diff --git a/core/src/resolve-module.ts b/core/src/resolve-module.ts
index 13f414b5ce..ae27f69a22 100644
--- a/core/src/resolve-module.ts
+++ b/core/src/resolve-module.ts
@@ -659,6 +659,11 @@ export class ModuleResolver {
       context: configContext,
       contextOpts: {
         allowPartial: false,
+        // Modules will be converted to actions later, and the actions will be properly unescaped.
+        // We avoid premature un-escaping here,
+        // because otherwise it will strip the escaped value in the module config
+        // to the normal template string in the converted action config.
+        unescape: false,
       },
       // Note: We're not implementing the YAML source mapping for modules
       source: undefined,
diff --git a/core/src/template-string/template-string.ts b/core/src/template-string/template-string.ts
index ae5d8ccb91..91524dbb92 100644
--- a/core/src/template-string/template-string.ts
+++ b/core/src/template-string/template-string.ts
@@ -120,6 +120,15 @@ export const resolveTemplateString = profile(function resolveTemplateString({
     return string
   }
 
+  const shouldUnescape = (ctxOpts: ContextResolveOpts) => {
+    // Explicit non-escaping takes the highest priority.
+    if (ctxOpts.unescape === false) {
+      return false
+    }
+
+    return !!ctxOpts.unescape || !contextOpts.allowPartial
+  }
+
   try {
     const parsed = parser.parse(string, {
       getKey: (key: string[], resolveOpts?: ContextResolveOpts) => {
@@ -135,7 +144,7 @@ export const resolveTemplateString = profile(function resolveTemplateString({
       missingKeyExceptionType,
       passthroughExceptionType,
       allowPartial: !!contextOpts.allowPartial,
-      unescape: !!contextOpts.unescape || !contextOpts.allowPartial,
+      unescape: shouldUnescape(contextOpts),
       escapePrefix,
       optionalSuffix: "}?",
       isPlainObject,