diff --git a/.yarn/versions/0d12a741.yml b/.yarn/versions/0d12a741.yml
new file mode 100644
index 000000000000..2d6a48f178d8
--- /dev/null
+++ b/.yarn/versions/0d12a741.yml
@@ -0,0 +1,34 @@
+releases:
+  "@yarnpkg/cli": patch
+  "@yarnpkg/core": patch
+
+declined:
+  - "@yarnpkg/plugin-compat"
+  - "@yarnpkg/plugin-constraints"
+  - "@yarnpkg/plugin-dlx"
+  - "@yarnpkg/plugin-essentials"
+  - "@yarnpkg/plugin-exec"
+  - "@yarnpkg/plugin-file"
+  - "@yarnpkg/plugin-git"
+  - "@yarnpkg/plugin-github"
+  - "@yarnpkg/plugin-http"
+  - "@yarnpkg/plugin-init"
+  - "@yarnpkg/plugin-interactive-tools"
+  - "@yarnpkg/plugin-link"
+  - "@yarnpkg/plugin-nm"
+  - "@yarnpkg/plugin-npm"
+  - "@yarnpkg/plugin-npm-cli"
+  - "@yarnpkg/plugin-pack"
+  - "@yarnpkg/plugin-patch"
+  - "@yarnpkg/plugin-pnp"
+  - "@yarnpkg/plugin-pnpm"
+  - "@yarnpkg/plugin-stage"
+  - "@yarnpkg/plugin-typescript"
+  - "@yarnpkg/plugin-version"
+  - "@yarnpkg/plugin-workspace-tools"
+  - "@yarnpkg/builder"
+  - "@yarnpkg/doctor"
+  - "@yarnpkg/extensions"
+  - "@yarnpkg/nm"
+  - "@yarnpkg/pnpify"
+  - "@yarnpkg/sdks"
diff --git a/packages/acceptance-tests/pkg-tests-specs/sources/dragon.test.js b/packages/acceptance-tests/pkg-tests-specs/sources/dragon.test.js
index c749b8ce4a60..beb74f281ef0 100644
--- a/packages/acceptance-tests/pkg-tests-specs/sources/dragon.test.js
+++ b/packages/acceptance-tests/pkg-tests-specs/sources/dragon.test.js
@@ -682,4 +682,48 @@ describe(`Dragon tests`, () => {
       },
     ),
   );
+
+  test(
+    `it should pass the dragon test 13`,
+    makeTemporaryEnv(
+      {
+        workspaces: [
+          `pkg-a`,
+          `pkg-b`,
+        ],
+      },
+      async ({path, run, source}) => {
+        // This dragon test represents the following scenario:
+        //
+        // .
+        // ├── pkg-a/
+        // │   └── no-deps-failing (optional)
+        // └── pkg-b/
+        //     └── no-deps-failing (not optional)
+        //
+        // Depending on the order of traversal we may end up marking no-deps-failing
+        // as being traversed, and skip all future traversals. If we're not being
+        // careful this may cause setting the "not optional" flag to be skipped as
+        // well, making Yarn believe that no-deps-failing is optional when it's not.
+
+        await xfs.mkdirPromise(`${path}/pkg-a`);
+        await xfs.writeJsonPromise(`${path}/pkg-a/package.json`, {
+          name: `pkg-a`,
+          optionalDependencies: {
+            [`no-deps-failing`]: `1.0.0`,
+          },
+        });
+
+        await xfs.mkdirPromise(`${path}/pkg-b`);
+        await xfs.writeJsonPromise(`${path}/pkg-b/package.json`, {
+          name: `pkg-b`,
+          dependencies: {
+            [`no-deps-failing`]: `1.0.0`,
+          },
+        });
+
+        await expect(run(`install`)).rejects.toThrowError(`no-deps-failing@npm:1.0.0 couldn't be built successfully`);
+      },
+    ),
+  );
 });
diff --git a/packages/yarnpkg-core/sources/Project.ts b/packages/yarnpkg-core/sources/Project.ts
index 57b6fa95ad54..2e07b8690766 100644
--- a/packages/yarnpkg-core/sources/Project.ts
+++ b/packages/yarnpkg-core/sources/Project.ts
@@ -2235,14 +2235,14 @@ function applyVirtualResolutionMutations({
   };
 
   const resolvePeerDependenciesImpl = (parentDescriptor: Descriptor, parentLocator: Locator, peerSlots: Map<IdentHash, LocatorHash>, {top, optional}: {top: LocatorHash, optional: boolean}) => {
+    if (!optional)
+      optionalBuilds.delete(parentLocator.locatorHash);
+
     if (accessibleLocators.has(parentLocator.locatorHash))
       return;
 
     accessibleLocators.add(parentLocator.locatorHash);
 
-    if (!optional)
-      optionalBuilds.delete(parentLocator.locatorHash);
-
     const parentPackage = allPackages.get(parentLocator.locatorHash);
     if (!parentPackage)
       throw new Error(`Assertion failed: The package (${structUtils.prettyLocator(project.configuration, parentLocator)}) should have been registered`);