diff --git a/package.json b/package.json
index b524b112d..556b3a0dd 100644
--- a/package.json
+++ b/package.json
@@ -43,7 +43,7 @@
   ],
   "dependencies": {
     "@jsforce/jsforce-node": "^3.10.16",
-    "@salesforce/core": "^8.31.1",
+    "@salesforce/core": "^8.31.2",
     "@salesforce/kit": "^3.2.6",
     "@salesforce/schemas": "^1.10.3",
     "@salesforce/source-deploy-retrieve": "^12.36.2",
diff --git a/src/package/packageProfileApi.ts b/src/package/packageProfileApi.ts
index 443696a43..5d0a2cf2b 100644
--- a/src/package/packageProfileApi.ts
+++ b/src/package/packageProfileApi.ts
@@ -123,7 +123,10 @@ export class PackageProfileApi extends AsyncCreatable<ProfileApiOptions> {
 
   // Look for profiles in all package directories
   private findAllProfiles(excludedDirectories: string[] = []): string[] {
-    const ignore = excludedDirectories.map((dir) => `**/${dir.split(path.sep).join(path.posix.sep)}/**`);
+    const ignore = excludedDirectories.map((dir) => {
+      const normalized = path.normalize(dir).split(path.sep).filter(Boolean).join(path.posix.sep);
+      return `**/${normalized}/**`;
+    });
     const patterns = this.project
       .getUniquePackageDirectories()
       .map((pDir) => pDir.fullPath)
diff --git a/src/package/packageVersionCreate.ts b/src/package/packageVersionCreate.ts
index bb29cc64e..a13a5d98b 100644
--- a/src/package/packageVersionCreate.ts
+++ b/src/package/packageVersionCreate.ts
@@ -587,9 +587,10 @@ export class PackageVersionCreate {
       profileExcludeDirs
     );
 
+    const excludedProfileNames = excludedProfiles?.map((p) => path.basename(p));
     packageXmlAsJson.types = typesArr.map((type) => {
       if (type.name !== 'Profile') return type;
-      return { ...type, members: type.members.filter((m) => !excludedProfiles?.includes(m)) };
+      return { ...type, members: type.members.filter((m) => !excludedProfileNames?.includes(m)) };
     });
 
     const xml = packageXmlJsonToXmlString(packageXmlAsJson);
diff --git a/test/package/packageVersionCreate.test.ts b/test/package/packageVersionCreate.test.ts
index 6e221bd9e..ca7008d61 100644
--- a/test/package/packageVersionCreate.test.ts
+++ b/test/package/packageVersionCreate.test.ts
@@ -836,6 +836,66 @@ describe('Package Version Create', () => {
     expect(pkgTypeMembers[1].members).to.deep.equal(['Test Profile']);
   });
 
