diff --git a/libs/WindowManager/Shell/src/com/android/wm/shell/common/pip/PipBoundsState.java b/libs/WindowManager/Shell/src/com/android/wm/shell/common/pip/PipBoundsState.java
index 8b6c7b663f82e3f544391db5e2941668e1c3bf1b..68d26da2002f7084d737f50eb20c1fa4a5d242e1 100644
--- a/libs/WindowManager/Shell/src/com/android/wm/shell/common/pip/PipBoundsState.java
+++ b/libs/WindowManager/Shell/src/com/android/wm/shell/common/pip/PipBoundsState.java
@@ -140,7 +140,7 @@ public class PipBoundsState {
         // spec takes the aspect ratio of the bounds into account, so both width and height
         // scale by the same factor.
         addPipExclusionBoundsChangeCallback((bounds) -> {
-            mBoundsScale = Math.min((float) bounds.width() / mMaxSize.x, 1.0f);
+            updateBoundsScale();
         });
     }
 
@@ -152,6 +152,11 @@ public class PipBoundsState {
         mSizeSpecSource.onConfigurationChanged();
     }
 
+    /** Update the bounds scale percentage value. */
+    public void updateBoundsScale() {
+        mBoundsScale = Math.min((float) mBounds.width() / mMaxSize.x, 1.0f);
+    }
+
     private void reloadResources() {
         mStashOffset = mContext.getResources().getDimensionPixelSize(R.dimen.pip_stash_offset);
     }
diff --git a/libs/WindowManager/Shell/src/com/android/wm/shell/pip/PipTransition.java b/libs/WindowManager/Shell/src/com/android/wm/shell/pip/PipTransition.java
index 896ca96477200e8df4fecea96d67b3f43f2e894c..e018ecc0f7e37cd6e93716a0cb622d04b5d67a0c 100644
--- a/libs/WindowManager/Shell/src/com/android/wm/shell/pip/PipTransition.java
+++ b/libs/WindowManager/Shell/src/com/android/wm/shell/pip/PipTransition.java
@@ -286,12 +286,6 @@ public class PipTransition extends PipTransitionController {
         // For transition that we don't animate, but contains the PIP leash, we need to update the
         // PIP surface, otherwise it will be reset after the transition.
         if (currentPipTaskChange != null) {
-            // Set the "end" bounds of pip. The default setup uses the start bounds. Since this is
-            // changing the *finish*Transaction, we need to use the end bounds. This will also
-            // make sure that the fade-in animation (below) uses the end bounds as well.
-            if (!currentPipTaskChange.getEndAbsBounds().isEmpty()) {
-                mPipBoundsState.setBounds(currentPipTaskChange.getEndAbsBounds());
-            }
             updatePipForUnhandledTransition(currentPipTaskChange, startTransaction,
                     finishTransaction);
         }
diff --git a/libs/WindowManager/Shell/src/com/android/wm/shell/pip/phone/PipController.java b/libs/WindowManager/Shell/src/com/android/wm/shell/pip/phone/PipController.java
index c5a01025dcdd402384bb500944daf50b80b5d7e8..05d4f53986b89726ef0f45e4961b41974d4e625e 100644
--- a/libs/WindowManager/Shell/src/com/android/wm/shell/pip/phone/PipController.java
+++ b/libs/WindowManager/Shell/src/com/android/wm/shell/pip/phone/PipController.java
@@ -244,6 +244,9 @@ public class PipController implements PipTransitionController.PipTransitionCallb
             // The same rotation may have been set by auto PiP-able or fixed rotation. So notify
             // the change with fromRotation=false to apply the rotated destination bounds from
             // PipTaskOrganizer#onMovementBoundsChanged.
+            // We need to update the bounds scale in case this was from fixed rotation, as the
+            // current proportion was computed using the previous orientation max size and is wrong.
+            mPipBoundsState.updateBoundsScale();
             updateMovementBounds(null, false /* fromRotation */,
                     false /* fromImeAdjustment */, false /* fromShelfAdjustment */, t);
             return;
@@ -797,21 +800,15 @@ public class PipController implements PipTransitionController.PipTransitionCallb
                     mPipBoundsAlgorithm.getMovementBounds(postChangeBounds),
                     mPipBoundsState.getStashedState());
 
-            // Scale PiP on density dpi change, so it appears to be the same size physically.
-            final boolean densityDpiChanged =
-                    mPipDisplayLayoutState.getDisplayLayout().densityDpi() != 0
-                    && (mPipDisplayLayoutState.getDisplayLayout().densityDpi()
-                            != layout.densityDpi());
-            if (densityDpiChanged) {
-                final float scale = (float) layout.densityDpi()
-                        / mPipDisplayLayoutState.getDisplayLayout().densityDpi();
-                postChangeBounds.set(0, 0,
-                        (int) (postChangeBounds.width() * scale),
-                        (int) (postChangeBounds.height() * scale));
-            }
-
             updateDisplayLayout.run();
 
