diff --git a/pkg/engine/patcher.go b/pkg/engine/patcher.go
index 7688e42..8cb6f32 100644
--- a/pkg/engine/patcher.go
+++ b/pkg/engine/patcher.go
@@ -184,6 +184,27 @@ func (p *Patcher) ReconcileAsset(ctx context.Context, assetMeta *assets.AssetMet
 		return false, nil
 	}
 
+	// Step 1.6: Clear stale thrashing state when the user removes the pause annotation.
+	// If in-memory state already reached the threshold (meaning the operator previously
+	// set the pause annotation) but the annotation is now absent, the user intentionally
+	// resumed reconciliation. Reset the counter so the next cycle starts from zero:
+	// the token bucket may still be empty and cause throttles, but those start from 0
+	// and will not immediately re-trigger a pause.
+	if liveExists {
+		earlyKey := throttling.MakeResourceKey(
+			desired.GetNamespace(),
+			desired.GetName(),
+			desired.GetKind(),
+		)
+		if p.thrashingDetector.GetAttempts(earlyKey) >= throttling.ThrashingThreshold {
+			logger.Info("Pause annotation removed by user, resetting thrashing state",
+				"name", assetMeta.Name,
+				"key", earlyKey,
+			)
+			p.thrashingDetector.Reset(earlyKey)
+		}
+	}
+
 	// Step 2: Check opt-out annotation (mode: unmanaged)
 	if liveExists && overrides.IsUnmanaged(live) {
 		logger.V(1).Info("Asset is unmanaged, skipping",
diff --git a/pkg/engine/patcher_test.go b/pkg/engine/patcher_test.go
index 6950e41..c5ac476 100644
--- a/pkg/engine/patcher_test.go
+++ b/pkg/engine/patcher_test.go
@@ -28,6 +28,7 @@ import (
 	"k8s.io/apimachinery/pkg/apis/meta/v1/unstructured"
 	"k8s.io/apimachinery/pkg/runtime"
 	"k8s.io/apimachinery/pkg/runtime/schema"
+	"sigs.k8s.io/controller-runtime/pkg/client"
 	"sigs.k8s.io/controller-runtime/pkg/client/fake"
 
 	pkgassets "github.com/kubevirt/virt-platform-autopilot/pkg/assets"
@@ -282,6 +283,102 @@ func TestThrashingEventEmittedOnlyOnce(t *testing.T) {
 	}
 }
 
+// TestThrashingStateResetOnPauseAnnotationRemoval reproduces the race where a user removes
+// the reconcile-paused annotation before the token bucket has refilled (< 6 s after pause).
+// Without the fix the in-memory consecutiveThrottles stays >= ThrashingThreshold, so the very
+// next throttled reconciliation immediately re-pauses the resource.
+// With the fix the thrashing state is cleared as soon as the pause annotation is absent,
+// so subsequent throttles start from 0 and do not trigger a re-pause.
+func TestThrashingStateResetOnPauseAnnotationRemoval(t *testing.T) {
+	loader := pkgassets.NewLoader()
+	renderer := NewRenderer(loader)
+
+	assetMeta := &pkgassets.AssetMetadata{
+		Name:      "psi-enable",
+		Path:      "active/machine-config/04-psi-enable.yaml",
+		Component: "MachineConfig",
+	}
+
+	hco := pkgcontext.NewMockHCO("kubevirt-hyperconverged", "kubevirt-hyperconverged")
+	renderCtx := pkgcontext.NewRenderContext(hco)
+
+	desired, err := renderer.RenderAsset(assetMeta, renderCtx)
+	if err != nil {
+		t.Fatalf("failed to render asset: %v", err)
+	}
+
+	// Bucket: capacity 1, very long window so no natural refill during the test.
+	// Call 1 → token consumed; calls 2+ → throttled.
+	// After ThrashingThreshold throttles the operator sets the pause annotation.
+	smallBucket := throttling.NewTokenBucketWithSettings(1, time.Hour)
+	td := throttling.NewThrashingDetector()
+
+	live := desired.DeepCopy()
+	fakeClient := fake.NewClientBuilder().WithObjects(live).Build()
+
+	p := &Patcher{
+		renderer:          renderer,
+		applier:           NewApplier(fakeClient, nil),
+		driftDetector:     &alwaysDriftChecker{},
+		throttle:          smallBucket,
+		thrashingDetector: td,
+		client:            fakeClient,
+	}
+
+	// Drive the patcher until it sets the pause annotation.
+	// Call 1 consumes the token; calls 2, 3, 4 are throttled and hit the threshold.
+	for i := 0; i < throttling.ThrashingThreshold+1; i++ {
+		//nolint:errcheck // we only care about side-effects here
+		p.ReconcileAsset(context.Background(), assetMeta, renderCtx)
+	}
+
+	// Verify the pause annotation was set on the live object.
+	paused := &unstructured.Unstructured{}
+	paused.SetGroupVersionKind(live.GroupVersionKind())
+	if err := fakeClient.Get(context.Background(), client.ObjectKey{
+		Namespace: live.GetNamespace(),
+		Name:      live.GetName(),
+	}, paused); err != nil {
+		t.Fatalf("failed to fetch live object: %v", err)
+	}
+	annotations := paused.GetAnnotations()
+	if annotations == nil || annotations["platform.kubevirt.io/reconcile-paused"] != "true" {
+		t.Fatal("expected pause annotation to be set after edit-war threshold; was not set")
+	}
+
+	// Simulate user removing the pause annotation (bucket still empty — the race window).
+	delete(annotations, "platform.kubevirt.io/reconcile-paused")
+	paused.SetAnnotations(annotations)
+	if err := fakeClient.Update(context.Background(), paused); err != nil {
+		t.Fatalf("failed to remove pause annotation: %v", err)
+	}
+
+	// One more reconciliation while the bucket is still empty.
+	// Before the fix: consecutiveThrottles was still >= threshold → immediate re-pause.
+	// After the fix:  thrashing state is cleared → throttle count resets to 1 → no re-pause.
+	_, reconcileErr := p.ReconcileAsset(context.Background(), assetMeta, renderCtx)
+
+	// The call must return a throttle error (not a pause error) and must NOT re-set the annotation.
+	if reconcileErr == nil {
+		t.Fatal("expected a throttle error (bucket still empty) but got nil")
+	}
+	if strings.Contains(reconcileErr.Error(), "edit war") {
+		t.Errorf("got pause-re-trigger error %q; want a plain throttle error — thrashing state was not reset", reconcileErr)
+	}
+
+	afterRemoval := &unstructured.Unstructured{}
+	afterRemoval.SetGroupVersionKind(live.GroupVersionKind())
+	if err := fakeClient.Get(context.Background(), client.ObjectKey{
+		Namespace: live.GetNamespace(),
+		Name:      live.GetName(),
+	}, afterRemoval); err != nil {
+		t.Fatalf("failed to fetch live object after annotation removal: %v", err)
+	}
+	if ann := afterRemoval.GetAnnotations(); ann != nil && ann["platform.kubevirt.io/reconcile-paused"] == "true" {
+		t.Error("resource was immediately re-paused after user removed the annotation; thrashing state was not cleared")
+	}
+}
+
 func TestCountJSONPatchOperations(t *testing.T) {
 	tests := []struct {
 		name     string