diff --git a/changelog/61946.fixed b/changelog/61946.fixed
new file mode 100644
index 000000000000..2ff01bcf48bb
--- /dev/null
+++ b/changelog/61946.fixed
@@ -0,0 +1 @@
+Fix salt-cloud sync_after_install functionality
diff --git a/doc/topics/cloud/misc.rst b/doc/topics/cloud/misc.rst
index 80665cf25298..881553498050 100644
--- a/doc/topics/cloud/misc.rst
+++ b/doc/topics/cloud/misc.rst
@@ -44,13 +44,13 @@ be configured to use SCP instead.
 
 Sync After Install
 ==================
-Salt allows users to create custom modules, grains, and states which can be
-synchronised to minions to extend Salt with further functionality.
+Salt allows users to create custom plugins such as execution, grains, and state
+modules which can be synchronised to minions to extend Salt with further
+functionality.
 
-This option will inform Salt Cloud to synchronise your custom modules, grains,
-states or all these to the minion just after it has been created. For this to
-happen, the following line needs to be added to the main cloud
-configuration file:
+This option will inform Salt Cloud to synchronise your custom modules to the
+minion just after it has been created. For this to happen, the following line
+needs to be added to the main cloud configuration file:
 
 .. code-block:: yaml
 
@@ -60,10 +60,29 @@ The available options for this setting are:
 
 .. code-block:: yaml
 
-    modules
+    all
+    beacons
+    clouds
+    engines
+    executors
     grains
+    log
+    matchers
+    modules
+    output
+    pillar
+    proxymodules
+    renderers
+    returners
+    sdb
+    serializers
     states
-    all
+    thorium
+    utils
+
+A present and non-falsy value that doesn't match one of these list items will
+assume `all`, so `sync_after_install: True` and `sync_after_install: all` are
+equivalent (though the former will produce a warning).
 
 
 Setting Up New Salt Masters
diff --git a/salt/cloud/__init__.py b/salt/cloud/__init__.py
index b17c6bf03e51..eac1447079a0 100644
--- a/salt/cloud/__init__.py
+++ b/salt/cloud/__init__.py
@@ -1225,14 +1225,33 @@ def create(self, vm_, local_master=True):
             ):
                 output = self.clouds[func](vm_)
             if output is not False and "sync_after_install" in self.opts:
-                if self.opts["sync_after_install"] not in (
+                if self.opts["sync_after_install"] and self.opts[
+                    "sync_after_install"
+                ] not in (
                     "all",
+                    "beacons",
+                    "clouds",
+                    "engines",
+                    "executors",
+                    "grains",
+                    "log",
+                    "matchers",
                     "modules",
+                    "output",
+                    "pillar",
+                    "proxymodules",
+                    "renderers",
+                    "returners",
+                    "sdb",
+                    "serializers",
                     "states",
-                    "grains",
+                    "thorium",
+                    "utils",
                 ):
-                    log.error("Bad option for sync_after_install")
-                    return output
+                    log.warning(
+                        "Bad option for sync_after_install. Defaulting to 'all'"
+                    )
+                    self.opts["sync_after_install"] = "all"
 
                 # A small pause helps the sync work more reliably
                 time.sleep(3)
@@ -1240,7 +1259,7 @@ def create(self, vm_, local_master=True):
                 start = int(time.time())
                 while int(time.time()) < start + 60:
                     # We'll try every <timeout> seconds, up to a minute
-                    mopts_ = salt.config.DEFAULT_MASTER_OPTS
+                    mopts_ = copy.deepcopy(salt.config.DEFAULT_MASTER_OPTS)
                     conf_path = "/".join(self.opts["conf_file"].split("/")[:-1])
                     mopts_.update(
                         salt.config.master_config(os.path.join(conf_path, "master"))
diff --git a/tests/pytests/unit/cloud/test_cloud.py b/tests/pytests/unit/cloud/test_cloud.py
new file mode 100644
index 000000000000..1d3952efec20
--- /dev/null
+++ b/tests/pytests/unit/cloud/test_cloud.py
@@ -0,0 +1,38 @@
+import copy
+
+import pytest
+import salt.config
+from salt.cloud import Cloud
+from tests.support.mock import MagicMock, patch
+
+
+@pytest.fixture
+def master_config():
+    opts = copy.deepcopy(salt.config.DEFAULT_MASTER_OPTS)
+    opts["parallel"] = False
+    opts["providers"] = {
+        "test": {},
+    }
+    return opts
+
+
+@pytest.fixture
+def vm_config():
+    return {
+        "driver": "test",
+        "name": "test",
+        "provider": "test:test",
+    }
+
+
+def test_cloud_create_attempt_sync_after_install(master_config, vm_config):
+    master_config["sync_after_install"] = "all"
+    cloud = Cloud(master_config)
+    cloud.clouds["test.create"] = lambda x: True
+
+    with patch(
+        "salt.client.get_local_client",
+        MagicMock(return_value=MagicMock(return_value=True)),
+    ):
+        ret = cloud.create(vm_config)
+    assert ret