diff --git a/packages/project/lib/graph/ProjectDefinitionWatcher.js b/packages/project/lib/graph/ProjectDefinitionWatcher.js
index d9a13549128..ad710ecda01 100644
--- a/packages/project/lib/graph/ProjectDefinitionWatcher.js
+++ b/packages/project/lib/graph/ProjectDefinitionWatcher.js
@@ -230,13 +230,13 @@ class ProjectDefinitionWatcher extends EventEmitter {
 		}
 
 		try {
+			this.#cancelSettleTimer();
+
 			// Tear down the current subscriptions and re-subscribe the same watch set. The include
 			// set (#watchedFiles / #watchDirs) is unchanged; only the OS-level handles are renewed.
 			// Teardown failures are ignored here: the handles are discarded either way, and the
 			// re-subscribe below is what decides whether recovery succeeded.
-			const subscriptions = this.#subscriptions;
-			this.#subscriptions = [];
-			await drainSubscriptions(subscriptions);
+			await this.#drainSubscriptions();
 			if (this.#destroyed) {
 				return;
 			}
@@ -259,19 +259,29 @@ class ProjectDefinitionWatcher extends EventEmitter {
 	 */
 	async destroy() {
 		this.#destroyed = true;
+		this.#cancelSettleTimer();
+		const failures = await this.#drainSubscriptions();
+		if (failures.length) {
+			const err = new AggregateError(failures, "Failed to unsubscribe one or more definition watchers");
+			this.emit("error", err);
+		}
+	}
+
+	// Cancels a pending settle timer, if any. Safe to call when no timer is armed.
+	#cancelSettleTimer() {
 		if (this.#settleTimer) {
 			clearTimeout(this.#settleTimer);
 			this.#settleTimer = null;
 		}
-		// Drain the subscriptions list first so a second destroy() is a no-op and a partial failure
-		// cannot leave stale handles to be unsubscribed twice.
+	}
+
+	// Snapshots and clears the subscriptions list before draining it, so a second drain (a second
+	// destroy(), or a destroy() racing recovery) is a no-op and a partial failure cannot leave stale
+	// handles to be unsubscribed twice. Returns the unsubscribe failures for callers that report them.
+	async #drainSubscriptions() {
 		const subscriptions = this.#subscriptions;
 		this.#subscriptions = [];
-		const failures = await drainSubscriptions(subscriptions);
-		if (failures.length) {
-			const err = new AggregateError(failures, "Failed to unsubscribe one or more definition watchers");
-			this.emit("error", err);
-		}
+		return drainSubscriptions(subscriptions);
 	}
 }
 
diff --git a/packages/project/test/lib/graph/ProjectDefinitionWatcher.js b/packages/project/test/lib/graph/ProjectDefinitionWatcher.js
index ebf385a03df..15469eb36e8 100644
--- a/packages/project/test/lib/graph/ProjectDefinitionWatcher.js
+++ b/packages/project/test/lib/graph/ProjectDefinitionWatcher.js
@@ -454,6 +454,44 @@ test.serial("recovery: a watcher error tears down and re-subscribes", async (t)
 	await watcher.destroy();
 });
 
+test.serial("recovery: pending settle timer is cancelled before teardown", async (t) => {
+	const sub1 = createMockSubscription();
+	const sub2 = createMockSubscription();
+	let cb;
+	subscribeStub.onFirstCall().callsFake(async (_dir, callback) => {
+		cb = callback;
+		return sub1;
+	});
+	subscribeStub.onSecondCall().resolves(sub2);
+
+	const graph = createGraph({name: "root", rootPath: fixturePath("/app")});
+	const watcher = await ProjectDefinitionWatcher.create({graph});
+	const ui5YamlPath = fixtureFile("/app", "ui5.yaml");
+
+	const emitted = [];
+	watcher.on("definitionChanged", (e) => emitted.push(e));
+
+	const clock = sinon.useFakeTimers();
+	// Open a burst so the settle timer is armed.
+	cb(null, [{type: "update", path: ui5YamlPath}]);
+	clock.tick(100);
+
+	// Watcher error fires while the timer is still pending.
+	cb(new Error("Failed to read changes"));
+
+	// Restore real timers before awaiting recovery so async callbacks can proceed.
+	clock.restore();
+	await new Promise((resolve) => setImmediate(resolve));
+
+	// The old subscription is torn down and a new one created.
+	t.true(sub1.unsubscribe.calledOnce, "old subscription torn down");
+	t.is(subscribeStub.callCount, 2, "re-subscribed after recovery");
+
+	t.is(emitted.length, 0, "cancelled settle timer does not fire into the closed watcher handle");
+
+	await watcher.destroy();
+});
+
 test.serial("recovery: loop protection escalates to error after the max attempts", async (t) => {
 	const subs = [];
 	subscribeStub.callsFake(async () => {