diff --git a/changelog/fix_fix_styleclassandmodulechildren_false.md b/changelog/fix_fix_styleclassandmodulechildren_false.md
new file mode 100644
index 00000000000..dae20dd748d
--- /dev/null
+++ b/changelog/fix_fix_styleclassandmodulechildren_false.md
@@ -0,0 +1 @@
+* [#9761](https://github.com/rubocop/rubocop/issues/9761): Fix `Style/ClassAndModuleChildren` false negative for `compact` style when a class/module is partially nested. ([@dvandersluis][])
diff --git a/lib/rubocop/cop/style/class_and_module_children.rb b/lib/rubocop/cop/style/class_and_module_children.rb
index 16b26c1cf63..1a03cf43478 100644
--- a/lib/rubocop/cop/style/class_and_module_children.rb
+++ b/lib/rubocop/cop/style/class_and_module_children.rb
@@ -132,7 +132,7 @@ def check_nested_style(node)
         end
 
         def check_compact_style(node, body)
-          return unless one_child?(body) && !compact_node_name?(node)
+          return unless needs_compacting?(body)
 
           add_offense(node.loc.name, message: COMPACT_MSG) do |corrector|
             autocorrect(corrector, node)
@@ -145,12 +145,12 @@ def autocorrect(corrector, node)
           nest_or_compact(corrector, node)
         end
 
-        def one_child?(body)
+        def needs_compacting?(body)
           body && %i[module class].include?(body.type)
         end
 
         def compact_node_name?(node)
-          /::/.match?(node.loc.name.source)
+          /::/.match?(node.identifier.source)
         end
       end
     end
diff --git a/spec/rubocop/cop/style/class_and_module_children_spec.rb b/spec/rubocop/cop/style/class_and_module_children_spec.rb
index f1f6b129deb..f3b1312ad3a 100644
--- a/spec/rubocop/cop/style/class_and_module_children_spec.rb
+++ b/spec/rubocop/cop/style/class_and_module_children_spec.rb
@@ -91,6 +91,44 @@ module BarModule
       RUBY
     end
 
+    it 'registers an offense for partially nested classes' do
+      expect_offense(<<~RUBY)
+        class Foo::Bar
+              ^^^^^^^^ Use nested module/class definitions instead of compact style.
+          class Baz
+          end
+        end
+      RUBY
+
+      expect_correction(<<~RUBY)
+        module Foo
+          class Bar
+          class Baz
+          end
+          end
+        end
+      RUBY
+    end
+
+    it 'registers an offense for partially nested modules' do
+      expect_offense(<<~RUBY)
+        module Foo::Bar
+               ^^^^^^^^ Use nested module/class definitions instead of compact style.
+          module Baz
+          end
+        end
+      RUBY
+
+      expect_correction(<<~RUBY)
+        module Foo
+          module Bar
+          module Baz
+          end
+          end
+        end
+      RUBY
+    end
+
     it 'accepts nested children' do
       expect_no_offenses(<<~RUBY)
         class FooClass
@@ -165,6 +203,54 @@ module FooModule::BarModule
       RUBY
     end
 
+    it 'registers an offense for classes with partially nested children' do
+      expect_offense(<<~RUBY)
+        class Foo::Bar
+              ^^^^^^^^ Use compact module/class definition instead of nested style.
+          class Baz
+          end
+        end
+
+        class Foo
+              ^^^ Use compact module/class definition instead of nested style.
+          class Bar::Baz
+          end
+        end
+      RUBY
+
+      expect_correction(<<~RUBY)
+        class Foo::Bar::Baz
+        end
+
+        class Foo::Bar::Baz
+        end
+      RUBY
+    end
+
+    it 'registers an offense for modules with partially nested children' do
+      expect_offense(<<~RUBY)
+        module Foo::Bar
+               ^^^^^^^^ Use compact module/class definition instead of nested style.
+          module Baz
+          end
+        end
+
+        module Foo
+               ^^^ Use compact module/class definition instead of nested style.
+          module Bar::Baz
+          end
+        end
+      RUBY
+
+      expect_correction(<<~RUBY)
+        module Foo::Bar::Baz
+        end
+
+        module Foo::Bar::Baz
+        end
+      RUBY
+    end
+
     it 'accepts compact style for classes/modules' do
       expect_no_offenses(<<~RUBY)
         class FooClass::BarClass