diff --git a/core/deployment/src/main/java/io/quarkus/deployment/dev/RuntimeUpdatesProcessor.java b/core/deployment/src/main/java/io/quarkus/deployment/dev/RuntimeUpdatesProcessor.java
index 0a92c1909a8fe..24a1c175a3059 100644
--- a/core/deployment/src/main/java/io/quarkus/deployment/dev/RuntimeUpdatesProcessor.java
+++ b/core/deployment/src/main/java/io/quarkus/deployment/dev/RuntimeUpdatesProcessor.java
@@ -1128,7 +1128,9 @@ private RuntimeUpdatesProcessor setWatchedFilePathsInternal(Map<String, Boolean>
                     // First find all matching paths from all roots
                     try (final Stream<Path> walk = Files.walk(root)) {
                         walk.forEach(path -> {
-                            if (path.equals(root)) {
+                            if (path.equals(root)
+                                    // Never watch directories
+                                    || Files.isDirectory(path)) {
                                 return;
                             }
                             // Use the relative path to match the watched file
diff --git a/extensions/qute/deployment/src/test/java/io/quarkus/qute/deployment/devmode/NoRestartRoute.java b/extensions/qute/deployment/src/test/java/io/quarkus/qute/deployment/devmode/NoRestartRoute.java
index 454868cd93d71..43f088655cfda 100644
--- a/extensions/qute/deployment/src/test/java/io/quarkus/qute/deployment/devmode/NoRestartRoute.java
+++ b/extensions/qute/deployment/src/test/java/io/quarkus/qute/deployment/devmode/NoRestartRoute.java
@@ -6,6 +6,7 @@
 import jakarta.inject.Inject;
 import jakarta.inject.Singleton;
 
+import io.quarkus.qute.Location;
 import io.quarkus.qute.Template;
 import io.quarkus.vertx.web.Route;
 import io.vertx.ext.web.RoutingContext;
@@ -15,12 +16,20 @@ public class NoRestartRoute {
 
     private String id;
 
-    @Inject
+    @Location("foo/norestart")
     Template norestart;
 
+    @Inject
+    Template bar;
+
     @Route(path = "norestart")
     public void test(RoutingContext ctx) {
-        ctx.end(norestart.data("foo", id).render());
+        ctx.end(norestart.data("id", id).render());
+    }
+
+    @Route(path = "bar")
+    public void testBar(RoutingContext ctx) {
+        ctx.end(bar.data("id", id).render());
     }
 
     @PostConstruct
diff --git a/extensions/qute/deployment/src/test/java/io/quarkus/qute/deployment/devmode/NoRestartTemplatesDevModeTest.java b/extensions/qute/deployment/src/test/java/io/quarkus/qute/deployment/devmode/NoRestartTemplatesDevModeTest.java
index c7d9dca8e6717..5636fa2b77782 100644
--- a/extensions/qute/deployment/src/test/java/io/quarkus/qute/deployment/devmode/NoRestartTemplatesDevModeTest.java
+++ b/extensions/qute/deployment/src/test/java/io/quarkus/qute/deployment/devmode/NoRestartTemplatesDevModeTest.java
@@ -18,10 +18,13 @@ public class NoRestartTemplatesDevModeTest {
             .withApplicationRoot(root -> root
                     .addClass(NoRestartRoute.class)
                     .addAsResource(new StringAsset(
-                            "Hello {foo}!"),
-                            "templates/norestart.html")
+                            "Hello {id}!"),
+                            "templates/foo/norestart.html")
                     .addAsResource(new StringAsset(
-                            "quarkus.qute.dev-mode.no-restart-templates=templates/norestart.html"),
+                            "Hi {id}!"),
+                            "templates/bar.html")
+                    .addAsResource(new StringAsset(
+                            "quarkus.qute.dev-mode.no-restart-templates=templates/.+"),
                             "application.properties"));
 
     @Test
@@ -29,14 +32,25 @@ public void testNoRestartTemplates() {
         Response resp = given().get("norestart");
         resp.then()
                 .statusCode(200);
-        String val = resp.getBody().asString();
-        assertTrue(val.startsWith("Hello "));
+        String val1 = resp.getBody().asString();
+        assertTrue(val1.startsWith("Hello "));
+
+        resp = given().get("bar");
+        resp.then()
+                .statusCode(200);
+        String val2 = resp.getBody().asString();
+        assertTrue(val2.startsWith("Hi "));
 
-        config.modifyResourceFile("templates/norestart.html", t -> t.concat("!!"));
+        config.modifyResourceFile("templates/foo/norestart.html", t -> t.concat("!!"));
+        config.modifyResourceFile("templates/bar.html", t -> t.concat("!!"));
 
         resp = given().get("norestart");
         resp.then().statusCode(200);
-        assertEquals(val + "!!", resp.getBody().asString());
+        assertEquals(val1 + "!!", resp.getBody().asString());
+
+        resp = given().get("bar");
+        resp.then().statusCode(200);
+        assertEquals(val2 + "!!", resp.getBody().asString());
     }
 
 }
diff --git a/extensions/qute/runtime/src/main/java/io/quarkus/qute/runtime/QuteDevModeConfig.java b/extensions/qute/runtime/src/main/java/io/quarkus/qute/runtime/QuteDevModeConfig.java
index be0787fc88113..843a08b3eadcf 100644
--- a/extensions/qute/runtime/src/main/java/io/quarkus/qute/runtime/QuteDevModeConfig.java
+++ b/extensions/qute/runtime/src/main/java/io/quarkus/qute/runtime/QuteDevModeConfig.java
@@ -15,8 +15,8 @@ public class QuteDevModeConfig {
      * This regular expression can be used to specify the templates for which the application is not restarted.
      * I.e. the templates are reloaded and only runtime validations are performed.
      * <p>
-     * The matched input is the template path relative from the {@code templates} directory and the
-     * {@code /} is used as a path separator. For example, {@code templates/foo.html}.
+     * The matched input is the template path that starts with a template root, and the {@code /} is used as a path separator.
+     * For example, {@code templates/foo.html}.
      */
     @ConfigItem
     public Optional<Pattern> noRestartTemplates;