diff --git a/.changeset/better-games-invite.md b/.changeset/better-games-invite.md
new file mode 100644
index 0000000000..8361a1e9bb
--- /dev/null
+++ b/.changeset/better-games-invite.md
@@ -0,0 +1,5 @@
+---
+'svelte': patch
+---
+
+fix: don't transform references of function declarations in legacy mode
diff --git a/packages/svelte/src/compiler/phases/2-analyze/index.js b/packages/svelte/src/compiler/phases/2-analyze/index.js
index 6d23e4d265..ef0b35f560 100644
--- a/packages/svelte/src/compiler/phases/2-analyze/index.js
+++ b/packages/svelte/src/compiler/phases/2-analyze/index.js
@@ -657,7 +657,8 @@ export function analyze_component(root, source, options) {
 									if (
 										binding &&
 										binding.kind === 'normal' &&
-										binding.declaration_kind !== 'import'
+										binding.declaration_kind !== 'import' &&
+										binding.declaration_kind !== 'function'
 									) {
 										binding.kind = 'state';
 										binding.mutated = true;
diff --git a/packages/svelte/src/compiler/phases/2-analyze/visitors/EachBlock.js b/packages/svelte/src/compiler/phases/2-analyze/visitors/EachBlock.js
index 81a9c1e2d1..5681966475 100644
--- a/packages/svelte/src/compiler/phases/2-analyze/visitors/EachBlock.js
+++ b/packages/svelte/src/compiler/phases/2-analyze/visitors/EachBlock.js
@@ -54,7 +54,9 @@ export function EachBlock(node, context) {
 
 		// collect transitive dependencies...
 		for (const binding of node.metadata.expression.dependencies) {
-			collect_transitive_dependencies(binding, node.metadata.transitive_deps);
+			if (binding.declaration_kind !== 'function') {
+				collect_transitive_dependencies(binding, node.metadata.transitive_deps);
+			}
 		}
 
 		// ...and ensure they are marked as state, so they can be turned
diff --git a/packages/svelte/tests/runtime-legacy/samples/binding-indirect-fn/_config.js b/packages/svelte/tests/runtime-legacy/samples/binding-indirect-fn/_config.js
new file mode 100644
index 0000000000..f17a7f4825
--- /dev/null
+++ b/packages/svelte/tests/runtime-legacy/samples/binding-indirect-fn/_config.js
@@ -0,0 +1,7 @@
+import { test } from '../../test';
+
+export default test({
+	async test({ assert, target }) {
+		assert.htmlEqual(target.innerHTML, `<input>`);
+	}
+});
diff --git a/packages/svelte/tests/runtime-legacy/samples/binding-indirect-fn/main.svelte b/packages/svelte/tests/runtime-legacy/samples/binding-indirect-fn/main.svelte
new file mode 100644
index 0000000000..9c1e23a0f4
--- /dev/null
+++ b/packages/svelte/tests/runtime-legacy/samples/binding-indirect-fn/main.svelte
@@ -0,0 +1,11 @@
+<script>
+  $: items = [{ value: 'hello' }];
+
+  function fn(value) {
+		return true;
+	}
+</script>
+
+{#each items.filter(fn) as item}
+  <input bind:value={item.value} />
+{/each}