diff --git a/include/sway/config.h b/include/sway/config.h
index d9f561571..f8007c92e 100644
--- a/include/sway/config.h
+++ b/include/sway/config.h
@@ -296,14 +296,6 @@ struct output_config {
 	char *background_fallback;
 };
 
-/**
- * An output config pre-matched to an output
- */
-struct matched_output_config {
-	struct sway_output *output;
-	struct output_config *config;
-};
-
 /**
  * Stores size of gaps for each side
  */
@@ -693,14 +685,11 @@ const char *sway_output_scale_filter_to_string(enum scale_filter_mode scale_filt
 
 struct output_config *new_output_config(const char *name);
 
-bool apply_output_configs(struct matched_output_config *configs,
-		size_t configs_len, bool test_only, bool degrade_to_off);
+bool apply_output_configs(struct output_config **ocs, size_t ocs_len,
+		bool test_only, bool degrade_to_off);
 
 void apply_all_output_configs(void);
 
-void sort_output_configs_by_priority(struct matched_output_config *configs,
-		size_t configs_len);
-
 /**
  * store_output_config stores a new output config. An output may be matched by
  * three different config types, in order of precedence: Identifier, name and
diff --git a/sway/config/output.c b/sway/config/output.c
index 46a0ffd3a..5006a385e 100644
--- a/sway/config/output.c
+++ b/sway/config/output.c
@@ -584,9 +584,11 @@ static bool finalize_output_config(struct output_config *oc, struct sway_output
 	return true;
 }
 
-// find_output_config returns a merged output_config containing all stored
-// configuration that applies to the specified output.
-struct output_config *find_output_config(struct sway_output *sway_output) {
+// find_output_config_from_list returns a merged output_config containing all
+// stored configuration that applies to the specified output.
+static struct output_config *find_output_config_from_list(
+		struct output_config **configs, size_t configs_len,
+		struct sway_output *sway_output) {
 	const char *name = sway_output->wlr_output->name;
 	struct output_config *result = new_output_config(name);
 	if (result == NULL) {
@@ -611,8 +613,8 @@ struct output_config *find_output_config(struct sway_output *sway_output) {
 	struct output_config *oc = NULL;
 	const char *names[] = {"*", name, id, NULL};
 	for (const char **name = &names[0]; *name; name++) {
-		for (int idx = 0; idx < config->output_configs->length; idx++) {
-			oc = config->output_configs->items[idx];
+		for (size_t idx = 0; idx < configs_len; idx++) {
+			oc = configs[idx];
 			if (strcmp(oc->name, *name) == 0) {
 				merge_output_config(result, oc);
 			}
@@ -622,6 +624,12 @@ struct output_config *find_output_config(struct sway_output *sway_output) {
 	return result;
 }
 
+struct output_config *find_output_config(struct sway_output *sway_output) {
+	return find_output_config_from_list(
+			(struct output_config **)config->output_configs->items,
+			config->output_configs->length, sway_output);
+}
+
 static bool config_has_manual_mode(struct output_config *oc) {
 	if (!oc) {
 		return false;
@@ -634,6 +642,14 @@ static bool config_has_manual_mode(struct output_config *oc) {
 	return false;
 }
 
+/**
+ * An output config pre-matched to an output
+ */
+struct matched_output_config {
+	struct sway_output *output;
+	struct output_config *config;
+};
+
 struct search_context {
 	struct wlr_output_swapchain_manager *swapchain_mgr;
 	struct wlr_backend_output_state *states;
@@ -852,12 +868,12 @@ static int compare_matched_output_config_priority(const void *a, const void *b)
 	return 0;
 }
 
-void sort_output_configs_by_priority(struct matched_output_config *configs,
-		size_t configs_len) {
+static void sort_output_configs_by_priority(
+		struct matched_output_config *configs, size_t configs_len) {
 	qsort(configs, configs_len, sizeof(*configs), compare_matched_output_config_priority);
 }
 
-bool apply_output_configs(struct matched_output_config *configs,
+static bool apply_resolved_output_configs(struct matched_output_config *configs,
 		size_t configs_len, bool test_only, bool degrade_to_off) {
 	struct wlr_backend_output_state *states = calloc(configs_len, sizeof(*states));
 	if (!states) {
@@ -965,11 +981,12 @@ out:
 	return ok;
 }
 
-void apply_all_output_configs(void) {
+bool apply_output_configs(struct output_config **ocs, size_t ocs_len,
+		bool test_only, bool degrade_to_off) {
 	size_t configs_len = wl_list_length(&root->all_outputs);
 	struct matched_output_config *configs = calloc(configs_len, sizeof(*configs));
 	if (!configs) {
-		return;
+		return false;
 	}
 
 	int config_idx = 0;
@@ -982,16 +999,22 @@ void apply_all_output_configs(void) {
 
 		struct matched_output_config *config = &configs[config_idx++];
 		config->output = sway_output;
-		config->config = find_output_config(sway_output);
+		config->config = find_output_config_from_list(ocs, ocs_len, sway_output);
 	}
 
