diff --git a/source/deletion_lists_update.h b/source/deletion_lists_update.h
index 0048e3b..7beda98 100644
--- a/source/deletion_lists_update.h
+++ b/source/deletion_lists_update.h
@@ -122,9 +122,8 @@ static const char* config_dirs_to_delete[] = {
 };
 
 // Switch directories to delete
-// NOTE: .packages is intentionally excluded - UltraHand package cache, preserve during updates
+// NOTE: .overlays and .packages excluded - preserve UltraHand .offload hide state during updates
 static const char* switch_dirs_to_delete[] = {
-    "sd:/switch/.overlays",
     "sd:/switch/90DNS_tester",
     "sd:/switch/aio-switch-updater",
     "sd:/switch/amsPLUS-downloader",
diff --git a/source/install.c b/source/install.c
index 015b5b6..8022b15 100644
--- a/source/install.c
+++ b/source/install.c
@@ -275,6 +275,167 @@ int folder_copy_with_progress_v2(const char *src, const char *dst, const char *d
     return res;
 }
 
+// Copy one directory (e.g. .overlays or .packages) with .offload awareness: if the same
+// name exists in dst_offload, copy pack's version into dst_offload (update in place);
+// otherwise copy to dst_parent. Used only for update mode to preserve UltraHand hide state.
+static int copy_dir_offload_aware(const char *src_parent, const char *dst_parent, const char *dst_offload,
+    const char *display_name, int *copied, int total, u32 start_x, u32 start_y, int *last_percent)
+{
+    DIR dir;
+    FILINFO fno;
+    int res;
+    char src_full[256];
+    char dst_main[256];
+    char dst_off[256];
+
+    res = f_opendir(&dir, src_parent);
+    if (res != FR_OK)
+        return res;
+
+    while (1) {
+        res = f_readdir(&dir, &fno);
+        if (res != FR_OK || fno.fname[0] == 0) break;
+        if (fno.fname[0] == '.' && (fno.fname[1] == '\0' || (fno.fname[1] == '.' && fno.fname[2] == '\0')))
+            continue;
+        if (strcmp(fno.fname, ".offload") == 0)
+            continue;
+
+        install_combine_path(src_full, sizeof(src_full), src_parent, fno.fname);
+        install_combine_path(dst_off, sizeof(dst_off), dst_offload, fno.fname);
+
+        if (install_path_exists(dst_off)) {
+            res = (fno.fattrib & AM_DIR) ? folder_copy(src_full, dst_offload) : file_copy(src_full, dst_off);
+        } else {
+            install_combine_path(dst_main, sizeof(dst_main), dst_parent, fno.fname);
+            res = (fno.fattrib & AM_DIR) ? folder_copy(src_full, dst_parent) : file_copy(src_full, dst_main);
+        }
+        (*copied)++;
+        if (total > 0) {
+            int percent = (*copied * 100) / total;
+            if (percent != *last_percent || *copied % 20 == 0) {
+                gfx_con_setpos(start_x, start_y);
+                install_set_color(COLOR_CYAN);
+                gfx_printf("  Kopiere: %s [%3d%%] (%d/%d)", display_name, percent, *copied, total);
+                install_set_color(COLOR_WHITE);
+                *last_percent = percent;
+            }
+        }
+        if (res != FR_OK) {
+            f_closedir(&dir);
+            return res;
+        }
+    }
+    f_closedir(&dir);
+    return FR_OK;
+}
+
+// Copy switch/ folder for update mode only: preserve SD's .overlays/.offload and
+// .packages/.offload; for items that exist there, update in place instead of main area.
+int folder_copy_switch_update_offload_aware(const char *src_switch, const char *dst_base, const char *display_name) {
+    char dst_switch[256];
+    char src_overlays[256], src_packages[256];
+    char dst_overlays[256], dst_offload_ovl[256], dst_packages[256], dst_offload_pkg[256];
+    DIR dir;
+    FILINFO fno;
+    int res;
+    int copied = 0;
+    int total;
+    int last_percent = -1;
+    u32 start_x, start_y;
+
+    install_combine_path(dst_switch, sizeof(dst_switch), dst_base, "switch");
+
+    if (!install_path_exists(src_switch)) {
+        install_set_color(COLOR_ORANGE);
+        gfx_printf("  Ueberspringe: %s (nicht gefunden)\n", display_name);
+        install_set_color(COLOR_WHITE);
+        return FR_NO_FILE;
+    }
+
+    total = install_count_directory_items(src_switch);
+    if (total == 0) {
+        f_mkdir(dst_switch);
+        return FR_OK;
+    }
+
+    gfx_con_getpos(&start_x, &start_y);
+    install_set_color(COLOR_CYAN);
+    gfx_printf("  Kopiere: %s [  0%%] (0/%d)", display_name, total);
+    install_set_color(COLOR_WHITE);
+
+    res = f_mkdir(dst_switch);
+    if (res != FR_OK && res != FR_EXIST) return res;
+
+    res = f_opendir(&dir, src_switch);
+    if (res != FR_OK) return res;
+
+    while (1) {
+        res = f_readdir(&dir, &fno);
+        if (res != FR_OK || fno.fname[0] == 0) break;
+        if (fno.fname[0] == '.' && (fno.fname[1] == '\0' || (fno.fname[1] == '.' && fno.fname[2] == '\0')))
