diff --git a/source/blender/blenkernel/BKE_lib_override.h b/source/blender/blenkernel/BKE_lib_override.h
index fb49f60d8b5..786d0b5ba97 100644
--- a/source/blender/blenkernel/BKE_lib_override.h
+++ b/source/blender/blenkernel/BKE_lib_override.h
@@ -56,7 +56,9 @@ bool BKE_lib_override_library_is_enabled(void);
 
 struct IDOverrideLibrary *BKE_lib_override_library_init(struct ID *local_id,
                                                         struct ID *reference_id);
-void BKE_lib_override_library_copy(struct ID *dst_id, const struct ID *src_id);
+void BKE_lib_override_library_copy(struct ID *dst_id,
+                                   const struct ID *src_id,
+                                   const bool do_full_copy);
 void BKE_lib_override_library_clear(struct IDOverrideLibrary *override, const bool do_id_user);
 void BKE_lib_override_library_free(struct IDOverrideLibrary **override, const bool do_id_user);
 
diff --git a/source/blender/blenkernel/intern/anim_data.c b/source/blender/blenkernel/intern/anim_data.c
index 9ab4e5c028d..cbb34cbee30 100644
--- a/source/blender/blenkernel/intern/anim_data.c
+++ b/source/blender/blenkernel/intern/anim_data.c
@@ -381,14 +381,15 @@ bool BKE_animdata_copy_id(Main *bmain, ID *id_to, ID *id_from, const int flag)
 
 void BKE_animdata_copy_id_action(Main *bmain, ID *id, const bool set_newid)
 {
+  const bool is_id_liboverride = ID_IS_OVERRIDE_LIBRARY(id);
   AnimData *adt = BKE_animdata_from_id(id);
   if (adt) {
-    if (adt->action) {
+    if (adt->action && (!is_id_liboverride || !ID_IS_LINKED(adt->action))) {
       id_us_min((ID *)adt->action);
       adt->action = set_newid ? ID_NEW_SET(adt->action, BKE_action_copy(bmain, adt->action)) :
                                 BKE_action_copy(bmain, adt->action);
     }
-    if (adt->tmpact) {
+    if (adt->tmpact && (!is_id_liboverride || !ID_IS_LINKED(adt->tmpact))) {
       id_us_min((ID *)adt->tmpact);
       adt->tmpact = set_newid ? ID_NEW_SET(adt->tmpact, BKE_action_copy(bmain, adt->tmpact)) :
                                 BKE_action_copy(bmain, adt->tmpact);
diff --git a/source/blender/blenkernel/intern/collection.c b/source/blender/blenkernel/intern/collection.c
index e8e3e61ced4..1388146eeb7 100644
--- a/source/blender/blenkernel/intern/collection.c
+++ b/source/blender/blenkernel/intern/collection.c
@@ -314,6 +314,7 @@ static Collection *collection_duplicate_recursive(Main *bmain,
   Collection *collection_new;
   bool do_full_process = false;
   const int object_dupflag = (do_obdata) ? U.dupflag : 0;
+  const bool is_collection_liboverride = ID_IS_OVERRIDE_LIBRARY(collection_old);
 
   if (!do_hierarchy || collection_old->id.newid == NULL) {
     BKE_id_copy(bmain, &collection_old->id, (ID **)&collection_new);
@@ -359,6 +360,12 @@ static Collection *collection_duplicate_recursive(Main *bmain,
       Object *ob_old = cob->ob;
       Object *ob_new = (Object *)ob_old->id.newid;
 
+      /* If collection is an override, we do not want to duplicate any linked data-block, as that
+       * would generate a purely local data. */
+      if (is_collection_liboverride && ID_IS_LINKED(ob_old)) {
+        continue;
+      }
+
       if (ob_new == NULL) {
         ob_new = BKE_object_duplicate(bmain, ob_old, object_dupflag);
         ID_NEW_SET(ob_old, ob_new);
@@ -430,7 +437,7 @@ Collection *BKE_collection_duplicate(Main *bmain,
   Collection *collection_new = collection_duplicate_recursive(
       bmain, parent, collection, do_hierarchy, do_objects, do_obdata);
 
