diff --git a/doc/changes/11866.md b/doc/changes/11866.md
new file mode 100644
index 00000000000..a68686470af
--- /dev/null
+++ b/doc/changes/11866.md
@@ -0,0 +1,5 @@
+- Introduce option `(implicit_transitive_deps
+  false-if-hidden-includes-supported)` that is equivalent to
+  `(implicit_transitive_deps false)` when `-H` is supported by the compiler
+  (OCaml >= 5.2) and equivalent to `(implicit_transitive_deps true)` otherwise.
+  (#11866, fixes #11212, @nojb)
\ No newline at end of file
diff --git a/doc/reference/dune-project/implicit_transitive_deps.rst b/doc/reference/dune-project/implicit_transitive_deps.rst
index 37ab008b2f8..cf6ec46ef6d 100644
--- a/doc/reference/dune-project/implicit_transitive_deps.rst
+++ b/doc/reference/dune-project/implicit_transitive_deps.rst
@@ -1,12 +1,25 @@
 implicit_transitive_deps
 ------------------------
 
-.. describe:: (implicit_transitive_deps ...)
+.. describe:: (implicit_transitive_deps <setting>)
 
-   Control whether transitive dependencies are made implicitly visible.
+   Control whether transitive dependencies are made implicitly visible during
+   compilation.
 
-   By default, Dune allows transitive dependencies of dependencies used when
-   compiling OCaml. However, this can be disabled by specifying:
+   ``<setting>`` is one of:
+
+   - ``true`` makes transitive dependencies implicitly visible. This is the
+     default.
+
+   - ``false`` only listed dependencies are visible. If the ``-H`` flag is
+     supported by the compiler (OCaml version >= 5.2) and Dune language version
+     is >= 1.17, Dune will pass the flag to the compiler, which avoids some
+     corner cases (see below).
+
+   - ``false-if-hidden-includes-supported`` only listed dependencies are visible
+     if the compiler supports the ``-H`` flag. Otherwise (OCaml version < 5.2),
+     the setting is ignored and all transitive dependencies are made visible.
+     Introduced in Dune 3.20.
 
    .. code:: dune
 
@@ -17,9 +30,9 @@ implicit_transitive_deps
 
    We recommend users experiment with this mode and report any problems.
 
-   Note that you must use ``threads.posix`` instead of ``threads`` when using
-   this mode. This isn't an important limitation, as ``threads.vm`` is
-   deprecated anyway.
+   Note that if ``-H`` flag is not being used, you must use ``threads.posix``
+   instead of ``threads`` when using this mode. This isn't an important
+   limitation, as ``threads.vm`` is deprecated anyway.
 
    In some situations, it can be desirable to selectively preserve the behavior
    of transitive dependencies' availability a library's users. For example, if
diff --git a/src/dune_lang/dune_project.ml b/src/dune_lang/dune_project.ml
index 402d22c4a2f..a41f05015bf 100644
--- a/src/dune_lang/dune_project.ml
+++ b/src/dune_lang/dune_project.ml
@@ -4,6 +4,68 @@ module Versioned_file = Dune_sexp.Versioned_file
 module Execution_parameters = Dune_engine.Execution_parameters
 module Compound_user_error = Dune_engine.Compound_user_error
 
