !isApexPkg) {
+        if (mPm.mShouldStopSystemPackagesByDefault
+                && scanSystemPartition
+                && !pkgAlreadyExists
+                && !isApexPkg
+                && !parsedPackage.isOverlayIsStatic()
+        ) {
             String packageName = parsedPackage.getPackageName();
-            if (!mPm.mInitialNonStoppedSystemPackages.contains(packageName)) {
+            if (!mPm.mInitialNonStoppedSystemPackages.contains(packageName)
+                    && !"android".contentEquals(packageName)) {
                 scanFlags |= SCAN_AS_STOPPED_SYSTEM_APP;
             }
         }