diff --git a/services/tests/wmtests/src/com/android/server/wm/SizeCompatTests.java b/services/tests/wmtests/src/com/android/server/wm/SizeCompatTests.java
index c81ead9bd0d12eb2f738ec1b72e9c90936aa5500..7adac5b283c529e70a8f86d1859a2f1a1e145fff 100644
--- a/services/tests/wmtests/src/com/android/server/wm/SizeCompatTests.java
+++ b/services/tests/wmtests/src/com/android/server/wm/SizeCompatTests.java
@@ -16,8 +16,6 @@
 
 package com.android.server.wm;
 
-import static android.app.WindowConfiguration.ACTIVITY_TYPE_STANDARD;
-import static android.app.WindowConfiguration.ROTATION_UNDEFINED;
 import static android.app.WindowConfiguration.WINDOWING_MODE_FREEFORM;
 import static android.app.WindowConfiguration.WINDOWING_MODE_FULLSCREEN;
 import static android.app.WindowConfiguration.WINDOWING_MODE_MULTI_WINDOW;
@@ -62,7 +60,6 @@ import static com.android.internal.util.FrameworkStatsLog.APP_COMPAT_STATE_CHANG
 import static com.android.internal.util.FrameworkStatsLog.APP_COMPAT_STATE_CHANGED__STATE__LETTERBOXED_FOR_SIZE_COMPAT_MODE;
 import static com.android.internal.util.FrameworkStatsLog.APP_COMPAT_STATE_CHANGED__STATE__NOT_LETTERBOXED;
 import static com.android.internal.util.FrameworkStatsLog.APP_COMPAT_STATE_CHANGED__STATE__NOT_VISIBLE;
-import static com.android.server.wm.ActivityRecord.State.DESTROYED;
 import static com.android.server.wm.ActivityRecord.State.PAUSED;
 import static com.android.server.wm.ActivityRecord.State.RESTARTING_PROCESS;
 import static com.android.server.wm.ActivityRecord.State.RESUMED;
@@ -77,7 +74,6 @@ import static org.junit.Assert.assertEquals;
 import static org.junit.Assert.assertFalse;
 import static org.junit.Assert.assertNotEquals;
 import static org.junit.Assert.assertNotNull;
-import static org.junit.Assert.assertNull;
 import static org.junit.Assert.assertTrue;
 import static org.mockito.ArgumentMatchers.any;
 import static org.mockito.ArgumentMatchers.anyBoolean;
@@ -198,26 +194,6 @@ public class SizeCompatTests extends WindowTestsBase {
         setUpApp(builder.build());
     }
 
-    @Test
-    public void testCleanLetterboxConfigListenerWhenTranslucentIsDestroyed() {
-        mWm.mLetterboxConfiguration.setTranslucentLetterboxingOverrideEnabled(true);
-        setUpDisplaySizeWithApp(2000, 1000);
-        prepareUnresizable(mActivity, SCREEN_ORIENTATION_PORTRAIT);
-        mActivity.mDisplayContent.setIgnoreOrientationRequest(true /* ignoreOrientationRequest */);
-        // Translucent Activity
-        final ActivityRecord translucentActivity = new ActivityBuilder(mAtm)
-                .setActivityTheme(android.R.style.Theme_Translucent)
-                .setLaunchedFromUid(mActivity.getUid())
-                .setScreenOrientation(SCREEN_ORIENTATION_PORTRAIT)
-                .build();
-        mTask.addChild(translucentActivity);
-
-        translucentActivity.setState(DESTROYED, "testing");
-        translucentActivity.removeImmediately();
-
-        assertFalse(translucentActivity.mTransparentPolicy.isRunning());
-    }
-
     @Test
     public void testHorizontalReachabilityEnabledForTranslucentActivities() {
         testReachabilityEnabledForTranslucentActivity(/* dw */ 2500,  /* dh */1000,
@@ -363,42 +339,6 @@ public class SizeCompatTests extends WindowTestsBase {
         }
     }
 
-    @Test
-    public void testApplyStrategyAgainWhenOpaqueIsDestroyed() {
-        mWm.mLetterboxConfiguration.setTranslucentLetterboxingOverrideEnabled(true);
-        setUpDisplaySizeWithApp(2000, 1000);
-        prepareUnresizable(mActivity, SCREEN_ORIENTATION_PORTRAIT);
-        mActivity.mDisplayContent.setIgnoreOrientationRequest(true /* ignoreOrientationRequest */);
-        // Launch another opaque activity
-        final ActivityRecord opaqueActivity = new ActivityBuilder(mAtm)
-                .setLaunchedFromUid(mActivity.getUid())
-                .setScreenOrientation(SCREEN_ORIENTATION_PORTRAIT)
-                .build();
-        mTask.addChild(opaqueActivity);
-        // Transparent activity strategy not applied
-        assertFalse(opaqueActivity.mTransparentPolicy.isRunning());
-
-        // Launch translucent Activity
-        final ActivityRecord translucentActivity = new ActivityBuilder(mAtm)
-                .setActivityTheme(android.R.style.Theme_Translucent)
-                .setLaunchedFromUid(mActivity.getUid())
-                .setScreenOrientation(SCREEN_ORIENTATION_PORTRAIT)
-                .build();
-        mTask.addChild(translucentActivity);
-        // Transparent strategy applied
-        assertTrue(translucentActivity.mTransparentPolicy.isRunning());
-
-        spyOn(translucentActivity.mTransparentPolicy);
-        clearInvocations(translucentActivity.mTransparentPolicy);
-
-        // We destroy the first opaque activity
-        opaqueActivity.setState(DESTROYED, "testing");
-        opaqueActivity.removeImmediately();
-
-        // Check that updateInheritedLetterbox() is invoked again
-        verify(translucentActivity.mTransparentPolicy).start();
-    }
-
     // TODO(b/333663877): Enable test after fix
     @Test
     @RequiresFlagsDisabled({Flags.FLAG_INSETS_DECOUPLED_CONFIGURATION})
@@ -449,282 +389,6 @@ public class SizeCompatTests extends WindowTestsBase {
         assertEquals(cutoutHeight, innerBoundsOf.apply(mActivity).top);
     }
 
-    @Test
-    public void testResetOpaqueReferenceWhenOpaqueIsDestroyed() {
-        mWm.mLetterboxConfiguration.setTranslucentLetterboxingOverrideEnabled(true);
-        setUpDisplaySizeWithApp(2000, 1000);
-        prepareUnresizable(mActivity, SCREEN_ORIENTATION_PORTRAIT);