+module Implicit_transitive_deps = struct
+  type t =
+    | Enabled
+    | Disabled
+    | Disabled_with_hidden_includes
+
+  let to_bool = function
+    | Enabled -> true
+    | Disabled | Disabled_with_hidden_includes -> false
+  ;;
+
+  module Stanza = struct
+    type mode = t
+
+    type t =
+      | Enabled
+      | Disabled
+      | Disabled_if_hidden_includes_supported
+
+    let default ~lang:_ = Enabled
+
+    let to_dyn = function
+      | Enabled -> Dyn.variant "Enabled" []
+      | Disabled -> Dyn.variant "Disabled" []
+      | Disabled_if_hidden_includes_supported ->
+        Dyn.variant "Disabled_if_hidden_includes_supported" []
+    ;;
+
+    let equal = Poly.equal
+
+    let encode = function
+      | Enabled -> Encoder.bool true
+      | Disabled -> Encoder.bool false
+      | Disabled_if_hidden_includes_supported ->
+        Encoder.string "false-if-hidden-includes-supported"
+    ;;
+
+    let decode =
+      let check ver = Syntax.since Stanza.syntax ver in
+      enum'
+        [ "true", check (1, 7) >>> return Enabled
+        ; "false", check (1, 7) >>> return Disabled
+        ; ( "false-if-hidden-includes-supported"
+          , check (3, 20) >>> return Disabled_if_hidden_includes_supported )
+        ]
+    ;;
+
+    let mode t ~ocaml_version ~dune_version : mode =
+      match t with
+      | Enabled -> Enabled
+      | Disabled ->
+        if Ocaml.Version.supports_hidden_includes ocaml_version && dune_version >= (3, 17)
+        then Disabled_with_hidden_includes
+        else Disabled
+      | Disabled_if_hidden_includes_supported ->
+        if Ocaml.Version.supports_hidden_includes ocaml_version
+        then Disabled_with_hidden_includes
+        else Enabled
+    ;;
+  end
+end
+
 type t =
   { name : Dune_project_name.t
   ; root : Path.Source.t
@@ -15,7 +77,7 @@ type t =
   ; project_file : Path.Source.t option
   ; extension_args : Univ_map.t
   ; parsing_context : Univ_map.t
-  ; implicit_transitive_deps : bool
+  ; implicit_transitive_deps : Implicit_transitive_deps.Stanza.t
   ; wrapped_executables : bool
   ; map_workspace_root : bool
   ; executables_implicit_empty_intf : bool
@@ -54,7 +116,14 @@ let version t = t.version
 let root t = t.root
 let stanza_parser t = Decoder.set key t t.stanza_parser
 let file t = t.project_file
-let implicit_transitive_deps t = t.implicit_transitive_deps
+
+let implicit_transitive_deps t ocaml_version =
+  Implicit_transitive_deps.Stanza.mode
+    t.implicit_transitive_deps
+    ~ocaml_version
+    ~dune_version:t.dune_version
+;;
+
 let generate_opam_files t = t.generate_opam_files
 let warnings t = t.warnings
 let set_generate_opam_files generate_opam_files t = { t with generate_opam_files }
@@ -106,7 +175,8 @@ let to_dyn
     ; ( "packages"
       , (list (pair Package.Name.to_dyn Package.to_dyn))
           (Package.Name.Map.to_list packages) )
-    ; "implicit_transitive_deps", bool implicit_transitive_deps
+    ; ( "implicit_transitive_deps"
+      , Implicit_transitive_deps.Stanza.to_dyn implicit_transitive_deps )
     ; "wrapped_executables", bool wrapped_executables
     ; "map_workspace_root", bool map_workspace_root
     ; "executables_implicit_empty_intf", bool executables_implicit_empty_intf
@@ -333,7 +403,6 @@ let interpret_lang_and_extensions ~(lang : Lang.Instance.t) ~explicit_extensions
 
 let filename = "dune-project"
 let opam_file_location_default ~lang:_ = `Relative_to_project
-let implicit_transitive_deps_default ~lang:_ = true
 let wrapped_executables_default ~(lang : Lang.Instance.t) = lang.version >= (2, 0)
 let map_workspace_root_default ~(lang : Lang.Instance.t) = lang.version >= (3, 0)
 
