diff --git a/plans/objchange/compatible.go b/plans/objchange/compatible.go
index 8b3aeedbf..4f944775a 100644
--- a/plans/objchange/compatible.go
+++ b/plans/objchange/compatible.go
@@ -168,12 +168,6 @@ func assertObjectCompatible(schema *configschema.Block, planned, actual cty.Valu
 				continue
 			}
 
-			setErrs := assertSetValuesCompatible(plannedV, actualV, path, func(plannedEV, actualEV cty.Value) bool {
-				errs := assertObjectCompatible(&blockS.Block, plannedEV, actualEV, append(path, cty.IndexStep{Key: actualEV}))
-				return len(errs) == 0
-			})
-			errs = append(errs, setErrs...)
-
 			if maybeUnknownBlocks {
 				// When unknown blocks are present the final number of blocks
 				// may be different, either because the unknown set values
@@ -184,6 +178,12 @@ func assertObjectCompatible(schema *configschema.Block, planned, actual cty.Valu
 				continue
 			}
 
+			setErrs := assertSetValuesCompatible(plannedV, actualV, path, func(plannedEV, actualEV cty.Value) bool {
+				errs := assertObjectCompatible(&blockS.Block, plannedEV, actualEV, append(path, cty.IndexStep{Key: actualEV}))
+				return len(errs) == 0
+			})
+			errs = append(errs, setErrs...)
+
 			// There can be fewer elements in a set after its elements are all
 			// known (values that turn out to be equal will coalesce) but the
 			// number of elements must never get larger.
diff --git a/plans/objchange/compatible_test.go b/plans/objchange/compatible_test.go
index 473ee5119..4c67e610d 100644
--- a/plans/objchange/compatible_test.go
+++ b/plans/objchange/compatible_test.go
@@ -1163,6 +1163,59 @@ func TestAssertObjectCompatible(t *testing.T) {
 			}),
 			nil,
 		},
+		// test a set with an unknown dynamic count going to 0 values
+		{
+			&configschema.Block{
+				BlockTypes: map[string]*configschema.NestedBlock{
+					"block2": {
+						Nesting: configschema.NestingSet,
+						Block:   schemaWithFoo,
+					},
+				},
+			},
+			cty.ObjectVal(map[string]cty.Value{
+				"block2": cty.SetVal([]cty.Value{
+					cty.ObjectVal(map[string]cty.Value{
+						"foo": cty.UnknownVal(cty.String),
+					}),
+				}),
+			}),
+			cty.ObjectVal(map[string]cty.Value{
+				"block2": cty.SetValEmpty(cty.Object(map[string]cty.Type{
+					"foo": cty.String,
+				})),
+			}),
+			nil,
+		},
+		// test a set with a patially known dynamic count reducing it's values
+		{
+			&configschema.Block{
+				BlockTypes: map[string]*configschema.NestedBlock{
+					"block3": {
+						Nesting: configschema.NestingSet,
+						Block:   schemaWithFoo,
+					},
+				},
+			},
+			cty.ObjectVal(map[string]cty.Value{
+				"block3": cty.SetVal([]cty.Value{
+					cty.ObjectVal(map[string]cty.Value{
+						"foo": cty.StringVal("a"),
+					}),
+					cty.ObjectVal(map[string]cty.Value{
+						"foo": cty.UnknownVal(cty.String),
+					}),
+				}),
+			}),
+			cty.ObjectVal(map[string]cty.Value{
+				"block3": cty.SetVal([]cty.Value{
+					cty.ObjectVal(map[string]cty.Value{
+						"foo": cty.StringVal("a"),
+					}),
+				}),
+			}),
+			nil,
+		},
 		{
 			&configschema.Block{
 				BlockTypes: map[string]*configschema.NestedBlock{