-        mActivity.mDisplayContent.setIgnoreOrientationRequest(true /* ignoreOrientationRequest */);
-
-        // Launch translucent Activity
-        final ActivityRecord translucentActivity = new ActivityBuilder(mAtm)
-                .setActivityTheme(android.R.style.Theme_Translucent)
-                .setLaunchedFromUid(mActivity.getUid())
-                .setScreenOrientation(SCREEN_ORIENTATION_PORTRAIT)
-                .build();
-        mTask.addChild(translucentActivity);
-        // Transparent strategy applied
-        assertTrue(translucentActivity.mTransparentPolicy.isRunning());
-
-        spyOn(translucentActivity.mTransparentPolicy);
-        clearInvocations(translucentActivity.mTransparentPolicy);
-
-        // We destroy the first opaque activity
-        mActivity.removeImmediately();
-
-        // Check that updateInheritedLetterbox() is invoked again on the TransparentPolicy
-        verify(translucentActivity.mTransparentPolicy).start();
-        assertFalse(translucentActivity.mTransparentPolicy.isRunning());
-    }
-
-    @Test
-    public void testNotApplyStrategyAgainWhenOpaqueIsNotDestroyed() {
-        mWm.mLetterboxConfiguration.setTranslucentLetterboxingOverrideEnabled(true);
-        setUpDisplaySizeWithApp(2000, 1000);
-        prepareUnresizable(mActivity, SCREEN_ORIENTATION_PORTRAIT);
-        mActivity.mDisplayContent.setIgnoreOrientationRequest(true /* ignoreOrientationRequest */);
-        // Launch another opaque activity
-        final ActivityRecord opaqueActivity = new ActivityBuilder(mAtm)
-                .setLaunchedFromUid(mActivity.getUid())
-                .setScreenOrientation(SCREEN_ORIENTATION_PORTRAIT)
-                .build();
-        mTask.addChild(opaqueActivity);
-        // Transparent activity strategy not applied
-        assertFalse(opaqueActivity.mTransparentPolicy.isRunning());
-
-        // Launch translucent Activity
-        final ActivityRecord translucentActivity = new ActivityBuilder(mAtm)
-                .setActivityTheme(android.R.style.Theme_Translucent)
-                .setLaunchedFromUid(mActivity.getUid())
-                .setScreenOrientation(SCREEN_ORIENTATION_PORTRAIT)
-                .build();
-        mTask.addChild(translucentActivity);
-        // Transparent strategy applied
-        assertTrue(translucentActivity.mTransparentPolicy.isRunning());
-
-        spyOn(translucentActivity.mTransparentPolicy);
-        clearInvocations(translucentActivity.mTransparentPolicy);
-
-        // Check that updateInheritedLetterbox() is invoked again
-        verify(translucentActivity.mTransparentPolicy, never()).start();
-    }
-
-    @Test
-    public void testApplyStrategyToTranslucentActivities() {
-        mWm.mLetterboxConfiguration.setTranslucentLetterboxingOverrideEnabled(true);
-        setUpDisplaySizeWithApp(2000, 1000);
-        prepareUnresizable(mActivity, 1.5f /* maxAspect */, SCREEN_ORIENTATION_PORTRAIT);
-        mActivity.info.setMinAspectRatio(1.2f);
-        mActivity.mDisplayContent.setIgnoreOrientationRequest(true /* ignoreOrientationRequest */);
-        // Translucent Activity
-        final ActivityRecord translucentActivity = new ActivityBuilder(mAtm)
-                .setActivityTheme(android.R.style.Theme_Translucent)
-                .setLaunchedFromUid(mActivity.getUid())
-                .setScreenOrientation(SCREEN_ORIENTATION_LANDSCAPE)
-                .setMinAspectRatio(1.1f)
-                .setMaxAspectRatio(3f)
-                .build();
-        mTask.addChild(translucentActivity);
-        // We check bounds
-        final Rect opaqueBounds = mActivity.getConfiguration().windowConfiguration.getBounds();
-        final Rect translucentRequestedBounds = translucentActivity.getRequestedOverrideBounds();
-        assertEquals(opaqueBounds, translucentRequestedBounds);
-        // We check orientation
-        final int translucentOrientation =
-                translucentActivity.getRequestedConfigurationOrientation();
-        assertEquals(ORIENTATION_PORTRAIT, translucentOrientation);
-        // We check aspect ratios
-        assertEquals(1.2f, translucentActivity.getMinAspectRatio(), 0.00001f);
-        assertEquals(1.5f, translucentActivity.getMaxAspectRatio(), 0.00001f);
-    }
-
-    @Test
-    public void testApplyStrategyToTranslucentActivitiesRetainsWindowConfigurationProperties() {
-        mWm.mLetterboxConfiguration.setTranslucentLetterboxingOverrideEnabled(true);
-        setUpDisplaySizeWithApp(2000, 1000);
-        prepareUnresizable(mActivity, SCREEN_ORIENTATION_PORTRAIT);
-        mActivity.mDisplayContent.setIgnoreOrientationRequest(true /* ignoreOrientationRequest */);
-        // Translucent Activity
-        final ActivityRecord translucentActivity = new ActivityBuilder(mAtm)
-                .setActivityTheme(android.R.style.Theme_Translucent)
-                .setLaunchedFromUid(mActivity.getUid())
-                .build();
-        final Configuration requestedConfig =
-                translucentActivity.getRequestedOverrideConfiguration();
-        final WindowConfiguration translucentWinConf = requestedConfig.windowConfiguration;
-        translucentWinConf.setActivityType(ACTIVITY_TYPE_STANDARD);
-        translucentWinConf.setWindowingMode(WINDOWING_MODE_MULTI_WINDOW);
-        translucentWinConf.setAlwaysOnTop(true);
-        translucentActivity.onRequestedOverrideConfigurationChanged(requestedConfig);
-
-        mTask.addChild(translucentActivity);
-
-        // The original override of WindowConfiguration should keep.
