diff --git a/x-pack/elastic-agent/CHANGELOG.next.asciidoc b/x-pack/elastic-agent/CHANGELOG.next.asciidoc
index b1f7c0d63bc5..27107206b32b 100644
--- a/x-pack/elastic-agent/CHANGELOG.next.asciidoc
+++ b/x-pack/elastic-agent/CHANGELOG.next.asciidoc
@@ -35,6 +35,7 @@
 - Fixed fetching DBus service PID {pull}23496[23496]
 - Fix issue of missing log messages from filebeat monitor {pull}23514[23514]
 - Increase checkin grace period to 30 seconds {pull}23568[23568]
+- Fix libbeat from reporting back degraded on config update {pull}23537[23537]
 
 ==== New features
 
diff --git a/x-pack/elastic-agent/pkg/core/monitoring/beats/beats_monitor.go b/x-pack/elastic-agent/pkg/core/monitoring/beats/beats_monitor.go
index 19298aef69ca..5944afa4f0cc 100644
--- a/x-pack/elastic-agent/pkg/core/monitoring/beats/beats_monitor.go
+++ b/x-pack/elastic-agent/pkg/core/monitoring/beats/beats_monitor.go
@@ -144,7 +144,12 @@ func (b *Monitor) Cleanup(spec program.Spec, pipelineID string) error {
 
 // Prepare executes steps in order for monitoring to work correctly
 func (b *Monitor) Prepare(spec program.Spec, pipelineID string, uid, gid int) error {
-	takeOwnership := b.ownLoggingPath(spec)
+	if !b.ownLoggingPath(spec) {
+		// spec file passes a log path; so its up to the application to ensure the
+		// path exists and the write permissions are set so Elastic Agent can read it
+		return nil
+	}
+
 	drops := []string{b.generateLoggingPath(spec, pipelineID)}
 	if drop := b.monitoringDrop(spec, pipelineID); drop != "" {
 		drops = append(drops, drop)
@@ -167,10 +172,8 @@ func (b *Monitor) Prepare(spec program.Spec, pipelineID string, uid, gid int) er
 			}
 		}
 
-		if takeOwnership {
-			if err := changeOwner(drop, uid, gid); err != nil {
-				return err
-			}
+		if err := changeOwner(drop, uid, gid); err != nil {
+			return err
 		}
 	}
 
diff --git a/x-pack/elastic-agent/pkg/core/plugin/process/status.go b/x-pack/elastic-agent/pkg/core/plugin/process/status.go
index eac8f2bc53e5..473ae9a70c77 100644
--- a/x-pack/elastic-agent/pkg/core/plugin/process/status.go
+++ b/x-pack/elastic-agent/pkg/core/plugin/process/status.go
@@ -35,9 +35,6 @@ func (a *Application) OnStatusChange(s *server.ApplicationState, status proto.St
 			return
 		}
 
-		// it was a crash, cleanup anything required
-		go a.cleanUp()
-
 		// kill the process
 		if a.state.ProcessInfo != nil {
 			_ = a.state.ProcessInfo.Process.Kill()
diff --git a/x-pack/libbeat/management/fleet/manager.go b/x-pack/libbeat/management/fleet/manager.go
index dc0185a04ace..8aec0af1800b 100644
--- a/x-pack/libbeat/management/fleet/manager.go
+++ b/x-pack/libbeat/management/fleet/manager.go
@@ -169,7 +169,7 @@ func (cm *Manager) OnConfig(s string) {
 
 	if errs := cm.apply(blocks); !errs.IsEmpty() {
 		// `cm.apply` already logs the errors; currently allow beat to run degraded
-		cm.UpdateStatus(management.Degraded, errs.Error())
+		cm.UpdateStatus(management.Failed, errs.Error())
 		return
 	}