diff --git a/api/config.py b/api/config.py
index 5028a92c7..2704d066d 100644
--- a/api/config.py
+++ b/api/config.py
@@ -510,15 +510,18 @@ def get_config_for_profile_home(profile_home: "Path | str | None") -> dict:
         target = Path(profile_home).expanduser()
     except Exception:
         return get_config()
-    if not target.exists():
-        return {}
     # If the ambient resolver already points at this profile home, defer to
-    # get_config() so in-memory overrides (monkeypatched cfg) are honored.
+    # get_config() so in-memory overrides (monkeypatched cfg) are honored. This
+    # MUST run before the nonexistent-home guard below: a matching ambient home
+    # whose directory doesn't physically exist yet (fresh install, monkeypatched
+    # cfg) must still resolve through get_config(), not return {} (#4516 gate).
     try:
         if _get_config_path().parent == target:
             return get_config()
     except Exception:
         pass
+    if not target.exists():
+        return {}
     # Read the profile file directly and apply documented defaults locally so the
     # returned dict matches ambient get_config() shape (including built-in
     # personalities) without mutating any global cache state.
diff --git a/tests/test_issue3294_profile_toolset_scoping.py b/tests/test_issue3294_profile_toolset_scoping.py
index 7799f53b1..d3e4b40de 100644
--- a/tests/test_issue3294_profile_toolset_scoping.py
+++ b/tests/test_issue3294_profile_toolset_scoping.py
@@ -108,6 +108,22 @@ def test_matching_home_defers_to_get_config(_two_profiles):
     ]
 
 
+def test_matching_ambient_home_that_does_not_exist_still_defers_to_get_config(_two_profiles, monkeypatch, tmp_path):
+    """Regression (#4516 gate): the nonexistent-home guard must run AFTER the
+    ambient-resolver short-circuit. A home that matches the ambient config path
+    but whose directory doesn't physically exist (fresh install / monkeypatched
+    cfg with no dir on disk) must still defer to get_config() — NOT return {}."""
+    cfg, default_home, profile_b_home = _two_profiles
+    ghost_ambient = tmp_path / "ghost-ambient"
+    monkeypatch.setenv("HERMES_CONFIG_PATH", str(ghost_ambient / "config.yaml"))
+    cfg.reload_config()
+    assert not ghost_ambient.exists()
+    # The requested home matches the (nonexistent) ambient home → must defer to
+    # get_config(), honoring the in-memory cfg, not short-circuit to {}.
+    result = cfg.get_config_for_profile_home(ghost_ambient)
+    assert result == cfg.get_config()
+
+
 def test_empty_or_none_home_falls_back_to_get_config(_two_profiles):
     """A missing/empty profile home (ImportError fallback path in the worker)
     must not crash — it falls back to the ambient get_config()."""