diff --git a/lib/compat/wordpress-6.0/block-template-utils.php b/lib/compat/wordpress-6.0/block-template-utils.php
index c03a559af5f317..969e59e2a6094e 100644
--- a/lib/compat/wordpress-6.0/block-template-utils.php
+++ b/lib/compat/wordpress-6.0/block-template-utils.php
@@ -96,6 +96,19 @@ function gutenberg_generate_block_templates_export_file() {
 		);
 	}
 
+	// Add the theme.json file to the zip.
+	$zip->addFromString(
+		'theme.json',
+		gutenberg_export_theme_json()
+	);
+
+	// Save changes to the zip file.
+	$zip->close();
+
+	return $filename;
+}
+
+function gutenberg_export_theme_json() {
 	// Load theme.json into the zip file.
 	$tree = WP_Theme_JSON_Resolver_Gutenberg::get_theme_data( array(), array( 'with_supports' => false ) );
 	// Merge with user data.
@@ -117,16 +130,5 @@ function gutenberg_generate_block_templates_export_file() {
 	$theme_json_encoded = wp_json_encode( $theme_json_raw, JSON_PRETTY_PRINT | JSON_UNESCAPED_SLASHES | JSON_UNESCAPED_UNICODE );
 
 	// Replace 4 spaces with a tab.
-	$theme_json_tabbed = preg_replace( '~(?:^|\G)\h{4}~m', "\t", $theme_json_encoded );
-
-	// Add the theme.json file to the zip.
-	$zip->addFromString(
-		'theme.json',
-		$theme_json_tabbed
-	);
-
-	// Save changes to the zip file.
-	$zip->close();
-
-	return $filename;
+	return preg_replace( '~(?:^|\G)\h{4}~m', "\t", $theme_json_encoded );
 }
diff --git a/lib/compat/wordpress-6.1/class-gutenberg-rest-edit-site-export-controller.php b/lib/compat/wordpress-6.1/class-gutenberg-rest-edit-site-export-controller.php
index 2bf6a4cda04bd7..480903cee8acf0 100644
--- a/lib/compat/wordpress-6.1/class-gutenberg-rest-edit-site-export-controller.php
+++ b/lib/compat/wordpress-6.1/class-gutenberg-rest-edit-site-export-controller.php
@@ -7,8 +7,9 @@
  */
 
 /**
- * Controller which provides REST endpoint for exporting current templates
- * and template parts.
+ * Controller which provides REST endpoints for exporting current templates
+ * and template parts either as a zip bundle or as edits to the current enabled
+ * theme's files.
  *
  * @since 5.9.0
  *
@@ -17,18 +18,14 @@
 class Gutenberg_REST_Edit_Site_Export_Controller_6_1 extends Gutenberg_REST_Edit_Site_Export_Controller {
 
 
-
-	/**
-	 * Registers the necessary REST API routes.
-	 */
 	public function register_routes() {
 		register_rest_route(
 			$this->namespace,
-			'/' . $this->rest_base . '/update_theme',
+			'/' . $this->rest_base . '/export_to_theme_files',
 			array(
 				array(
 					'methods'             => WP_REST_Server::READABLE,
-					'callback'            => array( $this, 'update_theme' ),
+					'callback'            => array( $this, 'export_to_theme_files' ),
 					'permission_callback' => array( $this, 'permissions_check' ),
 				),
 			),
@@ -39,178 +36,124 @@ public function register_routes() {
 	}
 
 	/**
-	 * Checks whether a given request has permission to export.
-	 *
-	 * @return WP_Error|bool True if the request has access, or WP_Error object.
-	 */
-	public function permissions_check() {
-		if ( current_user_can( 'edit_theme_options' ) ) {
-			return true;
-		}
-
-		return new WP_Error(
-			'rest_cannot_export_templates',
-			__( 'Sorry, you are not allowed to export templates and template parts.', 'gutenberg' ),
-			array( 'status' => rest_authorization_required_code() )
-		);
-	}
-
-	/**
-	 * Update the files of a block theme with the template customisations
-	 * made in the site editor.
+	 * Update the files of the currently enabled block theme with the template and
+	 * template part customisations and additions made in the site editor.
 	 *
 	 * @return WP_Error|void
 	 */
-	public function update_theme() {
-		if ( is_child_theme() ) {
-			$this->save_theme_locally( 'current' );
-		}
-		else {
-			$this->save_theme_locally( 'all' );
-		}
+	public function export_to_theme_files() {
+		$this->update_template_and_parts_files();
+		$this->update_theme_json_file();
 		$this->clear_user_customizations();
 		return rest_ensure_response(  array( "update_theme" => true ) );
 	}
 