+            continue;
+
+        if (strcmp(fno.fname, ".overlays") == 0) {
+            install_combine_path(src_overlays, sizeof(src_overlays), src_switch, ".overlays");
+            install_combine_path(dst_overlays, sizeof(dst_overlays), dst_switch, ".overlays");
+            install_combine_path(dst_offload_ovl, sizeof(dst_offload_ovl), dst_overlays, ".offload");
+            if (!install_path_exists(src_overlays)) { f_closedir(&dir); continue; }
+            f_mkdir(dst_overlays);
+            f_mkdir(dst_offload_ovl);
+            res = copy_dir_offload_aware(src_overlays, dst_overlays, dst_offload_ovl, display_name,
+                &copied, total, start_x, start_y, &last_percent);
+        } else if (strcmp(fno.fname, ".packages") == 0) {
+            install_combine_path(src_packages, sizeof(src_packages), src_switch, ".packages");
+            install_combine_path(dst_packages, sizeof(dst_packages), dst_switch, ".packages");
+            install_combine_path(dst_offload_pkg, sizeof(dst_offload_pkg), dst_packages, ".offload");
+            if (!install_path_exists(src_packages)) { f_closedir(&dir); continue; }
+            f_mkdir(dst_packages);
+            f_mkdir(dst_offload_pkg);
+            {   /* package.ini into main area */
+                char src_ini[256], dst_ini[256];
+                s_printf(src_ini, "%s/package.ini", src_packages);
+                s_printf(dst_ini, "%s/package.ini", dst_packages);
+                if (install_path_exists(src_ini)) {
+                    res = file_copy(src_ini, dst_ini);
+                    if (res == FR_OK) copied++;
+                }
+            }
+            res = copy_dir_offload_aware(src_packages, dst_packages, dst_offload_pkg, display_name,
+                &copied, total, start_x, start_y, &last_percent);
+        } else {
+            char src_full[256], dst_full[256];
+            install_combine_path(src_full, sizeof(src_full), src_switch, fno.fname);
+            install_combine_path(dst_full, sizeof(dst_full), dst_switch, fno.fname);
+            if (fno.fattrib & AM_DIR)
+                res = folder_copy(src_full, dst_switch);
+            else
+                res = file_copy(src_full, dst_full);
+            copied++;
+        }
+        if (res != FR_OK) break;
+        if (total > 0 && (copied % 20 == 0 || copied == total)) {
+            int percent = (copied * 100) / total;
+            gfx_con_setpos(start_x, start_y);
+            install_set_color(COLOR_CYAN);
+            gfx_printf("  Kopiere: %s [%3d%%] (%d/%d)", display_name, percent, copied, total);
+            install_set_color(COLOR_WHITE);
+        }
+    }
+    f_closedir(&dir);
+
+    gfx_con_setpos(start_x, start_y);
+    if (res == FR_OK) {
+        install_set_color(COLOR_GREEN);
+        gfx_printf("  Kopiere: %s [100%%] (%d/%d) - Fertig!\n", display_name, copied, total);
+        install_set_color(COLOR_WHITE);
+    } else {
+        install_set_color(COLOR_RED);
+        gfx_printf("  Kopiere: %s - Fehlgeschlagen!\n", display_name);
+        install_set_color(COLOR_WHITE);
+    }
+    return res;
+}
+
 // Recursive folder delete with progress tracking (shared implementation)
 int folder_delete_progress_recursive(const char *path, int *deleted, int total, u32 start_x, u32 start_y, const char *display_name, int *last_percent) {
     DIR dir;
diff --git a/source/install.h b/source/install.h
index d1a86a2..04f18b3 100644
--- a/source/install.h
+++ b/source/install.h
@@ -40,3 +40,5 @@ int delete_path_lists_grouped(const char *folder_display_name, ...);
 int folder_delete_single_with_progress(const char *path, const char *display_name);
 int folder_delete_progress_recursive(const char *path, int *deleted, int total, u32 start_x, u32 start_y, const char *display_name, int *last_percent);
 int folder_copy_with_progress_v2(const char *src, const char *dst, const char *display_name);
+// Update-only: copy switch/ preserving .overlays/.offload and .packages/.offload (UltraHand hide state)
+int folder_copy_switch_update_offload_aware(const char *src_switch, const char *dst_base, const char *display_name);
diff --git a/source/install_update.c b/source/install_update.c
index 3b1e662..cf04d52 100644
--- a/source/install_update.c
+++ b/source/install_update.c
@@ -103,7 +103,7 @@ int update_mode_install(omninx_variant_t variant) {
     if (res != FR_OK && res != FR_NO_FILE) return res;
 
     s_printf(src_path, "%s/switch", staging);
-    res = folder_copy_with_progress_v2(src_path, "sd:/", "switch/");
+    res = folder_copy_switch_update_offload_aware(src_path, "sd:/", "switch/");
     if (res != FR_OK && res != FR_NO_FILE) return res;
 
     s_printf(src_path, "%s/warmboot_mariko", staging);