diff --git a/src/service/rooms/event_handler/upgrade_outlier_pdu.rs b/src/service/rooms/event_handler/upgrade_outlier_pdu.rs
index ddd61d49..7db6f963 100644
--- a/src/service/rooms/event_handler/upgrade_outlier_pdu.rs
+++ b/src/service/rooms/event_handler/upgrade_outlier_pdu.rs
@@ -234,39 +234,19 @@ pub(super) async fn upgrade_outlier_to_timeline_pdu(
 
 	// 14. Check if the event passes auth based on the "current state" of the room,
 	//     if not soft fail it
-	if soft_fail {
-		debug!("Soft failing event");
-		let extremities = extremities.iter().map(Borrow::borrow);
-
-		self.services
-			.timeline
-			.append_incoming_pdu(
-				&incoming_pdu,
-				val,
-				extremities,
-				state_ids_compressed,
-				soft_fail,
-				&state_lock,
-			)
-			.await?;
-
-		// Soft fail, we keep the event as an outlier but don't add it to the timeline
-		self.services
-			.pdu_metadata
-			.mark_event_soft_failed(incoming_pdu.event_id());
-
-		warn!("Event was soft failed: {:?}", incoming_pdu.event_id());
-		return Err!(Request(InvalidParam("Event has been soft failed")));
-	}
-
+	//
 	// Now that the event has passed all auth it is added into the timeline.
 	// We use the `state_at_event` instead of `state_after` so we accurately
 	// represent the state for this event.
 	trace!("Appending pdu to timeline");
+
+	// Incoming event will be referenced in prev_events unless soft-failed.
+	let incoming_extremity = once(incoming_pdu.event_id()).filter(|_| !soft_fail);
+
 	let extremities = extremities
 		.iter()
 		.map(Borrow::borrow)
-		.chain(once(incoming_pdu.event_id()));
+		.chain(incoming_extremity);
 
 	let pdu_id = self
 		.services
@@ -281,7 +261,21 @@ pub(super) async fn upgrade_outlier_to_timeline_pdu(
 		)
 		.await?;
 
-	// Event has passed all auth/stateres checks
+	if soft_fail {
+		self.services
+			.pdu_metadata
+			.mark_event_soft_failed(incoming_pdu.event_id());
+
+		drop(state_lock);
+		warn!(
+			elapsed = ?timer.elapsed(),
+			"Event was soft failed: {:?}",
+			incoming_pdu.event_id()
+		);
+
+		return Err!(Request(InvalidParam("Event has been soft failed")));
+	}
+
 	drop(state_lock);
 	debug_info!(
 		elapsed = ?timer.elapsed(),