-        assertEquals(ACTIVITY_TYPE_STANDARD, translucentActivity.getActivityType());
-        assertEquals(WINDOWING_MODE_MULTI_WINDOW, translucentWinConf.getWindowingMode());
-        assertTrue(translucentWinConf.isAlwaysOnTop());
-        // Unless display is going to be rotated, it should always inherit from parent.
-        assertEquals(ROTATION_UNDEFINED, translucentWinConf.getDisplayRotation());
-    }
-
-    @Test
-    public void testApplyStrategyToMultipleTranslucentActivities() {
-        mWm.mLetterboxConfiguration.setTranslucentLetterboxingOverrideEnabled(true);
-        setUpDisplaySizeWithApp(2000, 1000);
-        prepareUnresizable(mActivity, 1.5f /* maxAspect */, SCREEN_ORIENTATION_PORTRAIT);
-        mActivity.info.setMinAspectRatio(1.2f);
-        mActivity.mDisplayContent.setIgnoreOrientationRequest(true /* ignoreOrientationRequest */);
-        // Translucent Activity
-        final ActivityRecord translucentActivity = new ActivityBuilder(mAtm)
-                .setActivityTheme(android.R.style.Theme_Translucent)
-                .setLaunchedFromUid(mActivity.getUid())
-                .setScreenOrientation(SCREEN_ORIENTATION_LANDSCAPE)
-                .setMinAspectRatio(1.1f)
-                .setMaxAspectRatio(3f)
-                .build();
-        mTask.addChild(translucentActivity);
-        // We check bounds
-        final Rect opaqueBounds = mActivity.getConfiguration().windowConfiguration.getBounds();
-        final Rect translucentRequestedBounds = translucentActivity.getRequestedOverrideBounds();
-        assertEquals(opaqueBounds, translucentRequestedBounds);
-        // Launch another translucent activity
-        final ActivityRecord translucentActivity2 = new ActivityBuilder(mAtm)
-                .setActivityTheme(android.R.style.Theme_Translucent)
-                .setLaunchedFromUid(mActivity.getUid())
-                .setScreenOrientation(SCREEN_ORIENTATION_LANDSCAPE)
-                .build();
-        mTask.addChild(translucentActivity2);
-        // We check bounds
-        final Rect translucent2RequestedBounds = translucentActivity2.getRequestedOverrideBounds();
-        assertEquals(opaqueBounds, translucent2RequestedBounds);
-    }
-
-    @Test
-    public void testNotApplyStrategyToTranslucentActivitiesOverEmbeddedActivities() {
-        mWm.mLetterboxConfiguration.setTranslucentLetterboxingOverrideEnabled(true);
-        setUpDisplaySizeWithApp(2000, 1000);
-        mActivity.info.screenOrientation = SCREEN_ORIENTATION_PORTRAIT;
-        mActivity.mDisplayContent.setIgnoreOrientationRequest(true /* ignoreOrientationRequest */);
-        // Mock the activity as embedded without additional TaskFragment layer in the task for
-        // simplicity.
-        doReturn(true).when(mActivity).isEmbedded();
-        // Translucent Activity
-        final ActivityRecord translucentActivity = new ActivityBuilder(mAtm)
-                .setActivityTheme(android.R.style.Theme_Translucent).build();
-        doReturn(false).when(translucentActivity).matchParentBounds();
-        mTask.addChild(translucentActivity);
-        // Check the strategy has not being applied
-        assertFalse(translucentActivity.mTransparentPolicy.isRunning());
-    }
-
-    @Test
-    public void testTranslucentActivitiesDontGoInSizeCompatMode() {
-        mWm.mLetterboxConfiguration.setTranslucentLetterboxingOverrideEnabled(true);
-        setUpDisplaySizeWithApp(2800, 1400);
-        mActivity.mDisplayContent.setIgnoreOrientationRequest(true /* ignoreOrientationRequest */);
-        prepareUnresizable(mActivity, -1f /* maxAspect */, SCREEN_ORIENTATION_PORTRAIT);
-        // Rotate to put activity in size compat mode.
-        rotateDisplay(mActivity.mDisplayContent, ROTATION_90);
-        assertTrue(mActivity.inSizeCompatMode());
-        // Rotate back
-        rotateDisplay(mActivity.mDisplayContent, ROTATION_0);
-        assertFalse(mActivity.inSizeCompatMode());
-        // We launch a transparent activity
-        final ActivityRecord translucentActivity = new ActivityBuilder(mAtm)
-                .setActivityTheme(android.R.style.Theme_Translucent)
-                .setLaunchedFromUid(mActivity.getUid())
-                .setScreenOrientation(SCREEN_ORIENTATION_PORTRAIT)
-                .build();
-        mTask.addChild(translucentActivity);
-        // It should not be in SCM
-        assertFalse(translucentActivity.inSizeCompatMode());
-        // We rotate again
-        rotateDisplay(translucentActivity.mDisplayContent, ROTATION_90);
-        assertFalse(translucentActivity.inSizeCompatMode());
-    }
-
-    @Test
-    public void testCheckOpaqueIsLetterboxedWhenStrategyIsApplied() {
-        mWm.mLetterboxConfiguration.setTranslucentLetterboxingOverrideEnabled(true);
-        setUpDisplaySizeWithApp(2000, 1000);
-        prepareUnresizable(mActivity, SCREEN_ORIENTATION_PORTRAIT);
-        mActivity.mDisplayContent.setIgnoreOrientationRequest(true /* ignoreOrientationRequest */);
-        // Translucent Activity
-        final ActivityRecord translucentActivity = new ActivityBuilder(mAtm)
-                .setActivityTheme(android.R.style.Theme_Translucent)
-                .setLaunchedFromUid(mActivity.getUid())
-                .build();
-        assertFalse(translucentActivity.fillsParent());
-        assertTrue(mActivity.fillsParent());
-        mActivity.finishing = true;
-        assertFalse(mActivity.occludesParent());
-        mTask.addChild(translucentActivity);
-        // The translucent activity won't inherit letterbox behavior from a finishing activity.
