diff --git a/src/createInstance.ts b/src/createInstance.ts
index 0a2779574..394574963 100644
--- a/src/createInstance.ts
+++ b/src/createInstance.ts
@@ -32,8 +32,8 @@ import {
 } from './utils/vueCompatSupport'
 import { createVNodeTransformer } from './vnodeTransformers/util'
 import {
-  addToDoNotStubComponents,
-  createStubComponentsTransformer
+  createStubComponentsTransformer,
+  CreateStubComponentsTransformerConfig
 } from './vnodeTransformers/stubComponentsTransformer'
 import { createStubDirectivesTransformer } from './vnodeTransformers/stubDirectivesTransformer'
 
@@ -76,6 +76,9 @@ export function createInstance(
   let component: ConcreteComponent
   const instanceOptions = getInstanceOptions(options ?? {})
 
+  const rootComponents: CreateStubComponentsTransformerConfig['rootComponents'] =
+    {}
+
   if (
     isFunctionalComponent(originalComponent) ||
     isLegacyFunctionalComponent(originalComponent)
@@ -96,14 +99,14 @@ export function createInstance(
           h(originalComponent, { ...props, ...attrs }, slots),
       ...instanceOptions
     })
-    addToDoNotStubComponents(originalComponent)
+    rootComponents.functional = originalComponent
   } else if (isObjectComponent(originalComponent)) {
     component = { ...originalComponent, ...instanceOptions }
   } else {
     component = originalComponent
   }
 
-  addToDoNotStubComponents(component)
+  rootComponents.component = component
   // We've just replaced our component with its copy
   // Let's register it as a stub so user can find it
   registerStub({ source: originalComponent, stub: component })
@@ -217,11 +220,6 @@ export function createInstance(
 
   // create the app
   const app = createApp(Parent)
-  // the Parent type must not be stubbed
-  // but we can't add it directly, as createApp creates a copy
-  // and store it in app._component (since v3.2.32)
-  // So we store this one instead
-  addToDoNotStubComponents(app._component)
 
   // add tracking for emitted events
   // this must be done after `createApp`: https://github.com/vuejs/test-utils/issues/436
@@ -329,6 +327,7 @@ export function createInstance(
     createVNodeTransformer({
       transformers: [
         createStubComponentsTransformer({
+          rootComponents,
           stubs: getComponentsFromStubs(global.stubs),
           shallow: options?.shallow,
           renderStubDefaultSlot: global.renderStubDefaultSlot
diff --git a/src/vnodeTransformers/stubComponentsTransformer.ts b/src/vnodeTransformers/stubComponentsTransformer.ts
index d2d44e973..78aeae294 100644
--- a/src/vnodeTransformers/stubComponentsTransformer.ts
+++ b/src/vnodeTransformers/stubComponentsTransformer.ts
@@ -36,11 +36,6 @@ interface StubOptions {
   renderStubDefaultSlot?: boolean
 }
 
-const doNotStubComponents: WeakSet<ConcreteComponent> = new WeakSet()
-const shouldNotStub = (type: ConcreteComponent) => doNotStubComponents.has(type)
-export const addToDoNotStubComponents = (type: ConcreteComponent) =>
-  doNotStubComponents.add(type)
-
 const normalizeStubProps = (props: ComponentPropsOptions) => {
   // props are always normalized to object syntax
   const $props = props as unknown as ComponentObjectPropsOptions
@@ -102,13 +97,20 @@ const resolveComponentStubByName = (
   }
 }
 
-interface CreateStubComponentsTransformerConfig {
+export interface CreateStubComponentsTransformerConfig {
+  rootComponents: {
+    // Component which has been passed to mount. For functional components it contains a wrapper
+    component?: Component
+    // If component is functional then contains the original component otherwise empty
+    functional?: Component
+  }
   stubs?: Record<string, Component | boolean>
   shallow?: boolean
   renderStubDefaultSlot: boolean
 }
 
 export function createStubComponentsTransformer({
+  rootComponents,
   stubs = {},
   shallow = false,
   renderStubDefaultSlot = false
@@ -162,7 +164,14 @@ export function createStubComponentsTransformer({
       })
     }
 
-    if (shouldNotStub(type)) {
+    if (
+      // Don't stub VTU_ROOT component
+      !instance ||
+      // Don't stub mounted component on root level
+      (rootComponents.component === type && !instance?.parent) ||
+      // Don't stub component with compat wrapper
+      (rootComponents.functional && rootComponents.functional === type)
+    ) {
       return type
     }
 
@@ -218,7 +227,7 @@ export function createStubComponentsTransformer({
       // Set name when using shallow without stub
       const stubName = name || registeredName || componentName
 
-      const newStub =
+      return (
         config.plugins.createStubs?.({
           name: stubName,
           component: type
@@ -228,7 +237,7 @@ export function createStubComponentsTransformer({
           type,
           renderStubDefaultSlot
         })
-      return newStub
+      )
     }
 
     return type
diff --git a/tests/components/RecursiveComponent.vue b/tests/components/RecursiveComponent.vue
new file mode 100644
index 000000000..63b34a344
--- /dev/null
+++ b/tests/components/RecursiveComponent.vue
@@ -0,0 +1,14 @@
+<template>
+  <div>
+    <Hello />
+    <RecursiveComponent v-if="first" />
+  </div>
+</template>
+
+<script setup lang="ts">
+import Hello from './Hello.vue'
+
+defineProps<{
+  first?: boolean
+}>()
+</script>
diff --git a/tests/shallowMount.spec.ts b/tests/shallowMount.spec.ts
index a852cbca1..21209f04e 100644
--- a/tests/shallowMount.spec.ts
+++ b/tests/shallowMount.spec.ts
@@ -4,6 +4,7 @@ import { mount, shallowMount, VueWrapper } from '../src'
 import ComponentWithChildren from './components/ComponentWithChildren.vue'
 import ScriptSetupWithChildren from './components/ScriptSetupWithChildren.vue'
 import DynamicComponentWithComputedProperty from './components/DynamicComponentWithComputedProperty.vue'
+import RecursiveComponent from './components/RecursiveComponent.vue'
 
 describe('shallowMount', () => {
   it('renders props for stubbed component in a snapshot', () => {
@@ -73,6 +74,21 @@ describe('shallowMount', () => {
     )
   })
 
+  it('stub instance of same component', () => {
+    const wrapper = mount(RecursiveComponent, {
+      shallow: true,
+      props: {
+        first: true
+      }
+    })
+    expect(wrapper.html()).toEqual(
+      '<div>\n' +
+        '  <hello-stub></hello-stub>\n' +
+        '  <recursive-component-stub first="false"></recursive-component-stub>\n' +
+        '</div>'
+    )
+  })
+
   it('correctly renders slot content', () => {
     const ComponentWithSlot = defineComponent({
       template: '<div><slot></slot></div>'