diff --git a/packages/excalidraw/element/binding.ts b/packages/excalidraw/element/binding.ts
index b9aa72ff2..31e1212fb 100644
--- a/packages/excalidraw/element/binding.ts
+++ b/packages/excalidraw/element/binding.ts
@@ -29,7 +29,12 @@ import type {
 } from "./types";
 
 import type { Bounds } from "./bounds";
-import { getCenterForBounds, getElementAbsoluteCoords } from "./bounds";
+import {
+  getCenterForBounds,
+  getElementAbsoluteCoords,
+  getElementBounds,
+  doBoundsIntersect,
+} from "./bounds";
 import type { AppState } from "../types";
 import { isPointOnShape } from "../../utils/collision";
 import { getElementAtPosition } from "../scene";
@@ -599,6 +604,21 @@ export const updateBoundElements = (
       return;
     }
 
+    // Check for intersections before updating bound elements incase connected elements overlap
+    const startBindingElement = element.startBinding
+      ? elementsMap.get(element.startBinding.elementId)
+      : null;
+    const endBindingElement = element.endBinding
+      ? elementsMap.get(element.endBinding.elementId)
+      : null;
+
+    let startBounds: Bounds | null = null;
+    let endBounds: Bounds | null = null;
+    if (startBindingElement && endBindingElement) {
+      startBounds = getElementBounds(startBindingElement, elementsMap);
+      endBounds = getElementBounds(endBindingElement, elementsMap);
+    }
+
     const bindings = {
       startBinding: maybeCalculateNewGapWhenScaling(
         changedElement,
@@ -627,10 +647,11 @@ export const updateBoundElements = (
           isBindableElement(bindableElement) &&
           (bindingProp === "startBinding" || bindingProp === "endBinding") &&
           (changedElement.id === element[bindingProp]?.elementId ||
-            changedElement.id ===
+            (changedElement.id ===
               element[
                 bindingProp === "startBinding" ? "endBinding" : "startBinding"
-              ]?.elementId)
+              ]?.elementId &&
+              !doBoundsIntersect(startBounds, endBounds)))
         ) {
           const point = updateBoundPoint(
             element,
diff --git a/packages/excalidraw/element/bounds.ts b/packages/excalidraw/element/bounds.ts
index 6fedd4113..276448d55 100644
--- a/packages/excalidraw/element/bounds.ts
+++ b/packages/excalidraw/element/bounds.ts
@@ -994,3 +994,17 @@ export const getCenterForBounds = (bounds: Bounds): GlobalPoint =>
     bounds[0] + (bounds[2] - bounds[0]) / 2,
     bounds[1] + (bounds[3] - bounds[1]) / 2,
   );
+
+export const doBoundsIntersect = (
+  bounds1: Bounds | null,
+  bounds2: Bounds | null,
+): boolean => {
+  if (bounds1 == null || bounds2 == null) {
+    return false;
+  }
+
+  const [minX1, minY1, maxX1, maxY1] = bounds1;
+  const [minX2, minY2, maxX2, maxY2] = bounds2;
+
+  return minX1 < maxX2 && maxX1 > minX2 && minY1 < maxY2 && maxY1 > minY2;
+};