-        assertFalse(translucentActivity.mTransparentPolicy.isRunning());
-    }
-
-    @Test
-    public void testTranslucentActivitiesWhenUnfolding() {
-        mWm.mLetterboxConfiguration.setTranslucentLetterboxingOverrideEnabled(true);
-        setUpDisplaySizeWithApp(2800, 1400);
-        mActivity.mDisplayContent.setIgnoreOrientationRequest(
-                true /* ignoreOrientationRequest */);
-        mActivity.mWmService.mLetterboxConfiguration.setLetterboxHorizontalPositionMultiplier(
-                1.0f /*letterboxVerticalPositionMultiplier*/);
-        prepareUnresizable(mActivity, SCREEN_ORIENTATION_PORTRAIT);
-        // We launch a transparent activity
-        final ActivityRecord translucentActivity = new ActivityBuilder(mAtm)
-                .setActivityTheme(android.R.style.Theme_Translucent)
-                .setLaunchedFromUid(mActivity.getUid())
-                .setScreenOrientation(SCREEN_ORIENTATION_PORTRAIT)
-                .build();
-        mTask.addChild(translucentActivity);
-        assertEquals(translucentActivity.getBounds(), mActivity.getBounds());
-
-        mTask.setWindowingMode(WINDOWING_MODE_FULLSCREEN);
-        spyOn(mActivity);
-
-        // Halffold
-        setFoldablePosture(translucentActivity, true /* isHalfFolded */,
-                false /* isTabletop */);
-        verify(mActivity).recomputeConfiguration();
-        assertEquals(translucentActivity.getBounds(), mActivity.getBounds());
-        clearInvocations(mActivity);
-
-        // Unfold
-        setFoldablePosture(translucentActivity, false /* isHalfFolded */,
-                false /* isTabletop */);
-        verify(mActivity).recomputeConfiguration();
-        assertEquals(translucentActivity.getBounds(), mActivity.getBounds());
-    }
-
-    @Test
-    public void testTranslucentActivity_clearSizeCompatMode_inheritedCompatDisplayInsetsCleared() {
-        mWm.mLetterboxConfiguration.setTranslucentLetterboxingOverrideEnabled(true);
-        setUpDisplaySizeWithApp(2800, 1400);
-        mActivity.mDisplayContent.setIgnoreOrientationRequest(true /* ignoreOrientationRequest */);
-        prepareUnresizable(mActivity, -1f /* maxAspect */, SCREEN_ORIENTATION_PORTRAIT);
-        // Rotate to put activity in size compat mode.
-        rotateDisplay(mActivity.mDisplayContent, ROTATION_90);
-        assertTrue(mActivity.inSizeCompatMode());
-
-        // We launch a transparent activity
-        final ActivityRecord translucentActivity = new ActivityBuilder(mAtm)
-                .setActivityTheme(android.R.style.Theme_Translucent)
-                .setLaunchedFromUid(mActivity.getUid())
-                .setScreenOrientation(SCREEN_ORIENTATION_PORTRAIT)
-                .build();
-        mTask.addChild(translucentActivity);
-
-        // The transparent activity inherits the compat display insets of the opaque activity
-        // beneath it
-        assertNotNull(translucentActivity.getCompatDisplayInsets());
-
-        // Clearing SCM should also clear the inherited compat display insets
-        translucentActivity.clearSizeCompatMode();
-        assertNull(translucentActivity.getCompatDisplayInsets());
-    }
-
     @Test
     public void testRestartProcessIfVisible() {
         setUpDisplaySizeWithApp(1000, 2500);
diff --git a/services/tests/wmtests/src/com/android/server/wm/TransparentPolicyTest.java b/services/tests/wmtests/src/com/android/server/wm/TransparentPolicyTest.java
new file mode 100644
index 0000000000000000000000000000000000000000..1d6e307779222c2540a2b3dc8ac48cfae846e798
--- /dev/null
+++ b/services/tests/wmtests/src/com/android/server/wm/TransparentPolicyTest.java
@@ -0,0 +1,637 @@
+/*
+ * Copyright (C) 2024 The Android Open Source Project
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+package com.android.server.wm;
+
+import static android.app.WindowConfiguration.ACTIVITY_TYPE_STANDARD;
+import static android.app.WindowConfiguration.ROTATION_UNDEFINED;
+import static android.app.WindowConfiguration.WINDOWING_MODE_FULLSCREEN;
+import static android.app.WindowConfiguration.WINDOWING_MODE_MULTI_WINDOW;
+import static android.content.pm.ActivityInfo.RESIZE_MODE_RESIZEABLE;
+import static android.content.pm.ActivityInfo.RESIZE_MODE_UNRESIZEABLE;
+import static android.content.pm.ActivityInfo.SCREEN_ORIENTATION_LANDSCAPE;
+import static android.content.pm.ActivityInfo.SCREEN_ORIENTATION_PORTRAIT;
+import static android.content.pm.ActivityInfo.SCREEN_ORIENTATION_UNSPECIFIED;
+import static android.view.Surface.ROTATION_0;
+import static android.view.Surface.ROTATION_90;
+
+import static com.android.dx.mockito.inline.extended.ExtendedMockito.doReturn;
+import static com.android.dx.mockito.inline.extended.ExtendedMockito.spyOn;
+
+import static org.junit.Assert.assertEquals;
+import static org.junit.Assert.assertFalse;
+import static org.junit.Assert.assertTrue;
+import static org.mockito.ArgumentMatchers.any;
+import static org.mockito.ArgumentMatchers.anyBoolean;
+import static org.mockito.Mockito.clearInvocations;
+import static org.mockito.Mockito.never;
+import static org.mockito.Mockito.verify;
+import static org.mockito.Mockito.when;
+
+import android.app.WindowConfiguration;
+import android.content.res.Configuration;
+import android.graphics.Rect;
+import android.platform.test.annotations.Presubmit;
+
+import org.junit.Assert;
+import org.junit.Test;
+import org.junit.runner.RunWith;
+
+import java.util.ArrayList;
+import java.util.List;
+import java.util.function.Consumer;
+import java.util.function.Function;
+import java.util.function.Predicate;
+
+/**
+ * Test class for {@link TransparentPolicy}.
