diff --git a/arch/x86/kvm/svm/nested.c b/arch/x86/kvm/svm/nested.c
index 961804df5f45..b340dc9991ad 100644
--- a/arch/x86/kvm/svm/nested.c
+++ b/arch/x86/kvm/svm/nested.c
@@ -160,6 +160,16 @@ void nested_vmcb02_recalc_intercepts(struct vcpu_svm *svm)
 	if (!intercept_smi)
 		vmcb_clr_intercept(&vmcb02->control, INTERCEPT_SMI);
 
+	/*
+	 * Intercept PAUSE if and only if L1 wants to.  KVM intercepts PAUSE so
+	 * that a vCPU that may be spinning waiting for a lock can be scheduled
+	 * out in favor of the vCPU that holds said lock.  KVM doesn't support
+	 * yielding across L2 vCPUs, as KVM has limited visilibity into which
+	 * L2 vCPUs are in the same L2 VM, i.e. may be contending for locks.
+	 */
+	if (!vmcb12_is_intercept(&svm->nested.ctl, INTERCEPT_PAUSE))
+		vmcb_clr_intercept(&vmcb02->control, INTERCEPT_PAUSE);
+
 	if (nested_vmcb_needs_vls_intercept(svm)) {
 		/*
 		 * If the virtual VMLOAD/VMSAVE is not enabled for the L2,
@@ -819,7 +829,6 @@ static void nested_vmcb02_prepare_control(struct vcpu_svm *svm)
 	struct vmcb *vmcb02 = svm->nested.vmcb02.ptr;
 	struct vmcb *vmcb01 = svm->vmcb01.ptr;
 	struct kvm_vcpu *vcpu = &svm->vcpu;
-	u32 pause_count12, pause_thresh12;
 
 	nested_svm_transition_tlb_flush(vcpu);
 
@@ -947,31 +956,13 @@ static void nested_vmcb02_prepare_control(struct vcpu_svm *svm)
 		vmcb02->control.misc_ctl2 |= SVM_MISC2_ENABLE_V_VMLOAD_VMSAVE;
 
 	if (guest_cpu_cap_has(vcpu, X86_FEATURE_PAUSEFILTER))
-		pause_count12 = vmcb12_ctrl->pause_filter_count;
+		vmcb02->control.pause_filter_count = vmcb12_ctrl->pause_filter_count;
 	else
-		pause_count12 = 0;
+		vmcb02->control.pause_filter_count = 0;
 	if (guest_cpu_cap_has(vcpu, X86_FEATURE_PFTHRESHOLD))
-		pause_thresh12 = vmcb12_ctrl->pause_filter_thresh;
+		vmcb02->control.pause_filter_thresh = vmcb12_ctrl->pause_filter_thresh;
 	else
-		pause_thresh12 = 0;
-	if (kvm_pause_in_guest(svm->vcpu.kvm)) {
-		/* use guest values since host doesn't intercept PAUSE */
-		vmcb02->control.pause_filter_count = pause_count12;
-		vmcb02->control.pause_filter_thresh = pause_thresh12;
-
-	} else {
-		/* start from host values otherwise */
-		vmcb02->control.pause_filter_count = vmcb01->control.pause_filter_count;
-		vmcb02->control.pause_filter_thresh = vmcb01->control.pause_filter_thresh;
-
-		/* ... but ensure filtering is disabled if so requested.  */
-		if (vmcb12_is_intercept(vmcb12_ctrl, INTERCEPT_PAUSE)) {
-			if (!pause_count12)
-				vmcb02->control.pause_filter_count = 0;
-			if (!pause_thresh12)
-				vmcb02->control.pause_filter_thresh = 0;
-		}
-	}
+		vmcb02->control.pause_filter_thresh = 0;
 
 	/*
 	 * Take ALLOW_LARGER_RAP from vmcb12 even though it should be safe to
@@ -1298,12 +1289,6 @@ void nested_svm_vmexit(struct vcpu_svm *svm)
 	/* in case we halted in L2 */
 	kvm_set_mp_state(vcpu, KVM_MP_STATE_RUNNABLE);
 
-	if (!kvm_pause_in_guest(vcpu->kvm)) {
-		vmcb01->control.pause_filter_count = vmcb02->control.pause_filter_count;
-		vmcb_mark_dirty(vmcb01, VMCB_INTERCEPTS);
-
-	}
-
 	/*
 	 * Invalidate last_bus_lock_rip unless KVM is still waiting for the
 	 * guest to make forward progress before re-enabling bus lock detection.
diff --git a/arch/x86/kvm/svm/svm.c b/arch/x86/kvm/svm/svm.c
index e7fdd7a9c280..e02a38da5296 100644
--- a/arch/x86/kvm/svm/svm.c
+++ b/arch/x86/kvm/svm/svm.c
@@ -913,7 +913,15 @@ static void grow_ple_window(struct kvm_vcpu *vcpu)
 	struct vmcb_control_area *control = &svm->vmcb->control;
 	int old = control->pause_filter_count;
 
-	if (kvm_pause_in_guest(vcpu->kvm))
+	/* Adjusting pause_filter_count makes no sense if PLE is disabled.  */
+	WARN_ON_ONCE(kvm_pause_in_guest(vcpu->kvm));
+
+	/*
+	 * While running L2, KVM should intercept PAUSE if and only if L1 wants
+	 * to intercept PAUSE, and L1's intercept should take priority, i.e.
+	 * KVM should never handle a PAUSE intercept from L2.
+	 */
+	if (WARN_ON_ONCE(is_guest_mode(vcpu)))
 		return;
 
 	control->pause_filter_count = __grow_ple_window(old,
@@ -934,7 +942,10 @@ static void shrink_ple_window(struct kvm_vcpu *vcpu)
 	struct vmcb_control_area *control = &svm->vmcb->control;
 	int old = control->pause_filter_count;
 
-	if (kvm_pause_in_guest(vcpu->kvm))
+	/* Adjusting pause_filter_count makes no sense if PLE is disabled.  */
+	WARN_ON_ONCE(kvm_pause_in_guest(vcpu->kvm));
+
+	if (is_guest_mode(vcpu))
 		return;
 
 	control->pause_filter_count =