-	function save_theme_locally( $export_type ) {
-		$this->add_templates_to_local( $export_type );
-		$this->add_theme_json_to_local( $export_type );
-	}
-
-	function clear_user_customizations() {
+	protected function update_template_and_parts_files() {
 
-		// Clear all values in the user theme.json
-		$user_custom_post_type_id = WP_Theme_JSON_Resolver::get_user_global_styles_post_id();
-		$global_styles_controller = new Gutenberg_REST_Global_Styles_Controller();
-		$update_request = new WP_REST_Request( 'PUT', '/wp/v2/global-styles/' );
-		$update_request->set_param( 'id', $user_custom_post_type_id );
-		$update_request->set_param( 'settings', [] );
-		$update_request->set_param( 'styles', [] );
-		$updated_global_styles = $global_styles_controller->update_item( $update_request );
-		delete_transient( 'global_styles' );
-		delete_transient( 'global_styles_' . get_stylesheet() );
-		delete_transient( 'gutenberg_global_styles' );
-		delete_transient( 'gutenberg_global_styles_' . get_stylesheet() );
+		$user_customisations = $this->get_user_customisations();
 
-		//remove all user templates (they have been saved in the theme)
-		$templates = gutenberg_get_block_templates();
-		$template_parts = gutenberg_get_block_templates( array(), 'wp_template_part' );
-		foreach ( $template_parts as $template ) {
-			if ( $template->source !== 'custom' ) {
-				continue;
-			}
-			wp_delete_post($template->wp_id, true);
+		foreach ( $user_customisations['templates'] as $template ) {
+			file_put_contents(
+				get_template_directory() . '/templates/' . $template->slug . '.html',
+				$template->content
+			);
 		}
 
-		foreach ( $templates as $template ) {
-			if ( $template->source !== 'custom' ) {
-				continue;
-			}
-			wp_delete_post($template->wp_id, true);
+		foreach ( $user_customisations['template_parts'] as $template_part ) {
+			file_put_contents(
+				get_template_directory() . '/parts/' . $template_part->slug . '.html',
+				$template_part->content
+			);
 		}
-
 	}
 
-	/*
-	 * Filter a template out (return false) based on the export_type expected and the templates origin.
-	 * Templates not filtered out are modified based on the slug information provided and cleaned up
-	 * to have the expected exported value.
-	 */
-	function filter_theme_template( $template, $export_type, $path, $old_slug, $new_slug ) {
-		if ($template->source === 'theme' && $export_type === 'user') {
-			return false;
-		}
-		if (
-			$template->source === 'theme' &&
-			$export_type === 'current' &&
-			! file_exists( $path . $template->slug . '.html' )
-		) {
-			return false;
-		}
-
-		$template->content = _remove_theme_attribute_in_block_template_content( $template->content );
-
-		// NOTE: Dashes are encoded as \u002d in the content that we get (noteably in things like css variables used in templates)
-		// This replaces that with dashes again. We should consider decoding the entire string but that is proving difficult.
-		$template->content = str_replace( '\u002d', '-', $template->content );
-
-		if ( $new_slug ) {
-			$template->content = str_replace( $old_slug, $new_slug, $template->content );
-		}
-
-		return $template;
+	protected function update_theme_json_file() {
+		file_put_contents(
+			get_template_directory() . '/theme.json',
+			gutenberg_export_theme_json()
+		);
 	}
 
-	function get_theme_templates( $export_type, $new_slug ) {
+	protected function get_user_customisations() {
 
-		$old_slug = wp_get_theme()->get( 'TextDomain' );
 		$templates = gutenberg_get_block_templates();
 		$template_parts = gutenberg_get_block_templates ( array(), 'wp_template_part' );
-		$exported_templates = [];
-		$exported_parts = [];
 