+ *
+ * Build/Install/Run:
+ * atest WmTests:TransparentPolicyTest
+ */
+@Presubmit
+@RunWith(WindowTestRunner.class)
+public class TransparentPolicyTest extends WindowTestsBase {
+
+    @Test
+    public void testNotStartingWhenDisabled() {
+        runTestScenario((robot) -> {
+            robot.launchTransparentActivityInTask();
+
+            robot.checkTopActivityPolicyStateIsNotRunning();
+        }, /* policyEnabled */ false);
+    }
+
+    @Test
+    public void testNotStartingWithoutTask() {
+        runTestScenario((robot) -> {
+            robot.launchTransparentActivity();
+
+            robot.checkTopActivityPolicyStartNotInvoked();
+            robot.checkTopActivityPolicyStateIsNotRunning();
+        });
+    }
+
+    @Test
+    public void testPolicyRunningWhenTransparentIsUsed() {
+        runTestScenario((robot) -> {
+            robot.launchTransparentActivityInTask();
+
+            robot.checkTopActivityPolicyStartNotInvoked();
+            robot.checkTopActivityPolicyStateIsRunning();
+        });
+    }
+
+    @Test
+    public void testCleanLetterboxConfigListenerWhenTranslucentIsDestroyed() {
+        runTestScenario((robot) -> {
+            robot.launchTransparentActivityInTask();
+            robot.checkTopActivityPolicyStartNotInvoked();
+            robot.checkTopActivityPolicyStateIsRunning();
+
+            robot.clearInteractions();
+            robot.destroyTopActivity();
+
+            robot.checkTopActivityPolicyStopInvoked();
+            robot.checkTopActivityPolicyStateIsNotRunning();
+        });
+    }
+
+    @Test
+    public void testApplyStrategyAgainWhenOpaqueIsDestroyed() {
+        runTestScenario((robot) -> {
+            robot.launchOpaqueActivityInTask();
+            robot.checkTopActivityPolicyStateIsNotRunning();
+
+            robot.launchTransparentActivityInTask();
+            robot.checkTopActivityPolicyStateIsRunning();
+
+            robot.destroyActivity(/* fromTop */ 1);
+            robot.checkTopActivityPolicyStartInvoked();
+        });
+    }
+
+    @Test
+    public void testResetOpaqueReferenceWhenOpaqueIsDestroyed() {
+        runTestScenario((robot) -> {
+            robot.launchTransparentActivityInTask();
+
+            robot.clearInteractions();
+            robot.destroyActivity(/* fromTop */ 1);
+
+            robot.checkTopActivityPolicyStartInvoked();
+            robot.checkTopActivityPolicyStateIsNotRunning();
+        });
+    }
+
+    @Test
+    public void testNotApplyStrategyAgainWhenOpaqueIsNotDestroyed() {
+        runTestScenario((robot) -> {
+            robot.launchOpaqueActivityInTask();
+            robot.checkTopActivityPolicyStateIsNotRunning();
+
+            robot.launchTransparentActivityInTask();
+            robot.checkTopActivityPolicyStateIsRunning();
+
+            robot.clearInteractions();
+            robot.checkTopActivityPolicyStopNotInvoked();
+        });
+    }
+
+    @Test
+    public void testApplyStrategyToTranslucentActivities() {
+        runTestScenario((robot) -> {
+            robot.configureTopActivity(/* minAspect */ 1.2f, /* maxAspect */ 1.5f,
+                    SCREEN_ORIENTATION_PORTRAIT, /* isUnresizable */ true);
+            robot.configureTopActivityIgnoreOrientationRequest(true);
+            robot.launchActivity(/* minAspect */ 1.1f, /* maxAspect */ 3f,
+                    SCREEN_ORIENTATION_LANDSCAPE, /* transparent */true, /* addToTask */true);
+            robot.checkTopActivityPolicyStateIsRunning();
+            robot.checkTopActivityHasInheritedBoundsFrom(/* fromTop */ 1);
+            robot.checkTopOrientation(SCREEN_ORIENTATION_PORTRAIT);
+            robot.checkTopAspectRatios(/* minAspectRatio */ 1.2f, /* maxAspectRatio */ 1.5f);
+        });
+    }
+
+    @Test
+    public void testApplyStrategyToTransparentActivitiesRetainsWindowConfigurationProperties() {
+        runTestScenario((robot) -> {
+            robot.launchTransparentActivity();
+
+            robot.forceChangeInTopActivityConfiguration();
+            robot.attachTopActivityToTask();
+
+            robot.checkTopActivityConfigurationConfiguration();
+        });
+    }
+
+    @Test
+    public void testApplyStrategyToMultipleTranslucentActivities() {
+        runTestScenario((robot) -> {
+            robot.launchTransparentActivityInTask();
+            robot.checkTopActivityPolicyStateIsRunning();
+            robot.checkTopActivityHasInheritedBoundsFrom(/* fromTop */ 1);
+
+            robot.launchTransparentActivityInTask();
+            robot.checkTopActivityPolicyStateIsRunning();
+            robot.checkTopActivityHasInheritedBoundsFrom(/* fromTop */ 2);
+        });
+    }
+
+    @Test
+    public void testNotApplyStrategyToTranslucentActivitiesOverEmbeddedActivities() {
+        runTestScenario((robot) -> {
+            robot.configureTopActivityAsEmbedded();
+            robot.launchTransparentActivityInTask();
+
+            robot.checkTopActivityPolicyStartNotInvoked();
+            robot.checkTopActivityPolicyStateIsNotRunning();
+        });
+    }
+
+    @Test
+    public void testTranslucentActivitiesDontGoInSizeCompatMode() {
+        runTestScenario((robot) -> {
+            robot.configureTopActivityIgnoreOrientationRequest(true);
