diff --git a/src/BlockTemplatesController.php b/src/BlockTemplatesController.php
index 48fae793464..c8abf43ce5c 100644
--- a/src/BlockTemplatesController.php
+++ b/src/BlockTemplatesController.php
@@ -175,16 +175,10 @@ public function add_block_templates( $query_result, $query, $template_type ) {
 		// @todo: Add apply_filters to _gutenberg_get_template_files() in Gutenberg to prevent duplication of logic.
 		foreach ( $template_files as $template_file ) {
 
-			// Avoid adding the same template if it's already in the array of $query_result.
-			if (
-				array_filter(
-					$query_result,
-					function( $query_result_template ) use ( $template_file ) {
-						return $query_result_template->slug === $template_file->slug &&
-								$query_result_template->theme === $template_file->theme;
-					}
-				)
-			) {
+			// If we have a template which is eligible for a fallback, we need to explicitly tell Gutenberg that
+			// it has a theme file (because it is using the fallback template file). And then `continue` to avoid
+			// adding duplicates.
+			if ( BlockTemplateUtils::set_has_theme_file_if_fallback_is_available( $query_result, $template_file ) ) {
 				continue;
 			}
 
@@ -348,14 +342,7 @@ function ( $template ) use ( $template_slug ) {
 			}
 
 			// If the theme has an archive-product.html template, but not a taxonomy-product_cat.html template let's use the themes archive-product.html template.
-			if ( 'taxonomy-product_cat' === $template_slug && ! BlockTemplateUtils::theme_has_template( 'taxonomy-product_cat' ) && BlockTemplateUtils::theme_has_template( 'archive-product' ) ) {
-				$template_file = get_stylesheet_directory() . '/' . self::TEMPLATES_DIR_NAME . '/archive-product.html';
-				$templates[]   = BlockTemplateUtils::create_new_block_template_object( $template_file, $template_type, $template_slug, true );
-				continue;
-			}
-
-			// If the theme has an archive-product.html template, but not a taxonomy-product_tag.html template let's use the themes archive-product.html template.
-			if ( 'taxonomy-product_tag' === $template_slug && ! BlockTemplateUtils::theme_has_template( 'taxonomy-product_tag' ) && BlockTemplateUtils::theme_has_template( 'archive-product' ) ) {
+			if ( BlockTemplateUtils::template_is_eligible_for_product_archive_fallback( $template_slug ) ) {
 				$template_file = get_stylesheet_directory() . '/' . self::TEMPLATES_DIR_NAME . '/archive-product.html';
 				$templates[]   = BlockTemplateUtils::create_new_block_template_object( $template_file, $template_type, $template_slug, true );
 				continue;
diff --git a/src/Utils/BlockTemplateUtils.php b/src/Utils/BlockTemplateUtils.php
index 3ef2e3aa318..52ca21ffa48 100644
--- a/src/Utils/BlockTemplateUtils.php
+++ b/src/Utils/BlockTemplateUtils.php
@@ -281,4 +281,55 @@ public static function supports_block_templates() {
 
 		return true;
 	}
+
+	/**
+	 * Checks if we can fallback to the `archive-product` template for a given slug
+	 *
+	 * `taxonomy-product_cat` and `taxonomy-product_tag` templates can generally use the
+	 * `archive-product` as a fallback if there are no specific overrides.
+	 *
+	 * @param string $template_slug Slug to check for fallbacks.
+	 * @return boolean
+	 */
+	public static function template_is_eligible_for_product_archive_fallback( $template_slug ) {
+		$eligible_for_fallbacks = array( 'taxonomy-product_cat', 'taxonomy-product_tag' );
+
+		return in_array( $template_slug, $eligible_for_fallbacks, true )
+			&& ! self::theme_has_template( $template_slug )
+			&& self::theme_has_template( 'archive-product' );
+	}
+
+	/**
+	 * Sets the `has_theme_file` to `true` for templates with fallbacks
+	 *
+	 * There are cases (such as tags and categories) in which fallback templates
+	 * can be used; so, while *technically* the theme doesn't have a specific file
+	 * for them, it is important that we tell Gutenberg that we do, in fact,
+	 * have a theme file (i.e. the fallback one).
+	 *
+	 * **Note:** this function changes the array that has been passed.
+	 *
+	 * It returns `true` if anything was changed, `false` otherwise.
+	 *
+	 * @param array $query_result Array of template objects.
+	 * @param array $template A specific template object which could have a fallback.
+	 *
+	 * @return boolean
+	 */
+	public static function set_has_theme_file_if_fallback_is_available( $query_result, $template ) {
+		foreach ( $query_result as &$query_result_template ) {
+			if (
+				$query_result_template->slug === $template->slug
+				&& $query_result_template->theme === $template->theme
+			) {
+				if ( self::template_is_eligible_for_product_archive_fallback( $template->slug ) ) {
+					$query_result_template->has_theme_file = true;
+				}
+
+				return true;
+			}
+		}
+
+		return false;
+	}
 }