diff --git a/.changeset/api-override-deprecation-warning-defaults.md b/.changeset/api-override-deprecation-warning-defaults.md
new file mode 100644
index 0000000000..8616460390
--- /dev/null
+++ b/.changeset/api-override-deprecation-warning-defaults.md
@@ -0,0 +1,5 @@
+---
+'@backstage/frontend-defaults': patch
+---
+
+The `API_FACTORY_CONFLICT` error is now treated as a warning and will not prevent the app from starting.
diff --git a/.changeset/api-override-deprecation-warning.md b/.changeset/api-override-deprecation-warning.md
new file mode 100644
index 0000000000..91ed83efaf
--- /dev/null
+++ b/.changeset/api-override-deprecation-warning.md
@@ -0,0 +1,5 @@
+---
+'@backstage/frontend-app-api': patch
+---
+
+Updated the behavior of the new API override logic to log a deprecation warning instead of rejecting the override and blocking app startup, as was originally intended.
diff --git a/.patches/pr-32522.txt b/.patches/pr-32522.txt
new file mode 100644
index 0000000000..06f33f31b1
--- /dev/null
+++ b/.patches/pr-32522.txt
@@ -0,0 +1 @@
+Rolls back the immediate breaking change of API factory conflicts in the new frontend system, making it a deprecation warning instead.
\ No newline at end of file
diff --git a/packages/frontend-app-api/src/wiring/createSpecializedApp.test.tsx b/packages/frontend-app-api/src/wiring/createSpecializedApp.test.tsx
index 6c79002ad9..fe807a1384 100644
--- a/packages/frontend-app-api/src/wiring/createSpecializedApp.test.tsx
+++ b/packages/frontend-app-api/src/wiring/createSpecializedApp.test.tsx
@@ -289,7 +289,7 @@ describe('createSpecializedApp', () => {
     expect(mockAnalyticsApi).toHaveBeenCalled();
   });
 
-  it('should select the API factory from the owning plugin on conflict', () => {
+  it('should warn when API overrides would be blocked by new logic', () => {
     const testApiRef = createApiRef<{ value: string }>({ id: 'test.api' });
 
     const app = createSpecializedApp({
@@ -303,7 +303,7 @@ describe('createSpecializedApp', () => {
                 defineParams({
                   api: testApiRef,
                   deps: {},
-                  factory: () => ({ value: 'other' }),
+                  factory: () => ({ value: 'other-before' }),
                 }),
             }),
           ],
@@ -329,7 +329,7 @@ describe('createSpecializedApp', () => {
                 defineParams({
                   api: testApiRef,
                   deps: {},
-                  factory: () => ({ value: 'other' }),
+                  factory: () => ({ value: 'other-after' }),
                 }),
             }),
           ],
@@ -348,7 +348,8 @@ describe('createSpecializedApp', () => {
       }),
     ]);
 
-    expect(app.apis.get(testApiRef)).toEqual({ value: 'owner' });
+    // Old behavior: last factory wins
+    expect(app.apis.get(testApiRef)).toEqual({ value: 'other-after' });
   });
 
   it('should allow API overrides within the same plugin', () => {
diff --git a/packages/frontend-app-api/src/wiring/createSpecializedApp.tsx b/packages/frontend-app-api/src/wiring/createSpecializedApp.tsx
index f902500e9f..a400d0d499 100644
--- a/packages/frontend-app-api/src/wiring/createSpecializedApp.tsx
+++ b/packages/frontend-app-api/src/wiring/createSpecializedApp.tsx
@@ -428,13 +428,14 @@ function createApiFactories(options: {
             existingPluginId: acceptedPluginId,
           },
         });
-        if (shouldReplace) {
-          factoriesById.set(apiRefId, {
-            pluginId,
-            factory: apiFactory,
-          });
+        if (!shouldReplace) {
+          // eslint-disable-next-line no-console
+          console.warn(
+            `DEPRECATION WARNING: Plugin '${rejectedPluginId}' is overriding API '${apiRefId}' ` +
+              `from plugin '${acceptedPluginId}'. This will be blocked in a future release. ` +
+              `Please use a module for plugin '${acceptedPluginId}' instead.`,
+          );
         }
-        continue;
       }
 
       factoriesById.set(apiRefId, { pluginId, factory: apiFactory });
diff --git a/packages/frontend-defaults/src/maybeCreateErrorPage.tsx b/packages/frontend-defaults/src/maybeCreateErrorPage.tsx
index c0fb807deb..60e1dfa4f9 100644
--- a/packages/frontend-defaults/src/maybeCreateErrorPage.tsx
+++ b/packages/frontend-defaults/src/maybeCreateErrorPage.tsx
@@ -24,6 +24,7 @@ const DEFAULT_WARNING_CODES: Array<keyof AppErrorTypes> = [
   'EXTENSION_INPUT_DATA_IGNORED',
   'EXTENSION_INPUT_INTERNAL_IGNORED',
   'EXTENSION_OUTPUT_IGNORED',
+  'API_FACTORY_CONFLICT',
 ];
 
 function AppErrorItem(props: { error: AppError }): JSX.Element {