+            robot.configureUnresizableTopActivity(SCREEN_ORIENTATION_PORTRAIT);
+            robot.rotateDisplayForTopActivity(ROTATION_90);
+            robot.checkTopActivitySizeCompatMode(/* inScm */ true);
+            robot.rotateDisplayForTopActivity(ROTATION_0);
+            robot.checkTopActivitySizeCompatMode(/* inScm */ false);
+
+            robot.launchTransparentActivityInTask();
+            robot.checkTopActivitySizeCompatMode(/* inScm */ false);
+            robot.rotateDisplayForTopActivity(ROTATION_90);
+            robot.checkTopActivitySizeCompatMode(/* inScm */ false);
+        }, /* displayWidth */ 2800,  /* displayHeight */ 1400);
+    }
+
+    @Test
+    public void testCheckOpaqueIsLetterboxedWhenStrategyIsApplied() {
+        runTestScenario((robot) -> {
+            robot.configureUnresizableTopActivity(SCREEN_ORIENTATION_PORTRAIT);
+            robot.configureTopActivityIgnoreOrientationRequest(true);
+            robot.launchTransparentActivity();
+
+            robot.assertFalseOnTopActivity(ActivityRecord::fillsParent);
+            robot.assertTrueOnActivity(/* fromTop */ 1, ActivityRecord::fillsParent);
+            robot.applyTo(/* fromTop */ 1, (activity) -> {
+                activity.finishing = true;
+            });
+            robot.assertFalseOnActivity(/* fromTop */ 1, ActivityRecord::occludesParent);
+            robot.attachTopActivityToTask();
+
+            robot.checkTopActivityPolicyStateIsNotRunning();
+        });
+    }
+
+    @Test
+    public void testTranslucentActivitiesWhenUnfolding() {
+        runTestScenario((robot) -> {
+            robot.applyToTop((activity) -> {
+                activity.mWmService.mLetterboxConfiguration
+                        .setLetterboxHorizontalPositionMultiplier(1.0f);
+            });
+            robot.configureUnresizableTopActivity(SCREEN_ORIENTATION_PORTRAIT);
+            robot.configureTopActivityIgnoreOrientationRequest(true);
+            robot.launchTransparentActivityInTask();
+            robot.checkTopActivityHasInheritedBoundsFrom(/* fromTop */ 1);
+
+            robot.configureTaskWindowingMode(WINDOWING_MODE_FULLSCREEN);
+
+            robot.configureTopActivityFoldablePosture(/* isHalfFolded */ true,
+                    /* isTabletop */ false);
+            robot.checkTopActivityRecomputedConfiguration();
+            robot.checkTopActivityHasInheritedBoundsFrom(/* fromTop */ 1);
+            robot.clearInteractions();
+
+            robot.configureTopActivityFoldablePosture(/* isHalfFolded */ false,
+                    /* isTabletop */ false);
+            robot.checkTopActivityRecomputedConfiguration();
+            robot.checkTopActivityHasInheritedBoundsFrom(/* fromTop */ 1);
+        }, /* displayWidth */ 2800,  /* displayHeight */ 1400);
+    }
+
+
+    @Test
+    public void testTranslucentActivity_clearSizeCompatMode_inheritedCompatDisplayInsetsCleared() {
+        runTestScenario((robot) -> {
+            robot.configureTopActivityIgnoreOrientationRequest(true);
+            robot.configureUnresizableTopActivity(SCREEN_ORIENTATION_PORTRAIT);
+            // Rotate to put activity in size compat mode.
+            robot.rotateDisplayForTopActivity(ROTATION_90);
+            robot.checkTopActivitySizeCompatMode(/* inScm */ true);
+
+            robot.launchTransparentActivityInTask();
+            robot.assertNotNullOnTopActivity(ActivityRecord::getCompatDisplayInsets);
+            robot.applyToTop(ActivityRecord::clearSizeCompatMode);
+            robot.assertNullOnTopActivity(ActivityRecord::getCompatDisplayInsets);
+        });
+    }
+
+    private void runTestScenario(Consumer<TransparentPolicyRobotTest> consumer,
+                                 boolean policyEnabled, int displayWidth, int displayHeight) {
+        spyOn(mWm.mLetterboxConfiguration);
+        when(mWm.mLetterboxConfiguration.isTranslucentLetterboxingEnabled())
+                .thenReturn(policyEnabled);
+        final TestDisplayContent.Builder builder = new TestDisplayContent.Builder(mAtm,
+                displayWidth, displayHeight);
+        final Task task = new TaskBuilder(mSupervisor).setDisplay(builder.build())
+                .setCreateActivity(true).build();
+        final ActivityRecord opaqueActivity = task.getTopNonFinishingActivity();
+        final TransparentPolicyRobotTest robot = new TransparentPolicyRobotTest(mAtm, task,
+                opaqueActivity);
+        consumer.accept(robot);
+    }
+
+    private void runTestScenario(Consumer<TransparentPolicyRobotTest> consumer,
+                                 int displayWidth, int displayHeight) {
+        runTestScenario(consumer, /* policyEnabled */ true, displayWidth, displayHeight);
+    }
+
+    private void runTestScenario(Consumer<TransparentPolicyRobotTest> consumer,
+                                 boolean policyEnabled) {
+        runTestScenario(consumer, policyEnabled, /* displayWidth */ 2000,
+                /* displayHeight */ 1000);
+    }
+
+    private void runTestScenario(Consumer<TransparentPolicyRobotTest> consumer) {
+        runTestScenario(consumer, /* policyEnabled */ true);
+    }
+
+    /**
+     * Robot pattern implementation for TransparentPolicy
+     * TODO(b/344587983): Extract Robot to be reused in different test classes.
