diff --git a/src/Menu.cpp b/src/Menu.cpp
index 0c69343e75..e53f1fcb59 100644
--- a/src/Menu.cpp
+++ b/src/Menu.cpp
@@ -954,6 +954,10 @@ void Menu::ProcessInputEventQueue()
 			logger::trace("Detected key code {} ({})", event.keyCode, key);
 			if (key == event.keyCode)
 				key = MapVirtualKeyEx(event.keyCode, MAPVK_VSC_TO_VK_EX, GetKeyboardLayout(0));
+
+			const bool wasCapturingHotkey = IsCapturingHotkeyInput();
+			const bool allowSetupCloseKey = wasCapturingHotkey && HomePageRenderer::ShouldShowFirstTimeSetup() &&
+			                                (key == VK_RETURN || key == VK_ESCAPE);
 			if (!event.IsPressed()) {
 				// Skip key release if it was used to close the first-time setup dialog
 				if (HomePageRenderer::ShouldSkipKeyRelease(key)) {
@@ -1028,7 +1032,13 @@ void Menu::ProcessInputEventQueue()
 						std::function<void()> action;
 					};
 					KeyAction keyActions[] = {
-						{ settings.ToggleKey, [this]() { if (!HomePageRenderer::ShouldShowFirstTimeSetup()) IsEnabled = !IsEnabled; } },
+						{ settings.ToggleKey, [this]() {
+							 if (!HomePageRenderer::ShouldShowFirstTimeSetup()) {
+								 IsEnabled = !IsEnabled;
+								 if (IsEnabled)
+									 ImGui::GetIO().ClearInputKeys();  // Prevent toggle key from remaining "held" in ImGui after open.
+							 }
+						 } },
 						{ settings.SkipCompilationKey, [this, shaderCache]() { if (!ShouldSwallowInput() && shaderCache->IsCompiling()) shaderCache->backgroundCompilation = true; } },
 						{ settings.EffectToggleKey, [shaderCache]() { shaderCache->SetEnabled(!shaderCache->IsEnabled()); } },
 						{ settings.ShaderBlockPrevKey, [this, shaderCache]() { if (settings.EnableShaderBlocking) shaderCache->IterateShaderBlock(); } },
@@ -1080,9 +1090,13 @@ void Menu::ProcessInputEventQueue()
 			bool isHotkey = ShouldSwallowInput() && std::any_of(std::begin(hotkeys), std::end(hotkeys),
 														[key](const auto* combo) { return InputCombo::MatchesKeyboardCombo(*combo, key); });
 
-			if (!isHotkey) {
+			// Always forward key-up events. Suppress key-down during active hotkeys,
+			// and during hotkey capture except setup close keys (Enter/Escape).
+			const bool isKeyDown = event.IsPressed();
+			const bool suppressForwarding = isKeyDown && (isHotkey || (wasCapturingHotkey && !allowSetupCloseKey));
+			if (!suppressForwarding) {
 				// DirectInput loses key-up events after alt-tab; validate against OS state.
-				bool pressed = event.IsPressed() && (GetAsyncKeyState(key) & Constants::KEY_PRESSED_MASK);
+				bool pressed = isKeyDown && (GetAsyncKeyState(key) & Constants::KEY_PRESSED_MASK);
 				io.AddKeyEvent(Util::Input::VirtualKeyToImGuiKey(key), pressed);
 
 				if (key == VK_LCONTROL || key == VK_RCONTROL)
@@ -1098,6 +1112,12 @@ void Menu::ProcessInputEventQueue()
 	_keyEventQueue.clear();
 }
 
+bool Menu::IsCapturingHotkeyInput() const
+{
+	return settingToggleKey || settingSkipCompilationKey || settingsEffectsToggle ||
+	       settingOverlayToggleKey || settingShaderBlockPrevKey || settingShaderBlockNextKey || settingWeatherEditorToggleKey;
+}
+
 void Menu::addToEventQueue(KeyEvent e)
 {
 	std::unique_lock<std::shared_mutex> mutex(_inputEventMutex);
diff --git a/src/Menu.h b/src/Menu.h
index 61d5861c34..37f4c3d5e0 100644
--- a/src/Menu.h
+++ b/src/Menu.h
@@ -501,5 +501,6 @@ class Menu
 
 	void addToEventQueue(KeyEvent e);
 	void ProcessInputEventQueue();
+	bool IsCapturingHotkeyInput() const;
 	winrt::com_ptr<IDXGIAdapter3> dxgiAdapter3;
 };
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