@@ -396,7 +465,7 @@ let infer ~dir info packages =
   let parsing_context, stanza_parser, extension_args =
     interpret_lang_and_extensions ~lang ~explicit_extensions:String.Map.empty
   in
-  let implicit_transitive_deps = implicit_transitive_deps_default ~lang in
+  let implicit_transitive_deps = Implicit_transitive_deps.Stanza.default ~lang in
   let wrapped_executables = wrapped_executables_default ~lang in
   let map_workspace_root = map_workspace_root_default ~lang in
   let executables_implicit_empty_intf = executables_implicit_empty_intf_default ~lang in
@@ -493,10 +562,17 @@ let encode : t -> Dune_sexp.t list =
     List.filter_opt
       [ flag "generate_opam_files" generate_opam_files (fun ~lang:_ ->
           not generate_opam_files)
-      ; flag
-          "implicit_transitive_deps"
-          implicit_transitive_deps
-          implicit_transitive_deps_default
+      ; (if
+           Implicit_transitive_deps.Stanza.equal
+             implicit_transitive_deps
+             (Implicit_transitive_deps.Stanza.default ~lang)
+         then None
+         else
+           Some
+             (constr
+                "implicit_transitive_deps"
+                Implicit_transitive_deps.Stanza.encode
+                implicit_transitive_deps))
       ; flag "wrapped_executables" wrapped_executables wrapped_executables_default
       ; flag "map_workspace_root" map_workspace_root map_workspace_root_default
       ; flag
@@ -762,7 +838,7 @@ let parse ~dir ~(lang : Lang.Instance.t) ~file =
              version of extensions before parsing them. *)
           Extension.instantiate ~dune_lang_ver:lang.version ~loc ~parse_args name ver)
      and+ implicit_transitive_deps =
-       field_o_b "implicit_transitive_deps" ~check:(Syntax.since Stanza.syntax (1, 7))
+       field_o "implicit_transitive_deps" Implicit_transitive_deps.Stanza.decode
      and+ wrapped_executables =
        field_o_b "wrapped_executables" ~check:(Syntax.since Stanza.syntax (1, 11))
      and+ map_workspace_root =
@@ -843,7 +919,7 @@ let parse ~dir ~(lang : Lang.Instance.t) ~file =
        let implicit_transitive_deps =
          Option.value
            implicit_transitive_deps
-           ~default:(implicit_transitive_deps_default ~lang)
+           ~default:(Implicit_transitive_deps.Stanza.default ~lang)
        in
        let wrapped_executables =
          Option.value wrapped_executables ~default:(wrapped_executables_default ~lang)
diff --git a/src/dune_lang/dune_project.mli b/src/dune_lang/dune_project.mli
index a9e30701bbc..6663f433f26 100644
--- a/src/dune_lang/dune_project.mli
+++ b/src/dune_lang/dune_project.mli
@@ -3,6 +3,15 @@ open Dune_config
 module Pin_stanza := Pin_stanza
 module Execution_parameters := Dune_engine.Execution_parameters
 
+module Implicit_transitive_deps : sig
+  type t =
+    | Enabled
+    | Disabled
+    | Disabled_with_hidden_includes
+
+  val to_bool : t -> bool
+end
+
 type t
 
 val to_dyn : t -> Dyn.t
@@ -95,7 +104,7 @@ val find_extension_args : t -> 'a Extension.t -> 'a option
 
