diff --git a/mysql-test/suite/rpl/r/rpl_parallel_sbm.result b/mysql-test/suite/rpl/r/rpl_parallel_sbm.result
index f3cc8454510..7990a663f04 100644
--- a/mysql-test/suite/rpl/r/rpl_parallel_sbm.result
+++ b/mysql-test/suite/rpl/r/rpl_parallel_sbm.result
@@ -15,9 +15,6 @@ create table t2 (a int);
 include/sync_slave_sql_with_master.inc
 #
 # Pt 1) Ensure SBM is updated immediately upon arrival of the next event
-# Lock t1 on slave so the first received transaction does not complete/commit
-connection slave;
-LOCK TABLES t1 WRITE;
 connection master;
 # Sleep 2 to allow a buffer between events for SBM check
 insert into t1 values (0);
@@ -26,8 +23,16 @@ connection slave;
 # Waiting for transaction to arrive on slave and begin SQL Delay..
 # Validating SBM is updated on event arrival..
 # ..done
+# MDEV-32265. At time of STOP SLAVE, if the SQL Thread is currently
+# delaying a transaction; then when the reciprocal START SLAVE occurs,
+# if the event is still to be delayed, SBM should resume accordingly
+include/stop_slave.inc
+include/start_slave.inc
 connection slave;
-UNLOCK TABLES;
+# Waiting for replica to resume the delay for the transaction
+# Sleeping 1s to increment SBM
+# Ensuring Seconds_Behind_Master increases after sleeping..
+# ..done
 include/sync_with_master_gtid.inc
 #
 # Pt 2) If the worker threads have not entered an idle state, ensure
diff --git a/mysql-test/suite/rpl/t/rpl_parallel_sbm.test b/mysql-test/suite/rpl/t/rpl_parallel_sbm.test
index e738f55e7ec..58c0db15e47 100644
--- a/mysql-test/suite/rpl/t/rpl_parallel_sbm.test
+++ b/mysql-test/suite/rpl/t/rpl_parallel_sbm.test
@@ -36,10 +36,6 @@ create table t2 (a int);
 --echo #
 --echo # Pt 1) Ensure SBM is updated immediately upon arrival of the next event
 
---echo # Lock t1 on slave so the first received transaction does not complete/commit
---connection slave
-LOCK TABLES t1 WRITE;
-
 --connection master
 --echo # Sleep 2 to allow a buffer between events for SBM check
 sleep 2;
@@ -65,8 +61,31 @@ if (`SELECT $sbm_trx1_arrive > ($seconds_since_idling + 1)`)
 }
 --echo # ..done
 
+
+--echo # MDEV-32265. At time of STOP SLAVE, if the SQL Thread is currently
+--echo # delaying a transaction; then when the reciprocal START SLAVE occurs,
+--echo # if the event is still to be delayed, SBM should resume accordingly
+
+--source include/stop_slave.inc
+--source include/start_slave.inc
+
 --connection slave
-UNLOCK TABLES;
+--echo # Waiting for replica to resume the delay for the transaction
+--let $wait_condition= SELECT count(*) FROM information_schema.processlist WHERE state LIKE 'Waiting until MASTER_DELAY seconds after master executed event';
+--source include/wait_condition.inc
+
+--echo # Sleeping 1s to increment SBM
+sleep 1;
+
+--echo # Ensuring Seconds_Behind_Master increases after sleeping..
+--let $sbm_trx1_after_1s_sleep= query_get_value(SHOW SLAVE STATUS, Seconds_Behind_Master, 1)
+if (`SELECT $sbm_trx1_after_1s_sleep <= $sbm_trx1_arrive`)
+{
+    --echo # ..failed
+    --die Seconds_Behind_Master did not increase after sleeping, but should have
+}
+--echo # ..done
+
 --source include/sync_with_master_gtid.inc
 
 --echo #
diff --git a/sql/slave.cc b/sql/slave.cc
index 44fcb93a3a9..3b9b5d6a83b 100644
--- a/sql/slave.cc
+++ b/sql/slave.cc
@@ -4249,8 +4249,8 @@ static int exec_relay_log_event(THD* thd, Relay_log_info* rli,
         if (rli->last_master_timestamp < ev->when)
         {
           rli->last_master_timestamp= ev->when;
-          rli->sql_thread_caught_up= false;
         }
+        rli->sql_thread_caught_up= false;
       }
 
       int res= rli->parallel.do_event(serial_rgi, ev, event_size);