diff --git a/src/cmd/ksh93/sh/subshell.c b/src/cmd/ksh93/sh/subshell.c
index dd0e26d02..0b31429cd 100644
--- a/src/cmd/ksh93/sh/subshell.c
+++ b/src/cmd/ksh93/sh/subshell.c
@@ -187,7 +187,6 @@ void sh_subfork(void)
 	else
 	{
 		/* this is the child part of the fork */
-		sh_onstate(SH_FORKED);
 		/*
 		 * $RANDOM is only reseeded when it's used in a subshell, so if $RANDOM hasn't
 		 * been reseeded yet set rp->rand_last to -2. This allows sh_save_rand_seed()
diff --git a/src/cmd/ksh93/sh/xec.c b/src/cmd/ksh93/sh/xec.c
index 65c3c805c..08f485985 100644
--- a/src/cmd/ksh93/sh/xec.c
+++ b/src/cmd/ksh93/sh/xec.c
@@ -1993,7 +1993,11 @@ int sh_exec(register const Shnode_t *t, int flags)
 				t = t->lst.lstrit;
 			}
 			while(t->tre.tretyp == TLST);
-			sh_exec(t,flags);
+			/*
+			 * if sh_state(SH_FORKED) was turned on in the meantime, mix it in to the flags to allow a last-command
+			 * no_fork optimization via execflg2 -- this happens when a subshell forks mid-execution (sh_subfork())
+			 */
+			sh_exec(t,flags|sh_isstate(SH_FORKED));
 			break;
 		    }
 
diff --git a/src/cmd/ksh93/tests/basic.sh b/src/cmd/ksh93/tests/basic.sh
index 7fc2207cf..31fb6336d 100755
--- a/src/cmd/ksh93/tests/basic.sh
+++ b/src/cmd/ksh93/tests/basic.sh
@@ -927,5 +927,15 @@ AIX | SunOS)
 	;;
 esac
 
+# ======
+(
+	ulimit -t unlimited 2>/dev/null
+	print "${.sh.pid:-$("$SHELL" -c 'echo "$PPID"')}"  # fallback for pre-93u+m ksh without ${.sh.pid}
+	"$SHELL" -c 'print "$$"'
+) >out
+pid1= pid2=
+{ read pid1 && read pid2; } <out && let "pid1 == pid2" \
+|| err_exit "last command in forked subshell not exec-optimized ($pid1 != $pid2)"
+
 # ======
 exit $((Errors<125?Errors:125))