diff --git a/scripts/py_matter_yamltests/matter_yamltests/parser.py b/scripts/py_matter_yamltests/matter_yamltests/parser.py
index 258693b0ec20a7..2c9a14a4e92b43 100644
--- a/scripts/py_matter_yamltests/matter_yamltests/parser.py
+++ b/scripts/py_matter_yamltests/matter_yamltests/parser.py
@@ -401,12 +401,13 @@ def __init__(self, test: _TestStepWithPlaceholders, runtime_config_variable_stor
         self._runtime_config_variable_storage = runtime_config_variable_storage
         self.arguments = copy.deepcopy(test.arguments_with_placeholders)
         self.response = copy.deepcopy(test.response_with_placeholders)
-        self._update_placeholder_values(self.arguments)
-        self._update_placeholder_values(self.response)
-        self._test.node_id = self._config_variable_substitution(
-            self._test.node_id)
-        test.update_arguments(self.arguments)
-        test.update_response(self.response)
+        if test.is_pics_enabled:
+            self._update_placeholder_values(self.arguments)
+            self._update_placeholder_values(self.response)
+            self._test.node_id = self._config_variable_substitution(
+                self._test.node_id)
+            test.update_arguments(self.arguments)
+            test.update_response(self.response)
 
     @property
     def is_enabled(self):