+     */
+    private static class TransparentPolicyRobotTest {
+
+        private final ActivityTaskManagerService mAtm;
+
+        private final Task mTask;
+
+        private final ActivityStackTest mActivityStack;
+
+        private WindowConfiguration mTopActivityWindowConfiguration;
+
+        private TransparentPolicyRobotTest(ActivityTaskManagerService atm, Task task,
+                                           ActivityRecord opaqueActivity) {
+            mAtm = atm;
+            mTask = task;
+            mActivityStack = new ActivityStackTest();
+            mActivityStack.pushActivity(opaqueActivity);
+            spyOn(opaqueActivity.mTransparentPolicy);
+        }
+
+        void configureTopActivityAsEmbedded() {
+            final ActivityRecord topActivity = mActivityStack.top();
+            spyOn(topActivity);
+            doReturn(true).when(topActivity).isEmbedded();
+        }
+
+        private void launchActivity(float minAspectRatio, float maxAspectRatio,
+                                    @Configuration.Orientation int orientation, boolean transparent,
+                                    boolean addToTask) {
+            final ActivityBuilder activityBuilder = new ActivityBuilder(mAtm)
+                    .setScreenOrientation(orientation)
+                    .setLaunchedFromUid(mActivityStack.base().getUid());
+            if (transparent) {
+                activityBuilder.setActivityTheme(android.R.style.Theme_Translucent);
+            }
+            if (minAspectRatio >= 0) {
+                activityBuilder.setMinAspectRatio(minAspectRatio);
+            }
+            if (maxAspectRatio >= 0) {
+                activityBuilder.setMaxAspectRatio(maxAspectRatio);
+            }
+            final ActivityRecord newActivity = activityBuilder.build();
+            if (addToTask) {
+                mTask.addChild(newActivity);
+            }
+            spyOn(newActivity.mTransparentPolicy);
+            mActivityStack.pushActivity(newActivity);
+        }
+
+        void attachTopActivityToTask() {
+            mTask.addChild(mActivityStack.top());
+        }
+
+        void launchTransparentActivity() {
+            launchActivity(/*minAspectRatio */ -1, /* maxAspectRatio */ -1,
+                    SCREEN_ORIENTATION_PORTRAIT, /* transparent */ true,
+                    /* addToTask */ false);
+        }
+
+        void launchTransparentActivityInTask() {
+            launchActivity(/*minAspectRatio */ -1, /* maxAspectRatio */ -1,
+                    SCREEN_ORIENTATION_PORTRAIT, /* transparent */ true,
+                    /* addToTask */true);
+        }
+
+        void launchOpaqueActivityInTask() {
+            launchActivity(/*minAspectRatio */ -1, /* maxAspectRatio */ -1,
+                    SCREEN_ORIENTATION_PORTRAIT, /* transparent */ false,
+                    /* addToTask */true);
+        }
+
+        void destroyTopActivity() {
+            mActivityStack.top().removeImmediately();
+        }
+
+        void destroyActivity(int fromTop) {
+            mActivityStack.applyTo(/* fromTop */ fromTop, ActivityRecord::removeImmediately);
+        }
+
+        void forceChangeInTopActivityConfiguration() {
+            mActivityStack.applyToTop((activity) -> {
+                final Configuration requestedConfig = activity.getRequestedOverrideConfiguration();
+                mTopActivityWindowConfiguration = requestedConfig.windowConfiguration;
+                mTopActivityWindowConfiguration.setActivityType(ACTIVITY_TYPE_STANDARD);
+                mTopActivityWindowConfiguration.setWindowingMode(WINDOWING_MODE_MULTI_WINDOW);
+                mTopActivityWindowConfiguration.setAlwaysOnTop(true);
+                activity.onRequestedOverrideConfigurationChanged(requestedConfig);
+            });
+        }
+
+        void checkTopActivityPolicyStateIsRunning() {
+            assertTrue(mActivityStack.top().mTransparentPolicy.isRunning());
+        }
+
+        void checkTopActivityPolicyStateIsNotRunning() {
+            assertFalse(mActivityStack.top().mTransparentPolicy.isRunning());
+        }
+
+        void checkTopActivityPolicyStopInvoked() {
+            verify(mActivityStack.top().mTransparentPolicy).stop();
+        }
+
+        void checkTopActivityPolicyStopNotInvoked() {
+            mActivityStack.applyToTop((activity) -> {
+                verify(activity.mTransparentPolicy, never()).stop();
+            });
+        }
+
+        void checkTopActivityPolicyStartInvoked() {
+            mActivityStack.applyToTop((activity) -> {
+                verify(activity.mTransparentPolicy).start();
+            });
+        }
+
+        void checkTopActivityPolicyStartNotInvoked() {
+            verify(mActivityStack.top().mTransparentPolicy, never()).start();
+        }
+
+        void assertTrueOnActivity(int fromTop, Predicate<ActivityRecord> predicate) {
+            mActivityStack.applyTo(fromTop, (activity) -> {
+                Assert.assertTrue(predicate.test(activity));
+            });
+        }
+
+        void assertFalseOnTopActivity(Predicate<ActivityRecord> predicate) {
+            Assert.assertFalse(predicate.test(mActivityStack.top()));
+        }
+
+        void assertFalseOnActivity(int fromTop, Predicate<ActivityRecord> predicate) {
+            mActivityStack.applyTo(fromTop, (activity) -> {
+                Assert.assertFalse(predicate.test(activity));
+            });
+        }
+
+        void assertNotNullOnTopActivity(Function<ActivityRecord, Object> getter) {
+            Assert.assertNotNull(getter.apply(mActivityStack.top()));
+        }
+
+        void assertNullOnTopActivity(Function<ActivityRecord, Object> getter) {
+            Assert.assertNull(getter.apply(mActivityStack.top()));
+        }
+
+        void checkTopActivityConfigurationConfiguration() {
+            mActivityStack.applyToTop((activity) -> {
+                // The original override of WindowConfiguration should keep.
+                assertEquals(ACTIVITY_TYPE_STANDARD, activity.getActivityType());
+                assertEquals(WINDOWING_MODE_MULTI_WINDOW,
+                        mTopActivityWindowConfiguration.getWindowingMode());
+                assertTrue(mTopActivityWindowConfiguration.isAlwaysOnTop());
+                // Unless display is going to be rotated, it should always inherit from parent.