+  it('should include profiles from all package directories when scopeProfiles is false', async () => {
+    project.getSfProjectJson().set('packageDirectories', [
+      { path: './src-access-management', package: 'ACCESS', versionName: 'ver 0.1', versionNumber: '0.1.0.NEXT' },
+      { path: 'force-app', package: 'TEST', versionName: 'ver 0.1', versionNumber: '0.1.0.NEXT', default: true },
+    ]);
+    await project.getSfProjectJson().write();
+
+    const siblingDir = path.join(project.getPath(), 'src-access-management');
+    await fs.promises.mkdir(siblingDir, { recursive: true });
+    const fileContents = '<?xml version="1.0" encoding="UTF-8"?>';
+    await fs.promises.writeFile(path.join(siblingDir, 'Sibling Profile.profile-meta.xml'), fileContents);
+    await fs.promises.writeFile(
+      path.join(project.getPath(), 'force-app', 'Target Profile.profile-meta.xml'),
+      fileContents
+    );
+
+    const pkgProfileApi = await PackageProfileApi.create({ project, includeUserLicenses: false });
+    const types = [
+      { name: 'Layout', members: ['Test Layout'] },
+      { name: 'Profile', members: ['Sibling Profile', 'Target Profile'] },
+    ];
+
+    // With no excludedDirectories (scopeProfiles=false), all profiles from all dirs are included
+    const pkgTypeMembers = pkgProfileApi.filterAndGenerateProfilesForManifest(types);
+    expect(pkgTypeMembers.find((t) => t.name === 'Profile')?.members).to.deep.equal([
+      'Sibling Profile',
+      'Target Profile',
+    ]);
+  });
+
+  it('should exclude profiles from ./-prefixed sibling package directories when scopeProfiles is true', async () => {
+    // Configure a multi-directory project where sibling uses ./ prefix in path
+    project.getSfProjectJson().set('packageDirectories', [
+      { path: './src-access-management', package: 'ACCESS', versionName: 'ver 0.1', versionNumber: '0.1.0.NEXT' },
+      { path: 'force-app', package: 'TEST', versionName: 'ver 0.1', versionNumber: '0.1.0.NEXT', default: true },
+    ]);
+    await project.getSfProjectJson().write();
+
+    const siblingDir = path.join(project.getPath(), 'src-access-management');
+    await fs.promises.mkdir(siblingDir, { recursive: true });
+    const fileContents = '<?xml version="1.0" encoding="UTF-8"?>';
+    await fs.promises.writeFile(path.join(siblingDir, 'Sibling Profile.profile-meta.xml'), fileContents);
+    await fs.promises.writeFile(
+      path.join(project.getPath(), 'force-app', 'Target Profile.profile-meta.xml'),
+      fileContents
+    );
+
+    const pkgProfileApi = await PackageProfileApi.create({ project, includeUserLicenses: false });
+    const types = [
+      { name: 'Layout', members: ['Test Layout'] },
+      { name: 'Profile', members: ['Sibling Profile', 'Target Profile'] },
+    ];
+
+    // When scopeProfiles is true, packageVersionCreate passes sibling package dir paths
+    // as excludedDirectories. These retain the ./ prefix from sfdx-project.json.
+    const excludedDirectories = ['./src-access-management'];
+    const pkgTypeMembers = pkgProfileApi.filterAndGenerateProfilesForManifest(types, excludedDirectories);
+    expect(pkgTypeMembers.find((t) => t.name === 'Profile')?.members).to.deep.equal(['Target Profile']);
+  });
+
   describe('validateAncestorId', () => {
     it('should throw if the explicitUseNoAncestor is true and highestReleasedVersion is not undefined', () => {
       const ancestorId = 'ancestorId';
diff --git a/yarn.lock b/yarn.lock
index 0452a707b..c55cf3bf1 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -551,7 +551,7 @@
     strip-ansi "6.0.1"
     ts-retry-promise "^0.8.1"
 
-"@salesforce/core@^8.23.1", "@salesforce/core@^8.30.3", "@salesforce/core@^8.31.0", "@salesforce/core@^8.31.1":
+"@salesforce/core@^8.23.1", "@salesforce/core@^8.30.3", "@salesforce/core@^8.31.0":
   version "8.31.1"
   resolved "https://registry.yarnpkg.com/@salesforce/core/-/core-8.31.1.tgz#a0057e46568b5aeb6d838c461d7c98105ec11dc2"
   integrity sha512-dnBfLI0v/Ucsh/QrpYPGeo39qsvvglWMRSifx1lmAwLc9QAnL3Hhp9zUxJyX5icD9jj1uMftsAtIOGyjC2+KXA==
@@ -576,6 +576,31 @@
     ts-retry-promise "^0.8.1"
     zod "^4.1.12"
 
+"@salesforce/core@^8.31.2":
+  version "8.31.2"
+  resolved "https://registry.yarnpkg.com/@salesforce/core/-/core-8.31.2.tgz#968448f423b553f726f42c27da6b55c4ec7eb93a"
+  integrity sha512-naqnq7Z+gbl1LdnyNvrGrNUoeMUQtCOsnrS6DfqeuLMJTFqcL9Dq0/od+xcuqi0+l7HTyH0/gU1BQitWpd1rag==
+  dependencies:
+    "@jsforce/jsforce-node" "^3.10.13"
+    "@salesforce/kit" "^3.2.4"
+    "@salesforce/ts-types" "^2.0.12"
+    ajv "^8.18.0"
+    change-case "^4.1.2"
+    fast-levenshtein "^3.0.0"
+    faye "^1.4.1"
+    form-data "^4.0.5"
+    js2xmlparser "^4.0.1"
+    jsonwebtoken "9.0.3"
+    jszip "3.10.1"
+    memfs "4.38.1"
+    pino "^9.7.0"
+    pino-abstract-transport "^1.2.0"
+    pino-pretty "^11.3.0"
+    proper-lockfile "^4.1.2"
+    semver "^7.8.0"
+    ts-retry-promise "^0.8.1"
+    zod "^4.1.12"
+
 "@salesforce/dev-config@^4.3.1":
   version "4.3.2"
   resolved "https://registry.yarnpkg.com/@salesforce/dev-config/-/dev-config-4.3.2.tgz#10047e2b8d289c93f157ab4243a1b1de57f2d6a2"