 val is_extension_set : t -> 'a Extension.t -> bool
 val set_parsing_context : t -> 'a Decoder.t -> 'a Decoder.t
-val implicit_transitive_deps : t -> bool
+val implicit_transitive_deps : t -> Ocaml.Version.t -> Implicit_transitive_deps.t
 val dune_version : t -> Syntax.Version.t
 val wrapped_executables : t -> bool
 val map_workspace_root : t -> bool
diff --git a/src/dune_rules/compilation_context.ml b/src/dune_rules/compilation_context.ml
index 42013a618fd..a239ea5053b 100644
--- a/src/dune_rules/compilation_context.ml
+++ b/src/dune_rules/compilation_context.ml
@@ -152,12 +152,10 @@ let create
   let context = Super_context.context super_context in
   let* ocaml = Context.ocaml context in
   let direct_requires, hidden_requires =
-    if Dune_project.implicit_transitive_deps project
-    then Memo.Lazy.force requires_link, Resolve.Memo.return []
-    else if
-      Version.supports_hidden_includes ocaml.version
-      && Dune_project.dune_version project >= (3, 17)
-    then (
+    match Dune_project.implicit_transitive_deps project ocaml.version with
+    | Enabled -> Memo.Lazy.force requires_link, Resolve.Memo.return []
+    | Disabled -> requires_compile, Resolve.Memo.return []
+    | Disabled_with_hidden_includes ->
       let requires_hidden =
         let open Resolve.Memo.O in
         let+ requires_compile = requires_compile
@@ -166,8 +164,7 @@ let create
         List.iter ~f:(fun lib -> Table.set requires_table lib ()) requires_compile;
         List.filter requires_link ~f:(fun l -> not (Table.mem requires_table l))
       in
-      requires_compile, requires_hidden)
-    else requires_compile, Resolve.Memo.return []
+      requires_compile, requires_hidden
   in
   let sandbox = Sandbox_config.no_special_requirements in
   let modes =
diff --git a/src/dune_rules/merlin/merlin.ml b/src/dune_rules/merlin/merlin.ml
index 5f3608d94e4..a86d411a063 100644
--- a/src/dune_rules/merlin/merlin.ml
+++ b/src/dune_rules/merlin/merlin.ml
@@ -687,8 +687,12 @@ module Unprocessed = struct
              >>= function
              | Some lib ->
                let+ libs =
-                 let linking =
-                   Dune_project.implicit_transitive_deps (Scope.project scope)
+                 let* linking =
+                   let+ ocaml = Context.ocaml (Super_context.context sctx) in
+                   Dune_project.Implicit_transitive_deps.to_bool
+                     (Dune_project.implicit_transitive_deps
+                        (Scope.project scope)
+                        ocaml.version)
                  in
                  Lib.closure [ lib ] ~linking
                  |> Resolve.Memo.peek
diff --git a/test/blackbox-tests/test-cases/hidden-deps-supported.t/run.t b/test/blackbox-tests/test-cases/hidden-deps-supported.t/run.t
index ef2fcae83f0..3d49477562f 100644
--- a/test/blackbox-tests/test-cases/hidden-deps-supported.t/run.t
+++ b/test/blackbox-tests/test-cases/hidden-deps-supported.t/run.t
@@ -21,9 +21,13 @@ implicit_transitive_deps is set to false.
   -I .run.eobjs/byte
   -I .run.eobjs/native
 
+In the following two tests we use "false-if-hidden-includes-supported" for
+testing purposes, but since this test is guarded by OCaml version >= 5.2, this
+should be equivalent to "false".
+
   $ cat >dune-project <<EOF
-  > (lang dune 3.17)
-  > (implicit_transitive_deps false)
+  > (lang dune 3.20)
+  > (implicit_transitive_deps false-if-hidden-includes-supported)
   > EOF
 
   $ getincludes
@@ -40,8 +44,8 @@ implicit_transitive_deps is set to false.
 Test transitive deps can not be directly accessed, both for compiler versions supporting -H or not:
 
   $ cat >dune-project <<EOF
-  > (lang dune 3.17)
-  > (implicit_transitive_deps false)
+  > (lang dune 3.20)
+  > (implicit_transitive_deps false-if-hidden-includes-supported)
   > EOF
 
   $ dune build ./runf.exe 2>&1 | grep -v ocamlc
diff --git a/test/blackbox-tests/test-cases/hidden-deps-unsupported.t/run.t b/test/blackbox-tests/test-cases/hidden-deps-unsupported.t/run.t
index c51b4249eae..3ee93d7568a 100644
--- a/test/blackbox-tests/test-cases/hidden-deps-unsupported.t/run.t
+++ b/test/blackbox-tests/test-cases/hidden-deps-unsupported.t/run.t
@@ -24,7 +24,14 @@ the new -H feature added.
 
   $ cat >dune-project <<EOF
   > (lang dune 3.17)
-  > (implicit_transitive_deps false)
+  > (implicit_transitive_deps false-if-hidden-includes-supported)
+  > EOF
+
+  $ dune build
+
+  $ cat >dune-project <<EOF
+  > (lang dune 3.20)
+  > (implicit_transitive_deps false-if-hidden-includes-supported)
   > EOF
 
   $ getincludes