diff --git a/src/cascadia/UnitTests_SettingsModel/KeyBindingsTests.cpp b/src/cascadia/UnitTests_SettingsModel/KeyBindingsTests.cpp
index 0e38d164f0b..771fa87ed8e 100644
--- a/src/cascadia/UnitTests_SettingsModel/KeyBindingsTests.cpp
+++ b/src/cascadia/UnitTests_SettingsModel/KeyBindingsTests.cpp
@@ -157,17 +157,17 @@ namespace SettingsModelUnitTests
     void KeyBindingsTests::HashDeduplication()
     {
         const auto actionMap = winrt::make_self<implementation::ActionMap>();
-        actionMap->LayerJson(VerifyParseSucceeded(R"([ { "command": "splitPane", "id": "Test.SplitPane", "keys": ["ctrl+c"] } ])"), OriginTag::None);
-        actionMap->LayerJson(VerifyParseSucceeded(R"([ { "command": "splitPane", "id": "Test.SplitPane", "keys": ["ctrl+c"] } ])"), OriginTag::None);
+        actionMap->LayerJson(VerifyParseSucceeded(R"([ { "command": "splitPane", "keys": ["ctrl+c"] } ])"), OriginTag::User);
+        actionMap->LayerJson(VerifyParseSucceeded(R"([ { "command": "splitPane", "keys": ["ctrl+c"] } ])"), OriginTag::User);
         VERIFY_ARE_EQUAL(1u, actionMap->_ActionMap.size());
     }
 
     void KeyBindingsTests::HashContentArgs()
     {
-        Log::Comment(L"These are two actions with different content args. They should have different hashes for their terminal args.");
+        Log::Comment(L"These are two actions with different content args. They should have different generated IDs for their terminal args.");
         const auto actionMap = winrt::make_self<implementation::ActionMap>();
-        actionMap->LayerJson(VerifyParseSucceeded(R"([ { "command": { "action": "newTab",            } , "id": "Test.NewTabNoArgs", "keys": ["ctrl+c"]       } ])"), OriginTag::None);
-        actionMap->LayerJson(VerifyParseSucceeded(R"([ { "command": { "action": "newTab", "index": 0 } , "id": "Test.NewTab0", "keys": ["ctrl+shift+c"] } ])"), OriginTag::None);
+        actionMap->LayerJson(VerifyParseSucceeded(R"([ { "command": { "action": "newTab",            } , "keys": ["ctrl+c"]       } ])"), OriginTag::User);
+        actionMap->LayerJson(VerifyParseSucceeded(R"([ { "command": { "action": "newTab", "index": 0 } , "keys": ["ctrl+shift+c"] } ])"), OriginTag::User);
         VERIFY_ARE_EQUAL(2u, actionMap->_ActionMap.size());
 
         KeyChord ctrlC{ VirtualKeyModifiers::Control, static_cast<int32_t>('C'), 0 };
diff --git a/src/cascadia/UnitTests_SettingsModel/SerializationTests.cpp b/src/cascadia/UnitTests_SettingsModel/SerializationTests.cpp
index 0e1cab1ddc9..2afa1baa6c6 100644
--- a/src/cascadia/UnitTests_SettingsModel/SerializationTests.cpp
+++ b/src/cascadia/UnitTests_SettingsModel/SerializationTests.cpp
@@ -47,6 +47,8 @@ namespace SettingsModelUnitTests
         TEST_METHOD(RoundtripGenerateActionID);
         TEST_METHOD(NoGeneratedIDsForIterableAndNestedCommands);
         TEST_METHOD(GeneratedActionIDsEqualForIdenticalCommands);
+        TEST_METHOD(RoundtripLegacyToModernActions);
+        TEST_METHOD(MultipleActionsAreCollapsed);
 
     private:
         // Method Description:
@@ -1074,4 +1076,123 @@ namespace SettingsModelUnitTests
 
