[Api] Fix empty tracestate extraction

src/OpenTelemetry.Api/CHANGELOG.md

@@ -6,6 +6,10 @@ Notes](../../RELEASENOTES.md).
 
 ## Unreleased
 
+* Fixed `TraceContextPropagator` to normalize empty `tracestate` header values
+  to `null` when extracting trace context.
+  ([#7407](https://github.com/open-telemetry/opentelemetry-dotnet/pull/7407))
+
 ## 1.16.0
 
 Released 2026-Jun-10

src/OpenTelemetry.Api/Context/Propagation/TraceContextPropagator.cs

@@ -69,8 +69,8 @@ public override PropagationContext Extract<T>(PropagationContext context, T carr
             }
 
             string? tracestate = null;
-            TryExtractTracestate(getter(carrier, TraceState), out var extractedTracestate, out var hasTraceState);
-            if (hasTraceState)
+            var extracted = TryExtractTracestate(getter(carrier, TraceState), out var extractedTracestate, out var hasTraceState);
+            if (hasTraceState && (!extracted || extractedTracestate.Length > 0))
             {
                 tracestate = extractedTracestate;
             }

test/OpenTelemetry.Tests/Trace/Propagation/TraceContextPropagatorTests.cs

@@ -154,6 +154,24 @@ public void TracestateToStringEmpty()
         Assert.Null(context.ActivityContext.TraceState);
     }
 
+    [Theory]
+    [InlineData("")]
+    [InlineData(" ")]
+    [InlineData(" ,  ")]
+    public void TracestateToStringEmptyHeaderValue(string traceState)
+    {
+        var headers = new Dictionary<string, string>
+        {
+            { TraceParent, $"00-{TraceId}-{SpanId}-01" },
+            { TraceState, traceState },
+        };
+
+        var propagator = new TraceContextPropagator();
+        var context = propagator.Extract(default, headers, Getter);
+
+        Assert.Null(context.ActivityContext.TraceState);
+    }
+
     [Fact]
     public void TracestateToString()
     {