diff --git a/src/module/item/base/sheet/rule-element-form/base.ts b/src/module/item/base/sheet/rule-element-form/base.ts
index 6f5dd43db72..bf0970c0a7a 100644
--- a/src/module/item/base/sheet/rule-element-form/base.ts
+++ b/src/module/item/base/sheet/rule-element-form/base.ts
@@ -139,7 +139,14 @@ class RuleElementForm<
             form: await this.#getFormHelpers(mergedRule),
             autogenerate,
             rootId: this.sheet.id,
-            hiddenFields: ["ignored", "requiresEquipped", "requiresInvestment", "removeUponCreate", "battleForm"],
+            hiddenFields: [
+                "ignored",
+                "requiresEquipped",
+                "requiresInvestment",
+                "removeUponCreate",
+                "battleForm",
+                "overrideAppliesFacesUpgrade",
+            ],
             omittedFields: ["key", "priority", "spinoff"],
             validationFailures,
         };
diff --git a/src/module/rules/rule-element/item-alteration/alteration.ts b/src/module/rules/rule-element/item-alteration/alteration.ts
index 6bbb4c60427..6ffee38049d 100644
--- a/src/module/rules/rule-element/item-alteration/alteration.ts
+++ b/src/module/rules/rule-element/item-alteration/alteration.ts
@@ -55,6 +55,13 @@ class ItemAlteration extends foundry.abstract.DataModel<RuleElement, ItemAlterat
                 mode: this.mode,
                 itemType: item.type,
                 value: (this.value = this.parent.resolveValue(this.value, fallbackValue)),
+                ...(this.property === "damage-dice-faces"
+                    ? {
+                          overrideAppliesFacesUpgrade:
+                              (this.parent as RuleElement & { overrideAppliesFacesUpgrade?: boolean })
+                                  .overrideAppliesFacesUpgrade ?? true,
+                      }
+                    : {}),
             },
         });
     }
diff --git a/src/module/rules/rule-element/item-alteration/handlers.ts b/src/module/rules/rule-element/item-alteration/handlers.ts
index bfd2674380d..f39749cb884 100644
--- a/src/module/rules/rule-element/item-alteration/handlers.ts
+++ b/src/module/rules/rule-element/item-alteration/handlers.ts
@@ -312,6 +312,11 @@ const ITEM_ALTERATION_HANDLERS = {
                 choices: () => DAMAGE_DICE_FACES,
                 initial: null,
             } as const),
+            overrideAppliesFacesUpgrade: new fields.BooleanField({
+                required: false,
+                nullable: false,
+                initial: true,
+            }),
         },
         validate: (data) => {
             const hasBasicStructure = R.isPlainObject(data) && "mode" in data && "value" in data;
@@ -342,14 +347,18 @@ const ITEM_ALTERATION_HANDLERS = {
 
             const item = data.item;
             const mode = data.alteration.mode;
-            if (!item.system.damage.die) return;
-            if (mode === "upgrade" && !item.flags[SYSTEM_ID].damageFacesUpgraded) {
-                item.system.damage.die = nextDamageDieSize({ upgrade: item.system.damage.die });
+            const die = item.system.damage.die;
+            if (mode === "upgrade" && !item.flags[SYSTEM_ID].damageFacesUpgraded && die) {
+                item.system.damage.die = nextDamageDieSize({ upgrade: die });
                 item.flags[SYSTEM_ID].damageFacesUpgraded = true;
-            } else if (mode === "downgrade") {
-                item.system.damage.die = nextDamageDieSize({ downgrade: item.system.damage.die });
+            } else if (mode === "downgrade" && die) {
+                item.system.damage.die = nextDamageDieSize({ downgrade: die });
             } else if (mode === "override" && typeof data.alteration.value === "number") {
-                if (data.alteration.value > Number(item.system.damage.die.replace("d", ""))) {
+                if (
+                    data.alteration.overrideAppliesFacesUpgrade &&
+                    die &&
+                    data.alteration.value > Number(die.replace("d", ""))
+                ) {
                     item.flags[SYSTEM_ID].damageFacesUpgraded = true;
                 }
                 item.system.damage.die = `d${data.alteration.value}`;
diff --git a/src/module/rules/rule-element/item-alteration/rule-element.ts b/src/module/rules/rule-element/item-alteration/rule-element.ts
index ea206e3321c..7ac6156a16a 100644
--- a/src/module/rules/rule-element/item-alteration/rule-element.ts
+++ b/src/module/rules/rule-element/item-alteration/rule-element.ts
@@ -45,6 +45,8 @@ class ItemAlterationRuleElement extends RuleElement<ItemAlterationRuleSchema> {
                 initial: undefined,
             }),
             battleForm: new fields.BooleanField(),
+            /** When false, a damage-die override to a larger size does not set `damageFacesUpgraded` */
+            overrideAppliesFacesUpgrade: new fields.BooleanField({ initial: true }),
             ...ItemAlteration.defineSchema(),
         };
     }
@@ -58,7 +60,7 @@ class ItemAlterationRuleElement extends RuleElement<ItemAlterationRuleSchema> {
     }
 
     /** Alteration properties that should be processed at the end of data preparation */
-    static #DELAYED_PROPERTIES = ["pd-recovery-dc"];
+    static #DELAYED_PROPERTIES = ["damage-dice-faces", "pd-recovery-dc"];
 
     /** Alteration properties that should only be processed when requested directly */
     static #LAZY_PROPERTIES = ["description"];
@@ -197,6 +199,8 @@ type ItemAlterationRuleSchema = RuleElementSchema &
         itemId: fields.StringField<string, string, false, false, false>;
         /** Whether this rule element is compatible with battle forms */
         battleForm: fields.BooleanField;
+        /** If true (default), `damage-dice-faces` override to a larger die sets `damageFacesUpgraded` */
+        overrideAppliesFacesUpgrade: fields.BooleanField;
     };
 
 interface ApplyAlterationOptions {