diff --git a/src/registry/presets/decomposeExternalServiceRegistrationBeta.json b/src/registry/presets/decomposeExternalServiceRegistrationBeta.json
index 577e7f79cf..310af0b9f3 100644
--- a/src/registry/presets/decomposeExternalServiceRegistrationBeta.json
+++ b/src/registry/presets/decomposeExternalServiceRegistrationBeta.json
@@ -11,6 +11,7 @@
             "id": "yaml",
             "isAddressable": false,
             "name": "OAS Yaml Schema",
+            "strictDirectoryName": true,
             "suffix": "yaml",
             "xmlElementName": "schema"
           }
diff --git a/src/resolve/metadataResolver.ts b/src/resolve/metadataResolver.ts
index 036f5b0788..3837140857 100644
--- a/src/resolve/metadataResolver.ts
+++ b/src/resolve/metadataResolver.ts
@@ -357,7 +357,7 @@ const resolveType =
       // It is likely that the metadata file is misspelled or has the wrong suffix.
       // A common occurrence is that a misspelled metadata file will fall back to
       // `EmailServicesFunction` because that is the default for the `.xml` suffix
-      if (resolvedType?.strictDirectoryName === true) {
+      if (resolvedType?.strictDirectoryName === true && !fsPath.split(sep).includes(resolvedType.directoryName)) {
         resolvedType = undefined;
       }
     }
diff --git a/test/resolve/metadataResolver.test.ts b/test/resolve/metadataResolver.test.ts
index 529dd73670..3bc49202cc 100644
--- a/test/resolve/metadataResolver.test.ts
+++ b/test/resolve/metadataResolver.test.ts
@@ -22,12 +22,14 @@ import { createSandbox } from 'sinon';
 import {
   ComponentSet,
   MetadataResolver,
+  presetMap,
   registry,
   RegistryAccess,
   SourceComponent,
   VirtualDirectory,
   VirtualTreeContainer,
 } from '../../src';
+import { getEffectiveRegistry } from '../../src/registry/variants';
 import {
   bundle,
   decomposedtoplevel,
@@ -1044,4 +1046,30 @@ describe('MetadataResolver', () => {
       expect(components[0].name).to.equal('myComponent');
     });
   });
+
+  describe('decomposeExternalServiceRegistrationBeta preset', () => {
+    const esrRegistry = new RegistryAccess(
+      getEffectiveRegistry({ presets: [presetMap.get('decomposeExternalServiceRegistrationBeta')!] })
+    );
+
+    it('should not resolve a .yaml file outside externalServiceRegistrations as ExternalServiceRegistration', () => {
+      const yamlPath = join('force-app', 'main', 'default', 'customMetadata', 'stateTransition', 'transitions.yaml');
+      const tree = VirtualTreeContainer.fromFilePaths([yamlPath]);
+      const resolver = new MetadataResolver(esrRegistry, tree, false);
+
+      expect(() => resolver.getComponentsFromPath(yamlPath)).to.throw('Could not infer a metadata type');
+    });
+
+    it('should resolve a .yaml file inside externalServiceRegistrations as ExternalServiceRegistration', () => {
+      const esrDir = join('force-app', 'main', 'default', 'externalServiceRegistrations');
+      const yamlPath = join(esrDir, 'MyService.yaml');
+      const metaPath = join(esrDir, 'MyService.externalServiceRegistration-meta.xml');
+      const tree = VirtualTreeContainer.fromFilePaths([yamlPath, metaPath]);
+      const resolver = new MetadataResolver(esrRegistry, tree, false);
+
+      const components = resolver.getComponentsFromPath(yamlPath);
+      expect(components).to.have.lengthOf(1);
+      expect(components[0].type.name).to.equal('ExternalServiceRegistration');
+    });
+  });
 });