+            // Resize the PiP bounds to be at the same scale relative to the new size spec. For
+            // example, if PiP was resized to 90% of the maximum size on the previous layout,
+            // make sure it is 90% of the new maximum size spec.
+            postChangeBounds.set(0, 0,
+                    (int) (mPipBoundsState.getMaxSize().x * mPipBoundsState.getBoundsScale()),
+                    (int) (mPipBoundsState.getMaxSize().y * mPipBoundsState.getBoundsScale()));
+
             // Calculate the PiP bounds in the new orientation based on same fraction along the
             // rotated movement bounds.
             final Rect postChangeMovementBounds = mPipBoundsAlgorithm.getMovementBounds(
@@ -827,6 +824,10 @@ public class PipController implements PipTransitionController.PipTransitionCallb
             mPipBoundsState.setHasUserResizedPip(true);
             mTouchHandler.setUserResizeBounds(postChangeBounds);
 
+            final boolean densityDpiChanged =
+                    mPipDisplayLayoutState.getDisplayLayout().densityDpi() != 0
+                            && (mPipDisplayLayoutState.getDisplayLayout().densityDpi()
+                            != layout.densityDpi());
             if (densityDpiChanged) {
                 // Using PipMotionHelper#movePip directly here may cause race condition since
                 // the app content in PiP mode may or may not be updated for the new density dpi.
@@ -1146,6 +1147,11 @@ public class PipController implements PipTransitionController.PipTransitionCallb
 
         // Update the display layout
         mPipDisplayLayoutState.rotateTo(toRotation);
+        mTouchHandler.updateMinMaxSize(mPipBoundsState.getAspectRatio());
+
+        postChangeStackBounds.set(0, 0,
+                (int) (mPipBoundsState.getMaxSize().x * mPipBoundsState.getBoundsScale()),
+                (int) (mPipBoundsState.getMaxSize().y * mPipBoundsState.getBoundsScale()));
 
         // Calculate the stack bounds in the new orientation based on same fraction along the
         // rotated movement bounds.
diff --git a/libs/WindowManager/Shell/tests/flicker/pip/src/com/android/wm/shell/flicker/pip/EnterPipToOtherOrientation.kt b/libs/WindowManager/Shell/tests/flicker/pip/src/com/android/wm/shell/flicker/pip/EnterPipToOtherOrientation.kt
index 8207b85c3e0c9af5f430489c6741d1f8c6dfd6e7..07cd682610838130744e45562cf5deed53d20860 100644
--- a/libs/WindowManager/Shell/tests/flicker/pip/src/com/android/wm/shell/flicker/pip/EnterPipToOtherOrientation.kt
+++ b/libs/WindowManager/Shell/tests/flicker/pip/src/com/android/wm/shell/flicker/pip/EnterPipToOtherOrientation.kt
@@ -86,6 +86,8 @@ class EnterPipToOtherOrientation(flicker: LegacyFlickerTest) : PipTransition(fli
                 .withNavOrTaskBarVisible()
                 .withStatusBarVisible()
                 .waitForAndVerify()
+
+            pipApp.tapPipToShowMenu(wmHelper)
         }
     }
 
@@ -194,6 +196,16 @@ class EnterPipToOtherOrientation(flicker: LegacyFlickerTest) : PipTransition(fli
         }
     }
 
+    @Postsubmit
+    @Test
+    fun menuOverlayMatchesTaskSurface() {
+        flicker.assertLayersEnd {
+            val pipAppRegion = visibleRegion(pipApp)
+            val pipMenuRegion = visibleRegion(ComponentNameMatcher.PIP_MENU_OVERLAY)
+            pipAppRegion.coversExactly(pipMenuRegion.region)
+        }
+    }
+
     /** {@inheritDoc} */
     @FlakyTest(bugId = 267424412)
     @Test
diff --git a/tests/FlickerTests/test-apps/app-helpers/src/com/android/server/wm/flicker/helpers/PipAppHelper.kt b/tests/FlickerTests/test-apps/app-helpers/src/com/android/server/wm/flicker/helpers/PipAppHelper.kt
index 73cc2f2b4d184b8529387d61e1d75958b21cbf7e..f628af14a0b94932f7dc7ed5f6be2b1248e1c799 100644
--- a/tests/FlickerTests/test-apps/app-helpers/src/com/android/server/wm/flicker/helpers/PipAppHelper.kt
+++ b/tests/FlickerTests/test-apps/app-helpers/src/com/android/server/wm/flicker/helpers/PipAppHelper.kt
@@ -340,6 +340,14 @@ open class PipAppHelper(instrumentation: Instrumentation) :
         wmHelper.StateSyncBuilder().withPipGone().withHomeActivityVisible().waitForAndVerify()
     }
 
+    open fun tapPipToShowMenu(wmHelper: WindowManagerStateHelper) {
+        val windowRect = getWindowRect(wmHelper)
+        uiDevice.click(windowRect.centerX(), windowRect.centerY())
+        // search and interact with the dismiss button
+        val dismissSelector = By.res(SYSTEMUI_PACKAGE, "dismiss")
+        uiDevice.wait(Until.hasObject(dismissSelector), FIND_TIMEOUT)
+    }
+
     /** Close the pip window by pressing the expand button */
     fun expandPipWindowToApp(wmHelper: WindowManagerStateHelper) {
         val windowRect = getWindowRect(wmHelper)