-		// build collection of templates/parts in currently activated theme
-		$templates_paths = get_block_theme_folders();
-		$templates_path =  get_stylesheet_directory() . '/' . $templates_paths['wp_template'] . '/';
-		$parts_path =  get_stylesheet_directory() . '/' . $templates_paths['wp_template_part'] . '/';
+		$exported_templates = [];
+		$exported_template_parts = [];
 
 		foreach ( $templates as $template ) {
-			$template = $this->filter_theme_template(
-				$template,
-				$export_type,
-				$templates_path,
-				$old_slug,
-				$new_slug
-			);
-			if ( $template ) {
-				$exported_templates[] = $template;
+			if ( $template->source !== 'custom' ) {
+				continue;
 			}
+			$template = $this->clean_template( $template );
+			$exported_templates[] = $template;
 		}
 
-		foreach ( $template_parts as $template ) {
-			$template = $this->filter_theme_template(
-				$template,
-				$export_type,
-				$parts_path,
-				$old_slug,
-				$new_slug
-
-			);
-			if ( $template ) {
-				$exported_parts[] = $template;
+		foreach ( $template_parts as $template_part ) {
+			if ( $template_part->source !== 'custom' ) {
+				continue;
 			}
+			$template_part = $this->clean_template( $template_part );
+			$exported_template_parts[] = $template_part;
 		}
 
-		return (object)[
+		return array(
 			'templates'=>$exported_templates,
-			'parts'=>$exported_parts
-		];
+			'template_parts'=>$exported_template_parts
+		);
 
 	}
 
-	function add_templates_to_local( $export_type ) {
-
-		$theme_templates = $this->get_theme_templates( $export_type, null );
+	/*
+	 * Clean a template or template part by reversing unicode escaping
+	 * and removing the theme attribute from the content
+	 */
+	function clean_template( $template ) {
+		$template->content = _remove_theme_attribute_in_block_template_content(
+			$template->content
+		);
 
-		foreach ( $theme_templates->templates as $template ) {
-			file_put_contents(
-				get_template_directory() . '/templates/' . $template->slug . '.html',
-				$template->content
-			);
-		}
+		// `serialize_block_attributes` has "unicode escape sequence
+ 		// substitution for characters which might otherwise interfere with embedding
+ 		// the result in an HTML comment".
+		// This reverses that escaping for saving back to files.
+		// @see `wp-includes/blocks.php`
+		$template->content = str_replace( '\\u002d\\u002d', '--', $template->content );
+		$template->content = str_replace( '\\u003c', '<', $template->content );
+		$template->content = str_replace( '\\u003e', '>', $template->content );
+		$template->content = str_replace( '\\u0026', '&', $template->content );
+		$template->content = str_replace( '\\u0022', '"', $template->content );
 
-		foreach ( $theme_templates->parts as $template_part ) {
-			file_put_contents(
-				get_template_directory() . '/parts/' . $template_part->slug . '.html',
-				$template_part->content
-			);
-		}
+		return $template;
 	}
 