 	sort_output_configs_by_priority(configs, configs_len);
-	apply_output_configs(configs, configs_len, false, true);
+	bool ok = apply_resolved_output_configs(configs, configs_len, test_only, degrade_to_off);
 	for (size_t idx = 0; idx < configs_len; idx++) {
 		struct matched_output_config *cfg = &configs[idx];
 		free_output_config(cfg->config);
 	}
 	free(configs);
+	return ok;
+}
+
+void apply_all_output_configs(void) {
+	apply_output_configs((struct output_config **)config->output_configs->items,
+			config->output_configs->length, false, true);
 }
 
 void free_output_config(struct output_config *oc) {
diff --git a/sway/desktop/output.c b/sway/desktop/output.c
index 8711a2481..8ce31d859 100644
--- a/sway/desktop/output.c
+++ b/sway/desktop/output.c
@@ -544,9 +544,8 @@ void handle_new_output(struct wl_listener *listener, void *data) {
 }
 
 static struct output_config *output_config_for_config_head(
-		struct wlr_output_configuration_head_v1 *config_head,
-		struct sway_output *output) {
-	struct output_config *oc = new_output_config(output->wlr_output->name);
+		struct wlr_output_configuration_head_v1 *config_head) {
+	struct output_config *oc = new_output_config(config_head->state.output->name);
 	oc->enabled = config_head->state.enabled;
 	if (!oc->enabled) {
 		return oc;
@@ -572,67 +571,48 @@ static struct output_config *output_config_for_config_head(
 }
 
 static void output_manager_apply(struct sway_server *server,
-		struct wlr_output_configuration_v1 *config, bool test_only) {
-	size_t configs_len = wl_list_length(&root->all_outputs);
-	struct matched_output_config *configs = calloc(configs_len, sizeof(*configs));
+		struct wlr_output_configuration_v1 *cfg, bool test_only) {
+	bool ok = false;
+	size_t configs_len = config->output_configs->length + wl_list_length(&cfg->heads);
+	struct output_config **configs = calloc(configs_len, sizeof(*configs));
 	if (!configs) {
-		return;
+		goto done;
+	}
+	size_t start_new_configs = config->output_configs->length;
+	for (size_t idx = 0; idx < start_new_configs; idx++) {
+		configs[idx] = config->output_configs->items[idx];
 	}
 
-	int config_idx = 0;
-	struct sway_output *sway_output;
-	wl_list_for_each(sway_output, &root->all_outputs, link) {
-		if (sway_output == root->fallback_output) {
-			configs_len--;
-			continue;
-		}
-
-		struct matched_output_config *cfg = &configs[config_idx++];
-		cfg->output = sway_output;
-
-		struct wlr_output_configuration_head_v1 *config_head;
-		wl_list_for_each(config_head, &config->heads, link) {
-			if (config_head->state.output == sway_output->wlr_output) {
-				cfg->config = output_config_for_config_head(config_head, sway_output);
-				break;
-			}
-		}
-		if (!cfg->config) {
-			cfg->config = find_output_config(sway_output);
-		}
+	size_t config_idx = start_new_configs;
+	struct wlr_output_configuration_head_v1 *config_head;
+	wl_list_for_each(config_head, &cfg->heads, link) {
+		// Generate the configuration and store it as a temporary
+		// config. We keep a record of it so we can remove it later.
+		struct output_config *oc = output_config_for_config_head(config_head);
+		configs[config_idx++] = oc;
 	}
 
-	sort_output_configs_by_priority(configs, configs_len);
-	bool ok = apply_output_configs(configs, configs_len, test_only, false);
-	for (size_t idx = 0; idx < configs_len; idx++) {
-		struct matched_output_config *cfg = &configs[idx];
-
-		// Only store new configs for successful non-test commits. Old configs,
-		// test-only and failed commits just get freed.
-		bool store_config = false;
+	// Try to commit without degrade to off enabled. Note that this will fail
+	// if any output configured for enablement fails to be enabled, even if it
+	// was not part of the config heads we were asked to configure.
+	ok = apply_output_configs(configs, configs_len, test_only, false);
+	for (size_t idx = start_new_configs; idx < configs_len; idx++) {
+		struct output_config *cfg = configs[idx];
 		if (!test_only && ok) {
-			struct wlr_output_configuration_head_v1 *config_head;
-			wl_list_for_each(config_head, &config->heads, link) {
-				if (config_head->state.output == cfg->output->wlr_output) {
-					store_config = true;
-					break;
-				}
-			}
-		}
-		if (store_config) {
-			store_output_config(cfg->config);
+			store_output_config(cfg);
 		} else {
-			free_output_config(cfg->config);
+			free_output_config(cfg);
 		}
 	}
 	free(configs);
 
+done:
 	if (ok) {
-		wlr_output_configuration_v1_send_succeeded(config);
+		wlr_output_configuration_v1_send_succeeded(cfg);
 	} else {
-		wlr_output_configuration_v1_send_failed(config);
+		wlr_output_configuration_v1_send_failed(cfg);
 	}
-	wlr_output_configuration_v1_destroy(config);
+	wlr_output_configuration_v1_destroy(cfg);
 }
 
 void handle_output_manager_apply(struct wl_listener *listener, void *data) {