diff --git a/code/game/atom/atom_color.dm b/code/game/atom/atom_color.dm
index 3c01429efc4..95790b51aa1 100644
--- a/code/game/atom/atom_color.dm
+++ b/code/game/atom/atom_color.dm
@@ -123,4 +123,17 @@
 	overlay.color = color
 	if (!cached_color_filter)
 		return overlay
-	return filter_appearance_recursive(overlay, cached_color_filter)
+	// Apply the atom's color filter to the overlay using named filters so that
+	// later calls to add_filter/update_filters (e.g., height displacement filters)
+	// do not wipe out our coloration. Mirror prior behavior by propagating to
+	// child overlays unless KEEP_TOGETHER is present.
+	overlay.add_filter(ATOM_PRIORITY_COLOR_FILTER, ATOM_PRIORITY_COLOR_FILTER_PRIORITY, cached_color_filter)
+
+	if(!(overlay.appearance_flags & KEEP_TOGETHER))
+		// Recursively ensure any nested overlays/underlays also get the color filter
+		for(var/mutable_appearance/child_overlay as anything in overlay.overlays)
+			color_atom_overlay(child_overlay)
+		for(var/mutable_appearance/child_underlay as anything in overlay.underlays)
+			color_atom_overlay(child_underlay)
+
+	return overlay