diff --git a/sdk_container/src/third_party/coreos-overlay/changelog/changes/2023-02-24-etc-overlay-cleanup.md b/sdk_container/src/third_party/coreos-overlay/changelog/changes/2023-02-24-etc-overlay-cleanup.md
new file mode 100644
index 0000000000..7c0975d34c
--- /dev/null
+++ b/sdk_container/src/third_party/coreos-overlay/changelog/changes/2023-02-24-etc-overlay-cleanup.md
@@ -0,0 +1 @@
+- On boot any files in `/etc` that are the same as provided by the booted `/usr/share/flatcar/etc` default for the overlay mount on `/etc` are deleted to ensure that future updates of `/usr/share/flatcar/etc` are propagated - to opt out create `/etc/.no-dup-update` in case you want to keep an unmodified config file as is or because you fear that a future Flatcar version may use the same file as you at which point your copy is cleaned up and any other future Flatcar changes would be applied ([bootengine#54](https://github.com/flatcar/bootengine/pull/54))
diff --git a/sdk_container/src/third_party/coreos-overlay/sys-kernel/bootengine/bootengine-9999.ebuild b/sdk_container/src/third_party/coreos-overlay/sys-kernel/bootengine/bootengine-9999.ebuild
index 823dbdafdb..a1fd211ebc 100644
--- a/sdk_container/src/third_party/coreos-overlay/sys-kernel/bootengine/bootengine-9999.ebuild
+++ b/sdk_container/src/third_party/coreos-overlay/sys-kernel/bootengine/bootengine-9999.ebuild
@@ -10,7 +10,7 @@ CROS_WORKON_REPO="https://github.com"
 if [[ "${PV}" == 9999 ]]; then
 	KEYWORDS="~amd64 ~arm ~arm64 ~x86"
 else
-	CROS_WORKON_COMMIT="98a903c775dc0dea3db45e5ca730d7be4d480cf2" # flatcar-master
+	CROS_WORKON_COMMIT="786e45cc6669bda7b2e51ab59c095e66f1b37f6c" # flatcar-master
 	KEYWORDS="amd64 arm arm64 x86"
 fi