-	function add_theme_json_to_local ( $export_type ) {
-		file_put_contents(
-			get_template_directory() . '/theme.json',
-			WP_Theme_JSON_Resolver_6_1::export_theme_data( $export_type )
+	function clear_user_customizations() {
+
+		// clear global styles
+		$global_styles_controller = new Gutenberg_REST_Global_Styles_Controller();
+		$update_request = new WP_REST_Request( 'PUT', '/wp/v2/global-styles/' );
+		$update_request->set_param(
+			'id',
+			WP_Theme_JSON_Resolver::get_user_global_styles_post_id()
 		);
+		$update_request->set_param( 'settings', [] );
+		$update_request->set_param( 'styles', [] );
+		$global_styles_controller->update_item( $update_request );
+
+		// delete global styles transients
+		delete_transient( 'global_styles' );
+		delete_transient( 'global_styles_' . get_stylesheet() );
+		delete_transient( 'gutenberg_global_styles' );
+		delete_transient( 'gutenberg_global_styles_' . get_stylesheet() );
+
+		// remove all user templates and template parts
+		$user_customisations = $this->get_user_customisations();
+		foreach ( $user_customisations['templates'] as $template ) {
+			wp_delete_post($template->wp_id, true);
+		}
+		foreach ( $user_customisations['template_parts'] as $template_part ) {
+			wp_delete_post($template->wp_id, true);
+		}
 	}
 }
diff --git a/lib/compat/wordpress-6.1/class-wp-theme-json-resolver-6-1.php b/lib/compat/wordpress-6.1/class-wp-theme-json-resolver-6-1.php
deleted file mode 100644
index 09924d43de7870..00000000000000
--- a/lib/compat/wordpress-6.1/class-wp-theme-json-resolver-6-1.php
+++ /dev/null
@@ -1,109 +0,0 @@
-<?php
-/**
- * WP_Theme_JSON_Resolver_6_1 class
- *
- * @package gutenberg
- */
-
-/**
- * Class that abstracts the processing of the different data sources
- * for site-level config and offers an API to work with them.
- *
- * This class is for internal core usage and is not supposed to be used by extenders (plugins and/or themes).
- * This is a low-level API that may need to do breaking changes. Please,
- * use get_global_settings, get_global_styles, and get_global_stylesheet instead.
- *
- * @access private
- */
-class WP_Theme_JSON_Resolver_6_1 extends WP_Theme_JSON_Resolver {
-
-	/**
-	 * 'Flatten' theme data that expresses both theme and user data.
-	 * change property.[custom|theme].value to property.value
-	 * Uses custom value if available, otherwise theme value
-	 * I feel like there should be a function to do this in Gutenberg but I couldn't find it
-	 */
-	private static function flatten_theme_json( $data, $name ) {
-		if ( is_array( $data ) ) {
-
-			// 'settings' can have a 'custom' object that is different and should not be processed in the same way
-			// as values that could be represented as both theme and user (user data being 'custom')
-			if ( $name !== 'settings' ) {
-
-				// When there is BOTH custom AND THEME combine the two
-				if ( array_key_exists( 'custom', $data ) && array_key_exists( 'theme', $data ) ) {
-					$merged = array_merge( $data['custom'], $data['theme'] );
-					// eliminate values with duplicate slugs
-					// TODO: This could probably be done better...
-					$filtered = array();
-					$sluglist = array();
-					foreach ( $merged as $item ) {
-						if( array_key_exists('slug', $item) ) {
-							if( ! in_array($item['slug'], $sluglist) ) {
-								$sluglist[] = $item['slug'];
-								$filtered[] = $item;
-							}
-						}
-						else {
-							$filtered[] = $item;
-						}
-					}
-					return WP_Theme_JSON_Resolver_6_1::flatten_theme_json($filtered, $name);
-				}
-
-				// When there is CUSTOM but no THEME return custom
-				if ( array_key_exists( 'custom', $data ) ) {
-					return WP_Theme_JSON_Resolver_6_1::flatten_theme_json($data['custom'], $name);
-				}
-
-				// When there is THEME but no CUSTOM return theme
-				if ( array_key_exists( 'theme', $data ) ) {
-					return WP_Theme_JSON_Resolver_6_1::flatten_theme_json($data['theme'], $name);
-				}
-
-			}
-
-			foreach( $data as $node_name => $node_value  ) {
-				$data[ $node_name ] = WP_Theme_JSON_Resolver_6_1::flatten_theme_json( $node_value, $node_name );
-			}
-		}
-
-		return $data;
-	}
-
-	/**
-	 * Export the combined (and flattened) THEME and CUSTOM data.
-	 *
-	 * @param string $content ['all', 'current', 'user'] Determines which settings content to include in the export.
-	 * All options include user settings.
-	 * 'current' will include settings from the currently installed theme but NOT from the parent theme.
-	 * 'all' will include settings from the current theme as well as the parent theme (if it has one)
-	 */
-	public static function export_theme_data( $content ) {
-		$theme = new WP_Theme_JSON();
-
-		if ( $content === 'all' && wp_get_theme()->parent() ) {
-			// Get parent theme.json.
-			$parent_theme_json_data = static::read_json_file( static::get_file_path_from_theme( 'theme.json', true ) );
-			$parent_theme_json_data = static::translate( $parent_theme_json_data, wp_get_theme()->parent()->get( 'TextDomain' ) );
-			$parent_theme           = new WP_Theme_JSON( $parent_theme_json_data );
-			$theme->merge ($parent_theme);
-		}
-
-		if ( $content === 'all' || $content === 'current' ) {
-			$theme_json_data = static::read_json_file( static::get_file_path_from_theme( 'theme.json' ) );
-			$theme_json_data = static::translate( $theme_json_data, wp_get_theme()->get( 'TextDomain' ) );
-			$theme_theme     = new WP_Theme_JSON( $theme_json_data );
-			$theme->merge( $theme_theme );
-		}
-
-		$theme->merge( static::get_user_data() );
-
-		$data = WP_Theme_JSON_Resolver_6_1::flatten_theme_json($theme->get_raw_data(), null);
-
-		$theme_json = wp_json_encode( $data, JSON_PRETTY_PRINT | JSON_UNESCAPED_SLASHES | JSON_UNESCAPED_UNICODE );
-		return preg_replace ( '~(?:^|\G)\h{4}~m', "\t", $theme_json );
-
-	}
-
-}
diff --git a/lib/load.php b/lib/load.php
index 5c50a30a82862d..f8b5c42c379075 100644
--- a/lib/load.php
+++ b/lib/load.php
@@ -119,7 +119,6 @@ function gutenberg_is_experiment_enabled( $name ) {
 require __DIR__ . '/compat/wordpress-6.0/class-wp-theme-json-gutenberg.php';
 require __DIR__ . '/compat/wordpress-6.0/class-wp-theme-json-resolver-6-0.php';
 require __DIR__ . '/compat/wordpress-6.1/class-gutenberg-rest-edit-site-export-controller.php';
-require __DIR__ . '/compat/wordpress-6.1/class-wp-theme-json-resolver-6-1.php';
 require __DIR__ . '/compat/wordpress-6.1/rest-api.php';
 require __DIR__ . '/compat/wordpress-6.0/block-patterns.php';
 require __DIR__ . '/compat/wordpress-6.0/block-template.php';
diff --git a/packages/edit-site/src/components/header/theme-udpdater/index.js b/packages/edit-site/src/components/header/theme-udpdater/index.js
index db9ef42bed36b5..7dfa0726ce2838 100644
--- a/packages/edit-site/src/components/header/theme-udpdater/index.js
+++ b/packages/edit-site/src/components/header/theme-udpdater/index.js
@@ -39,7 +39,6 @@ export default function ThemeUpdater() {
 		isResolving: isTemplateListLoading,
 	} = useEntityRecords( 'postType', 'wp_template', {
 		per_page: -1,
-		source: 'custom',
 	} );
 
