diff --git a/src/libstore/globals.cc b/src/libstore/globals.cc
index 9c25d9868..0aecd2b6a 100644
--- a/src/libstore/globals.cc
+++ b/src/libstore/globals.cc
@@ -111,7 +111,14 @@ Settings::Settings()
 
 void loadConfFile()
 {
-    globalConfig.applyConfigFile(settings.nixConfDir + "/nix.conf");
+    auto applyConfigFile = [&](const Path & path) {
+        try {
+            std::string contents = readFile(path);
+            globalConfig.applyConfig(contents, path);
+        } catch (SysError &) { }
+    };
+
+    applyConfigFile(settings.nixConfDir + "/nix.conf");
 
     /* We only want to send overrides to the daemon, i.e. stuff from
        ~/.nix/nix.conf or the command line. */
@@ -119,7 +126,7 @@ void loadConfFile()
 
     auto files = settings.nixUserConfFiles;
     for (auto file = files.rbegin(); file != files.rend(); file++) {
-        globalConfig.applyConfigFile(*file);
+        applyConfigFile(*file);
     }
 
     auto nixConfEnv = getEnv("NIX_CONFIG");
diff --git a/src/libutil/config.cc b/src/libutil/config.cc
index 5748a93d7..2535b410f 100644
--- a/src/libutil/config.cc
+++ b/src/libutil/config.cc
@@ -86,10 +86,9 @@ void Config::getSettings(std::map<std::string, SettingInfo> & res, bool overridd
             res.emplace(opt.first, SettingInfo{opt.second.setting->to_string(), opt.second.setting->description});
 }
 
-void AbstractConfig::applyConfig(const std::string & contents, const std::string & path) {
-    unsigned int pos = 0;
 
-    std::vector<std::pair<std::string, std::string>> parsedContents;
+static void applyConfigInner(const std::string & contents, const std::string & path, std::vector<std::pair<std::string, std::string>> & parsedContents) {
+    unsigned int pos = 0;
 
     while (pos < contents.size()) {
         std::string line;
@@ -120,7 +119,12 @@ void AbstractConfig::applyConfig(const std::string & contents, const std::string
                 throw UsageError("illegal configuration line '%1%' in '%2%'", line, path);
             auto p = absPath(tokens[1], dirOf(path));
             if (pathExists(p)) {
-                applyConfigFile(p);
+                try {
+                    std::string includedContents = readFile(path);
+                    applyConfigInner(includedContents, p, parsedContents);
+                } catch (SysError &) {
+                    // TODO: Do we actually want to ignore this? Or is it better to fail?
+                }
             } else if (!ignoreMissing) {
                 throw Error("file '%1%' included from '%2%' not found", p, path);
             }
@@ -140,6 +144,12 @@ void AbstractConfig::applyConfig(const std::string & contents, const std::string
             concatStringsSep(" ", Strings(i, tokens.end())),
         });
     };
+}
+
+void AbstractConfig::applyConfig(const std::string & contents, const std::string & path) {
+    std::vector<std::pair<std::string, std::string>> parsedContents;
+
+    applyConfigInner(contents, path, parsedContents);
 
     // First apply experimental-feature related settings
     for (const auto & [name, value] : parsedContents)
@@ -152,14 +162,6 @@ void AbstractConfig::applyConfig(const std::string & contents, const std::string
             set(name, value);
 }
 
-void AbstractConfig::applyConfigFile(const Path & path)
-{
-    try {
-        std::string contents = readFile(path);
-        applyConfig(contents, path);
-    } catch (SysError &) { }
-}
-
 void Config::resetOverridden()
 {
     for (auto & s : _settings)
diff --git a/src/libutil/config.hh b/src/libutil/config.hh
index 082119dbe..3e232d224 100644
--- a/src/libutil/config.hh
+++ b/src/libutil/config.hh
@@ -82,12 +82,6 @@ public:
      */
     void applyConfig(const std::string & contents, const std::string & path = "<unknown>");
 
-    /**
-     * Applies a nix configuration file
-     * - path: the location of the config file to apply
-     */
-    void applyConfigFile(const Path & path);
-
     /**
      * Resets the `overridden` flag of all Settings
      */
diff --git a/tests/functional/init.sh b/tests/functional/init.sh
index c420e8c9f..d697b1a30 100755
--- a/tests/functional/init.sh
+++ b/tests/functional/init.sh
@@ -20,7 +20,7 @@ cat > "$NIX_CONF_DIR"/nix.conf <<EOF
 build-users-group =
 keep-derivations = false
 sandbox = false
-experimental-features = nix-command flakes
+experimental-features = nix-command
 gc-reserved-space = 0
 substituters =
 flake-registry = $TEST_ROOT/registry.json
@@ -31,6 +31,7 @@ EOF
 
 cat > "$NIX_CONF_DIR"/nix.conf.extra <<EOF
 fsync-metadata = false
+extra-experimental-features = flakes
 !include nix.conf.extra.not-there
 EOF