diff --git a/src/components/views/spaces/threads-activity-centre/useUnreadThreadRooms.ts b/src/components/views/spaces/threads-activity-centre/useUnreadThreadRooms.ts
index c9c40b6cb6..addaeb97b8 100644
--- a/src/components/views/spaces/threads-activity-centre/useUnreadThreadRooms.ts
+++ b/src/components/views/spaces/threads-activity-centre/useUnreadThreadRooms.ts
@@ -16,8 +16,9 @@
  * /
  */
 
-import { useEffect, useState } from "react";
-import { ClientEvent, MatrixClient, Room } from "matrix-js-sdk/src/matrix";
+import { useCallback, useEffect, useState } from "react";
+import { ClientEvent, MatrixClient, MatrixEventEvent, Room } from "matrix-js-sdk/src/matrix";
+import { throttle } from "lodash";
 
 import { doesRoomHaveUnreadThreads } from "../../../../Unread";
 import { NotificationLevel } from "../../../../stores/notifications/NotificationLevel";
@@ -27,6 +28,8 @@ import { useMatrixClientContext } from "../../../../contexts/MatrixClientContext
 import { useEventEmitter } from "../../../../hooks/useEventEmitter";
 import { VisibilityProvider } from "../../../../stores/room-list/filters/VisibilityProvider";
 
+const MIN_UPDATE_INTERVAL_MS = 500;
+
 type Result = {
     greatestNotificationLevel: NotificationLevel;
     rooms: Array<{ room: Room; notificationLevel: NotificationLevel }>;
@@ -44,17 +47,33 @@ export function useUnreadThreadRooms(forceComputation: boolean): Result {
 
     const [result, setResult] = useState<Result>({ greatestNotificationLevel: NotificationLevel.None, rooms: [] });
 
-    // Listen to sync events to update the result
-    useEventEmitter(mxClient, ClientEvent.Sync, () => {
+    const doUpdate = useCallback(() => {
         setResult(computeUnreadThreadRooms(mxClient, msc3946ProcessDynamicPredecessor));
-    });
+    }, [mxClient, msc3946ProcessDynamicPredecessor]);
+
+    // The exhautive deps lint rule can't compute dependencies here since it's not a plain inline func.
+    // We make this as simple as possible so its only dep is doUpdate itself.
+    // eslint-disable-next-line react-hooks/exhaustive-deps
+    const scheduleUpdate = useCallback(
+        throttle(doUpdate, MIN_UPDATE_INTERVAL_MS, {
+            leading: false,
+            trailing: true,
+        }),
+        [doUpdate],
+    );
+
+    // Listen to sync events to update the result
+    useEventEmitter(mxClient, ClientEvent.Sync, scheduleUpdate);
+    // and also when events get decrypted, since this will often happen after the sync
+    // event and may change notifications.
+    useEventEmitter(mxClient, MatrixEventEvent.Decrypted, scheduleUpdate);
 
     // Force the list computation
     useEffect(() => {
         if (forceComputation) {
-            setResult(computeUnreadThreadRooms(mxClient, msc3946ProcessDynamicPredecessor));
+            doUpdate();
         }
-    }, [mxClient, msc3946ProcessDynamicPredecessor, forceComputation]);
+    }, [doUpdate, forceComputation]);
 
