diff --git a/backend/windmill-store/src/resources.rs b/backend/windmill-store/src/resources.rs
index a03d97c320..269edf2612 100644
--- a/backend/windmill-store/src/resources.rs
+++ b/backend/windmill-store/src/resources.rs
@@ -1345,6 +1345,12 @@ async fn create_resource_type(
 
     let is_fileset = resource_type.is_fileset.unwrap_or(false);
 
+    if is_fileset && resource_type.format_extension.is_some() {
+        return Err(Error::BadRequest(
+            "A fileset resource type cannot have a format_extension".to_string(),
+        ));
+    }
+
     sqlx::query!(
         "INSERT INTO resource_type
             (workspace_id, name, schema, description, created_by, format_extension, is_fileset, edited_at)
diff --git a/frontend/src/lib/components/FilesetEditor.svelte b/frontend/src/lib/components/FilesetEditor.svelte
index a811e1e363..96956e038a 100644
--- a/frontend/src/lib/components/FilesetEditor.svelte
+++ b/frontend/src/lib/components/FilesetEditor.svelte
@@ -32,28 +32,30 @@
 		selectedFileKey?.replace(/^\//, '')
 	)
 
+	function flushEditContent() {
+		if (selectedFileKey != null && selectedFileKey in files && files[selectedFileKey] !== editContent) {
+			files = { ...files, [selectedFileKey]: editContent }
+		}
+	}
+
 	function handleSelectPath(path: string) {
+		flushEditContent()
 		selectedPath = path
 		if (!path.endsWith('/') && path !== '') {
 			editContent = files[path] ?? ''
 		}
 	}
 
-	// Sync editContent → files → args reactively
-	$effect(() => {
-		const key = selectedFileKey
-		const content = editContent
-		if (key != null && key in files && files[key] !== content) {
-			files = { ...files, [key]: content }
-		}
-	})
-
-	// Sync files → args (strip / prefix, skip folder entries)
+	// Sync files → args, overlaying current editContent for the active file.
+	// This avoids spreading a new files object on every keystroke.
 	$effect(() => {
+		const currentKey = selectedFileKey
+		const currentContent = editContent
 		const newArgs: Record<string, any> = {}
 		for (const [key, value] of Object.entries(files)) {
 			if (!key.endsWith('/')) {
-				newArgs[key.replace(/^\//, '')] = value
+				const argKey = key.replace(/^\//, '')
+				newArgs[argKey] = key === currentKey ? currentContent : value
 			}
 		}
 		args = newArgs
diff --git a/frontend/src/lib/components/raw_apps/RawAppSidebar.svelte b/frontend/src/lib/components/raw_apps/RawAppSidebar.svelte
index 997d722eb2..859e9e5386 100644
--- a/frontend/src/lib/components/raw_apps/RawAppSidebar.svelte
+++ b/frontend/src/lib/components/raw_apps/RawAppSidebar.svelte
@@ -16,7 +16,7 @@
 	interface Props {
 		runnables: Record<string, Runnable>
 		selectedRunnable: string | undefined
-		files: Record<string, string> | undefined
+		files: Record<string, string>
 		modules?: Modules
 		onSelectFile?: (path: string) => void
 		selectedDocument: string | undefined
@@ -37,7 +37,7 @@
 	let {
 		runnables,
 		selectedRunnable = $bindable(),
-		files = $bindable(),
+		files = $bindable({}),
 		modules,
 		onSelectFile,
 		selectedDocument = $bindable(),
@@ -74,21 +74,6 @@
 		}
 	}
 
-	// Ensure files is always an object for FileExplorer binding
-	let explorerFiles: Record<string, string> = $state(files ?? {})
-
-	// Sync explorerFiles → files (parent binding)
-	$effect(() => {
-		files = explorerFiles
-	})
-
-	// Sync files → explorerFiles when files changes externally
-	$effect(() => {
-		if (files && files !== explorerFiles) {
-			explorerFiles = files
-		}
-	})
-
 	let fileExplorer: FileExplorer | undefined = $state()
 
 	function handleSelectPath(path: string) {
@@ -126,7 +111,7 @@
 	{/snippet}
 	<FileExplorer
 		bind:this={fileExplorer}
-		bind:files={explorerFiles}
+		bind:files
 		selectedPath={selectedDocument}
 		onSelectPath={handleSelectPath}
 		extraNodes={[{ name: 'wmill.ts', path: '/wmill.ts', isFolder: false }]}
diff --git a/frontend/src/routes/(root)/(logged)/resources/+page.svelte b/frontend/src/routes/(root)/(logged)/resources/+page.svelte
index bf1c1b2251..4f56ffa53c 100644
--- a/frontend/src/routes/(root)/(logged)/resources/+page.svelte
+++ b/frontend/src/routes/(root)/(logged)/resources/+page.svelte
@@ -247,7 +247,7 @@
 				schema: newResourceType.schema,
 				description: newResourceType.description,
 				format_extension: newResourceType.formatExtension,
-				is_fileset: newResourceType.isFileset ?? undefined
+				is_fileset: newResourceType.isFileset
 			}
 		})
 		resourceTypeDrawer?.closeDrawer?.()
@@ -658,7 +658,7 @@
 			>
 			<div>
 				{#if editResourceType.isFileset}
-					<Alert type="info" title="Fileset resource (.{editResourceType.formatExtension})">
+					<Alert type="info" title="Fileset resource type">
 						This resource type represents a collection of files. The schema cannot be edited.
 					</Alert>
 				{:else if editResourceType.formatExtension}