diff --git a/code/e2e-tests/addon-docs.spec.ts b/code/e2e-tests/addon-docs.spec.ts
index 0f318f9f657d..ba04d5c99632 100644
--- a/code/e2e-tests/addon-docs.spec.ts
+++ b/code/e2e-tests/addon-docs.spec.ts
@@ -85,7 +85,7 @@ test.describe('addon-docs', () => {
   test('should provide source snippet', async ({ page }) => {
     // templateName is e.g. 'Vue-CLI (Default JS)'
     test.skip(
-      /^(vue3|vue-cli|preact)/i.test(`${templateName}`),
+      /^(vue-cli|preact)/i.test(`${templateName}`),
       `Skipping ${templateName}, which does not support dynamic source snippets`
     );
 
@@ -111,7 +111,6 @@ test.describe('addon-docs', () => {
 
   test('source snippet should not change in stories block', async ({ page }) => {
     const skipped = [
-      'vue3',
       'vue-cli',
       'preact',
       // SSv6 does not render stories in the correct order in our sandboxes
@@ -157,6 +156,42 @@ test.describe('addon-docs', () => {
     await expect(storiesCode).toContainText('Basic');
   });
 
+  test('source snippet should change back to previous value in stories block', async ({ page }) => {
+    test.skip(
+      /^(lit|vue-cli|preact|angular|internal\/ssv6|ca)/i.test(`${templateName}`),
+      `Skipping ${templateName}, which does not support dynamic source snippets`
+    );
+
+    const sbPage = new SbPage(page);
+    await sbPage.navigateToStory('addons/docs/docspage/basic', 'docs');
+    const root = sbPage.previewRoot();
+    const toggles = root.locator('.docblock-code-toggle');
+
+    const toggle = await toggles.nth(0);
+    await toggle.click({ force: true });
+
+    const codes = root.locator('pre.prismjs');
+
+    const code = await codes.nth(0);
+    const text = await code.innerText();
+
+    await expect(text).toContain('Basic');
+
+    const labelControl = root.locator('textarea[name=label]');
+    labelControl.fill('Changed');
+    labelControl.blur();
+
+    // Check the Primary one has changed
+    await expect(code).toContainText('Changed');
+
+    // Change the value back
+    labelControl.fill('Basic');
+    labelControl.blur();
+
+    // Check the Primary one has changed back
+    await expect(code).toContainText('Basic');
+  });
+
   test('should not run autoplay stories without parameter', async ({ page }) => {
     const sbPage = new SbPage(page);
     await sbPage.navigateToStory('addons/docs/docspage/autoplay', 'docs');
diff --git a/code/ui/blocks/src/blocks/SourceContainer.tsx b/code/ui/blocks/src/blocks/SourceContainer.tsx
index a2359ea103a2..c24b320c4330 100644
--- a/code/ui/blocks/src/blocks/SourceContainer.tsx
+++ b/code/ui/blocks/src/blocks/SourceContainer.tsx
@@ -1,7 +1,6 @@
 import type { FC, Context, PropsWithChildren } from 'react';
 import React, { createContext, useEffect, useState } from 'react';
 
-import { dequal as deepEqual } from 'dequal';
 import type { Channel } from '@storybook/channels';
 
 import { SNIPPET_RENDERED } from '@storybook/docs-tools';
@@ -64,11 +63,14 @@ export const SourceContainer: FC<PropsWithChildren<{ channel: Channel }>> = ({
         : idOrEvent;
 
       const hash = args ? argsHash(args) : UNKNOWN_ARGS_HASH;
-
-      // optimization: if the source is the same, ignore the incoming event
-      if (sources[id] && sources[id][hash] && sources[id][hash].code === source) {
-        return;
-      }
+      // FIXME: In SB8.0 when we remove the Source block deprecations,
+      // we should restore this optimizationand make the Source block
+      // smarter about understanding when its args change.
+      //
+      // See https://github.com/storybookjs/storybook/pull/22807
+      //
+      // optimization: don't update if the source is the same
+      // if (deepEqual(currentSource, { code: source, format })) return;
 
       setSources((current) => {
         const newSources = {
@@ -79,10 +81,7 @@ export const SourceContainer: FC<PropsWithChildren<{ channel: Channel }>> = ({
           },
         };
 
-        if (!deepEqual(current, newSources)) {
-          return newSources;
-        }
-        return current;
+        return newSources;
       });
     };