     return result;
 }
diff --git a/test/components/views/spaces/useUnreadThreadRooms-test.tsx b/test/components/views/spaces/useUnreadThreadRooms-test.tsx
new file mode 100644
index 0000000000..f840d54d5d
--- /dev/null
+++ b/test/components/views/spaces/useUnreadThreadRooms-test.tsx
@@ -0,0 +1,122 @@
+/*
+ * Copyright 2024 The Matrix.org Foundation C.I.C.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+import React from "react";
+import { renderHook } from "@testing-library/react-hooks";
+import {
+    MatrixClient,
+    MatrixEventEvent,
+    NotificationCountType,
+    PendingEventOrdering,
+    Room,
+} from "matrix-js-sdk/src/matrix";
+import { act } from "@testing-library/react";
+
+import MatrixClientContext from "../../../../src/contexts/MatrixClientContext";
+import { stubClient } from "../../../test-utils";
+import { populateThread } from "../../../test-utils/threads";
+import { NotificationLevel } from "../../../../src/stores/notifications/NotificationLevel";
+import { useUnreadThreadRooms } from "../../../../src/components/views/spaces/threads-activity-centre/useUnreadThreadRooms";
+
+describe("useUnreadThreadRooms", () => {
+    let client: MatrixClient;
+    let room: Room;
+
+    beforeEach(() => {
+        client = stubClient();
+        client.supportsThreads = () => true;
+        room = new Room("!room1:example.org", client, "@fee:bar", {
+            pendingEventOrdering: PendingEventOrdering.Detached,
+        });
+    });
+
+    it("has no notifications with no rooms", async () => {
+        const { result } = renderHook(() => useUnreadThreadRooms(false));
+        const { greatestNotificationLevel, rooms } = result.current;
+
+        expect(greatestNotificationLevel).toBe(NotificationLevel.None);
+        expect(rooms.length).toEqual(0);
+    });
+
+    it("a notification and a highlight summarise to a highlight", async () => {
+        const notifThreadInfo = await populateThread({
+            room: room,
+            client: client,
+            authorId: "@foo:bar",
+            participantUserIds: ["@fee:bar"],
+        });
+        room.setThreadUnreadNotificationCount(notifThreadInfo.thread.id, NotificationCountType.Total, 1);
+
+        const highlightThreadInfo = await populateThread({
+            room: room,
+            client: client,
+            authorId: "@foo:bar",
+            participantUserIds: ["@fee:bar"],
+        });
+        room.setThreadUnreadNotificationCount(highlightThreadInfo.thread.id, NotificationCountType.Highlight, 1);
+
+        client.getVisibleRooms = jest.fn().mockReturnValue([room]);
+
+        const wrapper = ({ children }: { children: React.ReactNode }) => (
+            <MatrixClientContext.Provider value={client}>{children}</MatrixClientContext.Provider>
+        );
+
+        const { result } = renderHook(() => useUnreadThreadRooms(true), { wrapper });
+        const { greatestNotificationLevel, rooms } = result.current;
+
+        expect(greatestNotificationLevel).toBe(NotificationLevel.Highlight);
+        expect(rooms.length).toEqual(1);
+    });
+
+    describe("updates", () => {
+        beforeEach(() => {
+            jest.useFakeTimers();
+        });
+
+        afterEach(() => {
+            jest.useRealTimers();
+        });
+
+        it("updates on decryption within 1s", async () => {
+            const notifThreadInfo = await populateThread({
+                room: room,
+                client: client,
+                authorId: "@foo:bar",
+                participantUserIds: ["@fee:bar"],
+            });
+            room.setThreadUnreadNotificationCount(notifThreadInfo.thread.id, NotificationCountType.Total, 0);
+
+            client.getVisibleRooms = jest.fn().mockReturnValue([room]);
+
+            const wrapper = ({ children }: { children: React.ReactNode }) => (
+                <MatrixClientContext.Provider value={client}>{children}</MatrixClientContext.Provider>
+            );
+
+            const { result } = renderHook(() => useUnreadThreadRooms(true), { wrapper });
+
+            expect(result.current.greatestNotificationLevel).toBe(NotificationLevel.Activity);
+
+            act(() => {
+                room.setThreadUnreadNotificationCount(notifThreadInfo.thread.id, NotificationCountType.Highlight, 1);
+                client.emit(MatrixEventEvent.Decrypted, notifThreadInfo.thread.events[0]);
+
+                jest.advanceTimersByTime(1000);
+            });
+
+            expect(result.current.greatestNotificationLevel).toBe(NotificationLevel.Highlight);
+        });
+    });
+});