+                assertEquals(ROTATION_UNDEFINED,
+                        mTopActivityWindowConfiguration.getDisplayRotation());
+            });
+        }
+
+        void checkTopActivityHasInheritedBoundsFrom(int fromTop) {
+            final ActivityRecord topActivity = mActivityStack.top();
+            final ActivityRecord otherActivity = mActivityStack.getFromTop(/* fromTop */ fromTop);
+            final Rect opaqueBounds = otherActivity.getConfiguration().windowConfiguration
+                    .getBounds();
+            final Rect translucentRequestedBounds = topActivity.getRequestedOverrideBounds();
+            Assert.assertEquals(opaqueBounds, translucentRequestedBounds);
+        }
+
+        void checkTopActivityRecomputedConfiguration() {
+            verify(mActivityStack.top()).recomputeConfiguration();
+        }
+
+        void checkTopOrientation(int orientation) {
+            Assert.assertEquals(orientation, mActivityStack.top()
+                    .getRequestedConfigurationOrientation());
+        }
+
+        void configureTaskWindowingMode(int windowingMode) {
+            mTask.setWindowingMode(windowingMode);
+        }
+
+        void checkTopAspectRatios(float minAspectRatio, float maxAspectRatio) {
+            final ActivityRecord topActivity = mActivityStack.top();
+            Assert.assertEquals(minAspectRatio, topActivity.getMinAspectRatio(), 0.0001);
+            Assert.assertEquals(maxAspectRatio, topActivity.getMaxAspectRatio(), 0.0001);
+        }
+
+        void checkTopActivitySizeCompatMode(boolean inScm) {
+            Assert.assertEquals(inScm, mActivityStack.top().inSizeCompatMode());
+        }
+
+        void clearInteractions() {
+            mActivityStack.applyToAll((activity) -> {
+                clearInvocations(activity);
+                clearInvocations(activity.mTransparentPolicy);
+            });
+        }
+
+        void configureTopActivity(float minAspect, float maxAspect, int screenOrientation,
+                                  boolean isUnresizable) {
+            prepareLimitedBounds(mActivityStack.top(), minAspect, maxAspect, screenOrientation,
+                    isUnresizable);
+        }
+
+        void configureTopActivityIgnoreOrientationRequest(boolean ignoreOrientationRequest) {
+            mActivityStack.top().mDisplayContent
+                    .setIgnoreOrientationRequest(ignoreOrientationRequest);
+        }
+
+        void configureUnresizableTopActivity(int screenOrientation) {
+            configureTopActivity(-1, -1, screenOrientation, true);
+        }
+
+        void applyToTop(Consumer<ActivityRecord> consumer) {
+            consumer.accept(mActivityStack.top());
+        }
+
+        void applyTo(int fromTop, Consumer<ActivityRecord> consumer) {
+            mActivityStack.applyTo(fromTop, consumer);
+        }
+
+        void rotateDisplayForTopActivity(int rotation) {
+            rotateDisplay(mActivityStack.top().mDisplayContent, rotation);
+        }
+
+        /**
+         * Setups activity with restriction on its bounds, such as maxAspect, minAspect,
+         * fixed orientation, and/or whether it is resizable.
+         */
+        void prepareLimitedBounds(ActivityRecord activity, float minAspect, float maxAspect,
+                                  int screenOrientation, boolean isUnresizable) {
+            activity.info.resizeMode = isUnresizable
+                    ? RESIZE_MODE_UNRESIZEABLE
+                    : RESIZE_MODE_RESIZEABLE;
+            final Task task = activity.getTask();
+            if (task != null) {
+                // Update the Task resize value as activity will follow the task.
+                task.mResizeMode = activity.info.resizeMode;
+                task.getRootActivity().info.resizeMode = activity.info.resizeMode;
+            }
+            activity.setVisibleRequested(true);
+            if (maxAspect >= 0) {
+                activity.info.setMaxAspectRatio(maxAspect);
+            }
+            if (minAspect >= 0) {
+                activity.info.setMinAspectRatio(minAspect);
+            }
+            if (screenOrientation != SCREEN_ORIENTATION_UNSPECIFIED) {
+                activity.info.screenOrientation = screenOrientation;
+                activity.setRequestedOrientation(screenOrientation);
+            }
+            // Make sure to use the provided configuration to construct the size compat fields.
+            activity.clearSizeCompatMode();
+            activity.ensureActivityConfiguration();
+            // Make sure the display configuration reflects the change of activity.
+            if (activity.mDisplayContent.updateOrientation()) {
+                activity.mDisplayContent.sendNewConfiguration();
+            }
+        }
+
+        void configureTopActivityFoldablePosture(boolean isHalfFolded, boolean isTabletop) {
+            mActivityStack.applyToTop((activity) -> {
+                final DisplayRotation r = activity.mDisplayContent.getDisplayRotation();
+                doReturn(isHalfFolded).when(r).isDisplaySeparatingHinge();
+                doReturn(false).when(r)
+                        .isDeviceInPosture(any(DeviceStateController.DeviceState.class),
+                                anyBoolean());
+                if (isHalfFolded) {
+                    doReturn(true).when(r)
+                            .isDeviceInPosture(DeviceStateController.DeviceState.HALF_FOLDED,
+                                    isTabletop);
+                }
+                activity.recomputeConfiguration();
+            });
+        }
+
+        private static void rotateDisplay(DisplayContent display, int rotation) {
+            final Configuration c = new Configuration();
+            display.getDisplayRotation().setRotation(rotation);
+            display.computeScreenConfiguration(c);
+            display.onRequestedOverrideConfigurationChanged(c);
+        }
+
+        /**
+         * Contains all the ActivityRecord launched in the test. This is different from what's in
+         * the Task because activities are added here even if not added to tasks.
+         */
+        private static class ActivityStackTest {
+            private final List<ActivityRecord> mActivities = new ArrayList<>();
+
+            void pushActivity(ActivityRecord activityRecord) {
+                mActivities.add(activityRecord);
+            }
+
+            void applyToTop(Consumer<ActivityRecord> consumer) {
+                consumer.accept(top());
+            }
+
+            ActivityRecord getFromTop(int fromTop) {
+                return mActivities.get(mActivities.size() - fromTop - 1);
+            }
+
+            ActivityRecord base() {
+                return mActivities.get(0);
+            }
+
+            ActivityRecord top() {
+                return mActivities.get(mActivities.size() - 1);
+            }
+
+            // Allows access to the activity at position beforeLast from the top.
+            // If fromTop = 0 the activity used is the top one.
+            void applyTo(int fromTop, Consumer<ActivityRecord> consumer) {
+                consumer.accept(getFromTop(fromTop));
+            }
+
+            void applyToAll(Consumer<ActivityRecord> consumer) {
+                for (int i = mActivities.size() - 1; i >= 0; i--) {
+                    consumer.accept(mActivities.get(i));
+                }
+            }
+        }
+    }
+}