         VERIFY_ARE_EQUAL(sendInputCmd1.ID(), sendInputCmd1.ID());
     }
+
+    void SerializationTests::RoundtripLegacyToModernActions()
+    {
+        static constexpr std::string_view oldSettingsJson{ R"(
+        {
+            "actions": [
+                {
+                    "name": "foo",
+                    "id": "Test.SendInput",
+                    "command": { "action": "sendInput", "input": "just some input" },
+                    "keys": "ctrl+shift+w"
+                },
+                {
+                    "command": "unbound",
+                    "keys": "ctrl+shift+x"
+                }
+            ]
+        })" };
+
+        // modern style:
+        // - no "unbound" actions, these are just keybindings that have no id
+        // - no keys in actions, these are keybindings with an id
+        static constexpr std::string_view newSettingsJson{ R"(
+        {
+            "actions": [
+                {
+                    "name": "foo",
+                    "command": { "action": "sendInput", "input": "just some input" },
+                    "id": "Test.SendInput"
+                }
+            ],
+            "keybindings": [
+                {
+                    "id": "Test.SendInput",
+                    "keys": "ctrl+shift+w"
+                },
+                {
+                    "id": null,
+                    "keys": "ctrl+shift+x"
+                }
+            ]
+        })" };
+
+        implementation::SettingsLoader loader{ oldSettingsJson, implementation::LoadStringResource(IDR_DEFAULTS) };
+        loader.MergeInboxIntoUserSettings();
+        loader.FinalizeLayering();
+        VERIFY_IS_TRUE(loader.FixupUserSettings(), L"Validate that this will indicate we need to write them back to disk");
+        const auto settings = winrt::make_self<implementation::CascadiaSettings>(std::move(loader));
+        const auto oldResult{ settings->ToJson() };
+
+        implementation::SettingsLoader newLoader{ newSettingsJson, implementation::LoadStringResource(IDR_DEFAULTS) };
+        newLoader.MergeInboxIntoUserSettings();
+        newLoader.FinalizeLayering();
+        VERIFY_IS_FALSE(newLoader.FixupUserSettings(), L"Validate that there is no need to write back to disk");
+        const auto newSettings = winrt::make_self<implementation::CascadiaSettings>(std::move(newLoader));
+        const auto newResult{ newSettings->ToJson() };
+
+        VERIFY_ARE_EQUAL(toString(newResult), toString(oldResult));
+    }
+
+    void SerializationTests::MultipleActionsAreCollapsed()
+    {
+        static constexpr std::string_view oldSettingsJson{ R"(
+        {
+            "actions": [
+                {
+                    "name": "foo",
+                    "icon": "myCoolIconPath.png",
+                    "command": { "action": "sendInput", "input": "just some input" },
+                    "keys": "ctrl+shift+w"
+                },
+                {
+                    "command": { "action": "sendInput", "input": "just some input" },
+                    "keys": "ctrl+shift+x"
+                }
+            ]
+        })" };
+
+        // modern style:
+        // - multiple action blocks whose purpose is simply to define more keybindings for the same action
+        //   get collapsed into one action block, with the name and iconpath preserved and have multiple keybindings instead
+        static constexpr std::string_view newSettingsJson{ R"(
+        {
+            "actions": [
+                {
+                    "name": "foo",
+                    "icon": "myCoolIconPath.png",
+                    "command": { "action": "sendInput", "input": "just some input" },
+                    "id": "User.sendInput.)" SEND_INPUT_ARCH_SPECIFIC_ACTION_HASH R"("
+                }
+            ],
+            "keybindings": [
+                {
+                    "keys": "ctrl+shift+w",
+                    "id": "User.sendInput.)" SEND_INPUT_ARCH_SPECIFIC_ACTION_HASH R"("
+                },
+                {
+                    "keys": "ctrl+shift+x",
+                    "id": "User.sendInput.)" SEND_INPUT_ARCH_SPECIFIC_ACTION_HASH R"("
+                }
+            ]
+        })" };
+
+        implementation::SettingsLoader loader{ oldSettingsJson, implementation::LoadStringResource(IDR_DEFAULTS) };
+        loader.MergeInboxIntoUserSettings();
+        loader.FinalizeLayering();
+        VERIFY_IS_TRUE(loader.FixupUserSettings(), L"Validate that this will indicate we need to write them back to disk");
+        const auto settings = winrt::make_self<implementation::CascadiaSettings>(std::move(loader));
+        const auto oldResult{ settings->ToJson() };
+
+        implementation::SettingsLoader newLoader{ newSettingsJson, implementation::LoadStringResource(IDR_DEFAULTS) };
+        newLoader.MergeInboxIntoUserSettings();
+        newLoader.FinalizeLayering();
+        VERIFY_IS_FALSE(newLoader.FixupUserSettings(), L"Validate that there is no need to write back to disk");
+        const auto newSettings = winrt::make_self<implementation::CascadiaSettings>(std::move(newLoader));
+        const auto newResult{ newSettings->ToJson() };
+
+        VERIFY_ARE_EQUAL(toString(newResult), toString(oldResult));
+    }
 }