diff --git a/lib/internal/test_runner/runner.js b/lib/internal/test_runner/runner.js
index 8e4c18fd726009..aae7564e42b95e 100644
--- a/lib/internal/test_runner/runner.js
+++ b/lib/internal/test_runner/runner.js
@@ -413,34 +413,22 @@ function runTestFile(path, filesWatcher, opts) {
 function watchFiles(testFiles, opts) {
   const runningProcesses = new SafeMap();
   const runningSubtests = new SafeMap();
-  const watcher = new FilesWatcher({ __proto__: null, debounce: 200, mode: 'filter', signal: opts.signal });
+  const watcherMode = opts.hasFiles ? 'filter' : 'all';
+  const watcher = new FilesWatcher({ __proto__: null, debounce: 200, mode: watcherMode, signal: opts.signal });
+  if (!opts.hasFiles) {
+    watcher.watchPath(process.cwd()); // TODO: https://github.com/nodejs/node/issues/53867 before closing this MR
+  }
   const filesWatcher = { __proto__: null, watcher, runningProcesses, runningSubtests };
   opts.root.harness.watching = true;
-  // Watch for created/deleted files in the current directory
-  const allFilesWatcher = new FilesWatcher({ __proto__: null, debounce: 200, mode: 'all', signal: opts.signal });
-  allFilesWatcher.watchPath(process.cwd());
-  allFilesWatcher.on('changed', ({ owners, eventType }) => {
-    if (eventType === 'rename') {
-      const updatedTestFiles = createTestFileList(opts.globPatterns);
-
-      const newFiles = ArrayPrototypeFilter(updatedTestFiles, (x) => !ArrayPrototypeIncludes(testFiles, x));
-
-      testFiles = updatedTestFiles;
-      newFiles.forEach((newFile) => {
-        watcher.emit('changed', { __proto__: null, owners: new SafeSet().add(newFile), eventType: 'rename' });
-      });
-    }
-  });
   // Watch for changes in current filtered files
   watcher.on('changed', ({ owners, eventType }) => {
     if (!opts.hasFiles && eventType === 'rename') {
       const updatedTestFiles = createTestFileList(opts.globPatterns);
 
       const newFileName = ArrayPrototypeFind(updatedTestFiles, (x) => !ArrayPrototypeIncludes(testFiles, x));
-      const previousFileName = ArrayPrototypeFind(testFiles, (x) => !ArrayPrototypeIncludes(updatedTestFiles, x));
 
-      // When file renamed
-      if (newFileName && previousFileName) {
+      // When file renamed (created / deleted) we need to update the watcher
+      if (newFileName) {
         owners = new SafeSet().add(newFileName);
         watcher.filterFile(resolve(newFileName), owners);
       }
diff --git a/lib/internal/watch_mode/files_watcher.js b/lib/internal/watch_mode/files_watcher.js
index 7577ce94b25b62..ca9210e17244a5 100644
--- a/lib/internal/watch_mode/files_watcher.js
+++ b/lib/internal/watch_mode/files_watcher.js
@@ -162,9 +162,18 @@ class FilesWatcher extends EventEmitter {
     if (this.#passthroughIPC) {
       this.#setupIPC(child);
     }
-    if (this.#mode !== 'filter') {
-      return;
-    }
+    /*
+    * TODO: Remove this comment
+    *
+    * I'm leaving this comment here to make sure we discuss this:
+    * Why were we filtering files only in filter mode?
+    *
+    * No tests are failing after removing this condition.
+    *
+    * if (this.#mode !== 'filter') {
+    *   return;
+    * }
+    */
     child.on('message', (message) => {
       try {
         if (ArrayIsArray(message['watch:require'])) {