diff --git a/apps/web/src/components/settings/ProjectSettingsPanel.logic.test.ts b/apps/web/src/components/settings/ProjectSettingsPanel.logic.test.ts
new file mode 100644
index 000000000000..8a72b3510ceb
--- /dev/null
+++ b/apps/web/src/components/settings/ProjectSettingsPanel.logic.test.ts
@@ -0,0 +1,23 @@
+import { describe, expect, it } from "vite-plus/test";
+
+import { projectGroupTitleNeedsUpdate } from "./ProjectSettingsPanel.logic";
+
+describe("projectGroupTitleNeedsUpdate", () => {
+  it("updates divergent member titles even when the next title is the derived group label", () => {
+    expect(
+      projectGroupTitleNeedsUpdate(["local-title", "remote-title"], "Repository name", true),
+    ).toBe(true);
+  });
+
+  it("skips an untouched blur when the derived label differs from member titles", () => {
+    expect(projectGroupTitleNeedsUpdate(["repo-slug", "repo-slug"], "Repository Name", false)).toBe(
+      false,
+    );
+  });
+
+  it("skips an update when every member already has the next title", () => {
+    expect(projectGroupTitleNeedsUpdate(["Shared name", "Shared name"], "Shared name", true)).toBe(
+      false,
+    );
+  });
+});
diff --git a/apps/web/src/components/settings/ProjectSettingsPanel.logic.ts b/apps/web/src/components/settings/ProjectSettingsPanel.logic.ts
new file mode 100644
index 000000000000..17ff824099fb
--- /dev/null
+++ b/apps/web/src/components/settings/ProjectSettingsPanel.logic.ts
@@ -0,0 +1,7 @@
+export function projectGroupTitleNeedsUpdate(
+  memberTitles: ReadonlyArray<string>,
+  nextTitle: string,
+  wasEdited: boolean,
+): boolean {
+  return wasEdited && memberTitles.some((title) => title !== nextTitle);
+}
diff --git a/apps/web/src/components/settings/ProjectSettingsPanel.tsx b/apps/web/src/components/settings/ProjectSettingsPanel.tsx
index 6768d2dc61ef..e5020e5a6352 100644
--- a/apps/web/src/components/settings/ProjectSettingsPanel.tsx
+++ b/apps/web/src/components/settings/ProjectSettingsPanel.tsx
@@ -112,6 +112,7 @@ import {
   canPickExternalProjectFavicon,
   ProjectFaviconPickerDialog,
 } from "./ProjectFaviconPickerDialog";
+import { projectGroupTitleNeedsUpdate } from "./ProjectSettingsPanel.logic";
 
 export const PROJECT_GROUPING_MODE_LABELS: Record<SidebarProjectGroupingMode, string> = {
   repository: "Group by repository",
@@ -303,6 +304,7 @@ function ProjectDetail({ group }: { group: SidebarProjectSnapshot }) {
   const removeKeybinding = useAtomCommand(serverEnvironment.removeKeybinding, {
     reportFailure: false,
   });
+  const projectNameEditedRef = useRef(false);
   const { copyToClipboard: copyPathToClipboard } = useCopyToClipboard<{ path: string }>({
     onCopy: ({ path }) => {
       toastManager.add({ type: "success", title: "Path copied", description: path });
@@ -391,17 +393,24 @@ function ProjectDetail({ group }: { group: SidebarProjectSnapshot }) {
   );
 
   const renameGroup = useCallback(
-    async (nextTitle: string) => {
+    async (nextTitle: string, wasEdited: boolean) => {
       const title = nextTitle.trim();
       if (!title) {
         toastManager.add({ type: "warning", title: "Project title cannot be empty" });
         return;
       }
-      if (title === group.displayName) return;
-      if (group.memberProjects.every((member) => member.title === title)) return;
+      if (
+        !projectGroupTitleNeedsUpdate(
+          group.memberProjects.map((member) => member.title),
+          title,
+          wasEdited,
+        )
+      ) {
+        return;
+      }
       await updateAllMembers({ title }, "Failed to rename project");
     },
-    [group.displayName, group.memberProjects, updateAllMembers],
+    [group.memberProjects, updateAllMembers],
   );
 
   // ----- default model -----
@@ -765,8 +774,13 @@ function ProjectDetail({ group }: { group: SidebarProjectSnapshot }) {
                 className="w-full sm:w-64"
                 aria-label="Project name"
                 defaultValue={group.displayName}
+                onChange={() => {
+                  projectNameEditedRef.current = true;
+                }}
                 onBlur={(event) => {
-                  void renameGroup(event.currentTarget.value);
+                  const wasEdited = projectNameEditedRef.current;
+                  projectNameEditedRef.current = false;
+                  void renameGroup(event.currentTarget.value, wasEdited);
                 }}
                 onKeyDown={(event) => {
                   if (event.key === "Enter") event.currentTarget.blur();