diff --git a/packages/svelte/src/compiler/phases/3-transform/client/visitors/Fragment.js b/packages/svelte/src/compiler/phases/3-transform/client/visitors/Fragment.js
index 12abc8e9e0..b579f32e91 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/visitors/Fragment.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/visitors/Fragment.js
@@ -69,6 +69,7 @@ export function Fragment(node, context) {
 		template: [],
 		locations: [],
 		transform: { ...context.state.transform },
+		is_functional_template_mode: context.state.is_functional_template_mode,
 		metadata: {
 			context: {
 				template_needs_import_node: false,
@@ -125,40 +126,22 @@ export function Fragment(node, context) {
 			// special case — we can use `$.text` instead of creating a unique template
 			const id = b.id(context.state.scope.generate('text'));
 
-			process_children(
-				trimmed,
-				() => id,
-				false,
-				{
-					...context,
-					state
-				},
-				context.state.is_functional_template_mode
-			);
+			process_children(trimmed, () => id, false, {
+				...context,
+				state
+			});
 
 			body.push(b.var(id, b.call('$.text')));
 			close = b.stmt(b.call('$.append', b.id('$$anchor'), id));
 		} else {
 			if (is_standalone) {
 				// no need to create a template, we can just use the existing block's anchor
-				process_children(
-					trimmed,
-					() => b.id('$$anchor'),
-					false,
-					{ ...context, state },
-					context.state.is_functional_template_mode
-				);
+				process_children(trimmed, () => b.id('$$anchor'), false, { ...context, state });
 			} else {
 				/** @type {(is_text: boolean) => Expression} */
 				const expression = (is_text) => b.call('$.first_child', id, is_text && b.true);
 
-				process_children(
-					trimmed,
-					expression,
-					false,
-					{ ...context, state },
-					context.state.is_functional_template_mode
-				);
+				process_children(trimmed, expression, false, { ...context, state });
 
 				let flags = TEMPLATE_FRAGMENT;
 
diff --git a/packages/svelte/src/compiler/phases/3-transform/client/visitors/RegularElement.js b/packages/svelte/src/compiler/phases/3-transform/client/visitors/RegularElement.js
index fd8f27bc4a..db2ddf7fc2 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/visitors/RegularElement.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/visitors/RegularElement.js
@@ -375,7 +375,8 @@ export function RegularElement(node, context) {
 		locations: [],
 		scope: /** @type {Scope} */ (context.state.scopes.get(node.fragment)),
 		preserve_whitespace:
-			context.state.preserve_whitespace || node.name === 'pre' || node.name === 'textarea'
+			context.state.preserve_whitespace || node.name === 'pre' || node.name === 'textarea',
+		is_functional_template_mode: context.state.is_functional_template_mode
 	};
 
 	const { hoisted, trimmed } = clean_nodes(
@@ -430,16 +431,10 @@ export function RegularElement(node, context) {
 			arg = b.member(arg, 'content');
 		}
 
-		process_children(
-			trimmed,
-			(is_text) => b.call('$.child', arg, is_text && b.true),
-			true,
-			{
-				...context,
-				state: child_state
-			},
-			context.state.is_functional_template_mode
-		);
+		process_children(trimmed, (is_text) => b.call('$.child', arg, is_text && b.true), true, {
+			...context,
+			state: child_state
+		});
 
 		if (needs_reset) {
 			child_state.init.push(b.stmt(b.call('$.reset', context.state.node)));
diff --git a/packages/svelte/src/compiler/phases/3-transform/client/visitors/shared/fragment.js b/packages/svelte/src/compiler/phases/3-transform/client/visitors/shared/fragment.js
index fd6f6853d0..2ab273fca5 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/visitors/shared/fragment.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/visitors/shared/fragment.js
@@ -15,15 +15,8 @@ import { build_template_chunk } from './utils.js';
  * @param {(is_text: boolean) => Expression} initial
  * @param {boolean} is_element
  * @param {ComponentContext} context
- * @param {boolean} [is_functional_template_mode]
  */
-export function process_children(
-	nodes,
-	initial,
-	is_element,
-	{ visit, state },
-	is_functional_template_mode
-) {
+export function process_children(nodes, initial, is_element, { visit, state }) {
 	const within_bound_contenteditable = state.metadata.bound_contenteditable;
 	let prev = initial;
 	let skipped = 0;
@@ -74,7 +67,9 @@ export function process_children(
 			state.template.push({
 				kind: 'create_text',
 				args: [
-					sequence.map((node) => (is_functional_template_mode ? node.data : node.raw)).join('')
+					sequence
+						.map((node) => (state.is_functional_template_mode ? node.data : node.raw))
+						.join('')
 				]
 			});
 			return;
diff --git a/packages/svelte/src/compiler/phases/3-transform/server/visitors/Fragment.js b/packages/svelte/src/compiler/phases/3-transform/server/visitors/Fragment.js
index 57856ac204..bb394a86d5 100644
--- a/packages/svelte/src/compiler/phases/3-transform/server/visitors/Fragment.js
+++ b/packages/svelte/src/compiler/phases/3-transform/server/visitors/Fragment.js
@@ -20,7 +20,7 @@ export function Fragment(node, context) {
 		context.state,
 		context.state.preserve_whitespace,
 		context.state.options.preserveComments,
-		// prevent template cloning should always be false on the server
+		// templating mode doesn't affect server builds
 		false
 	);
 
diff --git a/packages/svelte/src/compiler/phases/3-transform/server/visitors/RegularElement.js b/packages/svelte/src/compiler/phases/3-transform/server/visitors/RegularElement.js
index ff7115f961..2126ab6012 100644
--- a/packages/svelte/src/compiler/phases/3-transform/server/visitors/RegularElement.js
+++ b/packages/svelte/src/compiler/phases/3-transform/server/visitors/RegularElement.js
@@ -48,7 +48,7 @@ export function RegularElement(node, context) {
 		},
 		state.preserve_whitespace,
 		state.options.preserveComments,
-		// prevent template cloning should always be false on the server
+		// templating mode doesn't affect server builds
 		false
 	);