 	const {
@@ -63,35 +62,30 @@ export default function ThemeUpdater() {
 		};
 	}, [] );
 
-	if ( ! templates || isTemplateListLoading ) {
-		return null;
-	}
-
-	if ( ! templateParts || isTemplatePartListLoading ) {
-		return null;
-	}
-
 	const customSourceFilter = ( tpl ) => tpl.source === 'custom';
-	const unModifiedTheme =
-		! filter( templates, customSourceFilter ).length &&
-		! filter( templateParts, customSourceFilter ).length;
+	const customTemplates = filter( templates, customSourceFilter );
+	const customTemplateParts = filter( templateParts, customSourceFilter );
 
-	if ( ! enableThemeSaving ) {
+	const unModifiedTheme =
+		! customTemplates.length && ! customTemplateParts.length;
+	const isLoading = isTemplateListLoading || isTemplatePartListLoading;
+
+	if (
+		! enableThemeSaving ||
+		isLoading ||
+		unModifiedTheme ||
+		isDirty ||
+		isSaving
+	) {
 		return null;
 	}
 
 	const handleUpdateTheme = async () => {
 		try {
 			await apiFetch( {
-				path: '/wp-block-editor/v1/export/update_theme',
+				path: '/wp-block-editor/v1/export/export_to_theme_files',
 			} );
 
-			const customTemplates = filter( templates, customSourceFilter );
-			const customTemplateParts = filter(
-				templateParts,
-				customSourceFilter
-			);
-
 			const revertTemplateOrPart = ( name ) => {
 				if ( isTemplateRevertable( name ) ) {
 					revertTemplate( name );
@@ -100,7 +94,7 @@ export default function ThemeUpdater() {
 			customTemplates.forEach( revertTemplateOrPart );
 			customTemplateParts.forEach( revertTemplateOrPart );
 
-			createInfoNotice( __( 'Customisations saved to theme' ), {
+			createInfoNotice( __( 'Customisations exported to theme files' ), {
 				speak: true,
 				type: 'snackbar',
 			} );
@@ -117,10 +111,6 @@ export default function ThemeUpdater() {
 		}
 	};
 
-	if ( unModifiedTheme || isDirty || isSaving ) {
-		return null;
-	}
-
 	return (
 		<Button onClick={ handleUpdateTheme } variant="tertiary">
 			{ __( 'Update theme' ) }