diff --git a/src/libutil/config.cc b/src/libutil/config.cc
index 8e06273ee..17380b6d8 100644
--- a/src/libutil/config.cc
+++ b/src/libutil/config.cc
@@ -88,10 +88,9 @@ 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;
@@ -123,7 +122,10 @@ 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 &) { }
             } else if (!ignoreMissing) {
                 throw Error("file '%1%' included from '%2%' not found", p, path);
             }
@@ -143,6 +145,12 @@ 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 (auto & [name, value] : parsedContents)
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