diff --git a/services/core/java/com/android/server/wm/ActivityRecord.java b/services/core/java/com/android/server/wm/ActivityRecord.java
index d4df2f258a047..9c43dd3941240 100644
--- a/services/core/java/com/android/server/wm/ActivityRecord.java
+++ b/services/core/java/com/android/server/wm/ActivityRecord.java
@@ -7729,13 +7729,20 @@ final class ActivityRecord extends WindowToken implements WindowManagerService.A
             return false;
         }
 
-        // Compute configuration based on max supported width and height.
-        // Also account for the left / top insets (e.g. from display cutouts), which will be clipped
-        // away later in {@link Task#computeConfigResourceOverrides()}. Otherwise, the app
-        // bounds would end up too small.
-        outBounds.set(containingBounds.left, containingBounds.top,
-                activityWidth + containingAppBounds.left,
-                activityHeight + containingAppBounds.top);
+        // Compute configuration based on max or min supported width and height.
+        // Also account for the insets (e.g. display cutouts, navigation bar), which will be
+        // clipped away later in {@link Task#computeConfigResourceOverrides()}, i.e., the out
+        // bounds are the app bounds restricted by aspect ratio + clippable insets. Otherwise,
+        // the app bounds would end up too small.
+        int right = activityWidth + containingAppBounds.left;
+        if (right >= containingAppBounds.right) {
+            right += containingBounds.right - containingAppBounds.right;
+        }
+        int bottom = activityHeight + containingAppBounds.top;
+        if (bottom >= containingAppBounds.bottom) {
+            bottom += containingBounds.bottom - containingAppBounds.bottom;
+        }
+        outBounds.set(containingBounds.left, containingBounds.top, right, bottom);
 
         return true;
     }
diff --git a/services/tests/wmtests/src/com/android/server/wm/SizeCompatTests.java b/services/tests/wmtests/src/com/android/server/wm/SizeCompatTests.java
index 1827730e99aa9..db7e43757f53d 100644
--- a/services/tests/wmtests/src/com/android/server/wm/SizeCompatTests.java
+++ b/services/tests/wmtests/src/com/android/server/wm/SizeCompatTests.java
@@ -982,7 +982,9 @@ public class SizeCompatTests extends WindowTestsBase {
     @EnableCompatChanges({ActivityInfo.OVERRIDE_MIN_ASPECT_RATIO,
             ActivityInfo.OVERRIDE_MIN_ASPECT_RATIO_MEDIUM})
     public void testOverrideMinAspectRatioLowerThanManifest() {
-        setUpDisplaySizeWithApp(1400, 1600);
+        final DisplayContent display = new TestDisplayContent.Builder(mAtm, 1400, 1800)
+                .setNotch(200).setSystemDecorations(true).build();
+        mTask = new TaskBuilder(mSupervisor).setDisplay(display).build();
 
         // Create a size compat activity on the same task.
         final ActivityRecord activity = new ActivityBuilder(mAtm)
@@ -996,8 +998,13 @@ public class SizeCompatTests extends WindowTestsBase {
 
         // The per-package override should have no effect, because the manifest aspect ratio is
         // larger (2:1)
-        assertEquals(1600, activity.getBounds().height());
-        assertEquals(800, activity.getBounds().width());
+        final Rect appBounds = activity.getWindowConfiguration().getAppBounds();
+        assertEquals("App bounds must have min aspect ratio", 2f,
+                (float) appBounds.height() / appBounds.width(), 0.0001f /* delta */);
+        assertEquals("Long side must fit task",
+                mTask.getWindowConfiguration().getAppBounds().height(), appBounds.height());
+        assertEquals("Bounds can include insets", mTask.getBounds().height(),
+                activity.getBounds().height());
     }
 
     @Test