diff --git a/.changeset/odd-buckets-lie.md b/.changeset/odd-buckets-lie.md
new file mode 100644
index 0000000000..240cf02d9a
--- /dev/null
+++ b/.changeset/odd-buckets-lie.md
@@ -0,0 +1,5 @@
+---
+'svelte': patch
+---
+
+fix: improve code generation
diff --git a/packages/svelte/src/compiler/phases/3-transform/client/utils.js b/packages/svelte/src/compiler/phases/3-transform/client/utils.js
index 19fef4e5bd..d8e6008086 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/utils.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/utils.js
@@ -217,9 +217,10 @@ function is_expression_async(expression) {
  * @param {import('estree').AssignmentExpression} node
  * @param {import('zimmerframe').Context<import('#compiler').SvelteNode, State>} context
  * @param {() => any} fallback
+ * @param {{skip_proxy_and_freeze?: boolean}} [options]
  * @returns {import('estree').Expression}
  */
-export function serialize_set_binding(node, context, fallback) {
+export function serialize_set_binding(node, context, fallback, options) {
 	const { state, visit } = context;
 
 	if (
@@ -242,7 +243,7 @@ export function serialize_set_binding(node, context, fallback) {
 			const value = path.expression?.(b.id(tmp_id));
 			const assignment = b.assignment('=', path.node, value);
 			original_assignments.push(assignment);
-			assignments.push(serialize_set_binding(assignment, context, () => assignment));
+			assignments.push(serialize_set_binding(assignment, context, () => assignment, options));
 		}
 
 		if (assignments.every((assignment, i) => assignment === original_assignments[i])) {
@@ -288,7 +289,11 @@ export function serialize_set_binding(node, context, fallback) {
 			if (private_state !== undefined) {
 				if (state.in_constructor) {
 					// See if we should wrap value in $.proxy
-					if (context.state.analysis.runes && should_proxy_or_freeze(value)) {
+					if (
+						context.state.analysis.runes &&
+						!options?.skip_proxy_and_freeze &&
+						should_proxy_or_freeze(value)
+					) {
 						const assignment = fallback();
 						if (assignment.type === 'AssignmentExpression') {
 							assignment.right =
@@ -302,7 +307,9 @@ export function serialize_set_binding(node, context, fallback) {
 					return b.call(
 						'$.set',
 						left,
-						context.state.analysis.runes && should_proxy_or_freeze(value)
+						context.state.analysis.runes &&
+							!options?.skip_proxy_and_freeze &&
+							should_proxy_or_freeze(value)
 							? private_state.kind === 'frozen_state'
 								? b.call('$.freeze', value)
 								: b.call('$.proxy', value)
@@ -321,6 +328,7 @@ export function serialize_set_binding(node, context, fallback) {
 			if (
 				context.state.analysis.runes &&
 				public_state !== undefined &&
+				!options?.skip_proxy_and_freeze &&
 				should_proxy_or_freeze(value)
 			) {
 				const assignment = fallback();
@@ -387,7 +395,9 @@ export function serialize_set_binding(node, context, fallback) {
 				return b.call(
 					'$.set',
 					b.id(left_name),
-					context.state.analysis.runes && should_proxy_or_freeze(value)
+					context.state.analysis.runes &&
+						!options?.skip_proxy_and_freeze &&
+						should_proxy_or_freeze(value)
 						? b.call('$.proxy', value)
 						: value
 				);
@@ -395,7 +405,9 @@ export function serialize_set_binding(node, context, fallback) {
 				return b.call(
 					'$.set',
 					b.id(left_name),
-					context.state.analysis.runes && should_proxy_or_freeze(value)
+					context.state.analysis.runes &&
+						!options?.skip_proxy_and_freeze &&
+						should_proxy_or_freeze(value)
 						? b.call('$.freeze', value)
 						: value
 				);
@@ -624,6 +636,5 @@ export function should_proxy_or_freeze(node) {
 	) {
 		return false;
 	}
-
 	return true;
 }
diff --git a/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js b/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
index b6708bc851..60c1d2fac2 100644
--- a/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
+++ b/packages/svelte/src/compiler/phases/3-transform/client/visitors/template.js
@@ -2604,7 +2604,10 @@ export const template_visitors = {
 			serialize_set_binding(
 				assignment,
 				context,
-				() => /** @type {import('estree').Expression} */ (context.visit(assignment))
+				() => /** @type {import('estree').Expression} */ (context.visit(assignment)),
+				{
+					skip_proxy_and_freeze: true
+				}
 			)
 		);
 
diff --git a/packages/svelte/tests/snapshot/samples/state-proxy-literal/_expected/client/index.svelte.js b/packages/svelte/tests/snapshot/samples/state-proxy-literal/_expected/client/index.svelte.js
index f1a5a0ee42..321496e20b 100644
--- a/packages/svelte/tests/snapshot/samples/state-proxy-literal/_expected/client/index.svelte.js
+++ b/packages/svelte/tests/snapshot/samples/state-proxy-literal/_expected/client/index.svelte.js
@@ -29,8 +29,8 @@ export default function State_proxy_literal($$anchor, $$props) {
 
 	var button = $.sibling($.sibling(input));
 
-	$.bind_value(node, () => $.get(str), ($$value) => $.set(str, $.proxy($$value)));
-	$.bind_value(input, () => $.get(tpl), ($$value) => $.set(tpl, $.proxy($$value)));
+	$.bind_value(node, () => $.get(str), ($$value) => $.set(str, $$value));
+	$.bind_value(input, () => $.get(tpl), ($$value) => $.set(tpl, $$value));
 	button.__click = [reset, str, tpl];
 	$.close_frag($$anchor, fragment);
 	$.pop();