-  /* This code will follows into all ID links using an ID tagged with LIB_TAG_NEW.*/
+  /* This code will follow into all ID links using an ID tagged with LIB_TAG_NEW.*/
   BKE_libblock_relink_to_newid(&collection_new->id);
 
   if (do_hierarchy) {
diff --git a/source/blender/blenkernel/intern/lib_id.c b/source/blender/blenkernel/intern/lib_id.c
index 734fe9ad9ae..3ad429c5f5a 100644
--- a/source/blender/blenkernel/intern/lib_id.c
+++ b/source/blender/blenkernel/intern/lib_id.c
@@ -64,6 +64,7 @@
 #include "BKE_idtype.h"
 #include "BKE_key.h"
 #include "BKE_lib_id.h"
+#include "BKE_lib_override.h"
 #include "BKE_lib_query.h"
 #include "BKE_lib_remap.h"
 #include "BKE_main.h"
@@ -1153,14 +1154,13 @@ void BKE_libblock_copy_ex(Main *bmain, const ID *id, ID **r_newid, const int ori
     new_id->properties = IDP_CopyProperty_ex(id->properties, copy_data_flag);
   }
 
-  /* XXX Again... We need a way to control what we copy in a much more refined way.
-   * We cannot always copy this, some internal copying will die on it! */
-  /* For now, upper level code will have to do that itself when required. */
-#if 0
-  if (id->override != NULL) {
-    BKE_override_copy(new_id, id);
+  /* We may need our own flag to control that at some point, but for now 'no main' one should be
+   * good enough. */
+  if ((orig_flag & LIB_ID_CREATE_NO_MAIN) == 0 && id->override_library != NULL) {
+    /* We do not want to copy existing override rules here, as they would break the proper
+     * remapping between IDs. Proper overrides rules will be re-generated anyway. */
+    BKE_lib_override_library_copy(new_id, id, false);
   }
-#endif
 
   if (id_can_have_animdata(new_id)) {
     IdAdtTemplate *iat = (IdAdtTemplate *)new_id;
diff --git a/source/blender/blenkernel/intern/lib_override.c b/source/blender/blenkernel/intern/lib_override.c
index 8d1a4e3594c..d16428ccd60 100644
--- a/source/blender/blenkernel/intern/lib_override.c
+++ b/source/blender/blenkernel/intern/lib_override.c
@@ -92,7 +92,7 @@ IDOverrideLibrary *BKE_lib_override_library_init(ID *local_id, ID *reference_id)
 
   if (ancestor_id != NULL && ancestor_id->override_library != NULL) {
     /* Original ID has a template, use it! */
-    BKE_lib_override_library_copy(local_id, ancestor_id);
+    BKE_lib_override_library_copy(local_id, ancestor_id, true);
     if (local_id->override_library->reference != reference_id) {
       id_us_min(local_id->override_library->reference);
       local_id->override_library->reference = reference_id;
@@ -110,8 +110,8 @@ IDOverrideLibrary *BKE_lib_override_library_init(ID *local_id, ID *reference_id)
   return local_id->override_library;
 }
 
-/** Deep copy of a whole override from \a src_id to \a dst_id. */
-void BKE_lib_override_library_copy(ID *dst_id, const ID *src_id)
+/** Shalow or deep copy of a whole override from \a src_id to \a dst_id. */
+void BKE_lib_override_library_copy(ID *dst_id, const ID *src_id, const bool do_full_copy)
 {
   BLI_assert(src_id->override_library != NULL);
 
@@ -138,12 +138,15 @@ void BKE_lib_override_library_copy(ID *dst_id, const ID *src_id)
                                             (ID *)src_id;
   id_us_plus(dst_id->override_library->reference);
 
-  BLI_duplicatelist(&dst_id->override_library->properties, &src_id->override_library->properties);
-  for (IDOverrideLibraryProperty *op_dst = dst_id->override_library->properties.first,
-                                 *op_src = src_id->override_library->properties.first;
-       op_dst;
-       op_dst = op_dst->next, op_src = op_src->next) {
-    lib_override_library_property_copy(op_dst, op_src);
+  if (do_full_copy) {
+    BLI_duplicatelist(&dst_id->override_library->properties,
+                      &src_id->override_library->properties);
+    for (IDOverrideLibraryProperty *op_dst = dst_id->override_library->properties.first,
+                                   *op_src = src_id->override_library->properties.first;
+         op_dst;
+         op_dst = op_dst->next, op_src = op_src->next) {
+      lib_override_library_property_copy(op_dst, op_src);
+    }
   }
 
   dst_id->tag &= ~LIB_TAG_OVERRIDE_LIBRARY_REFOK;
diff --git a/source/blender/blenkernel/intern/object.c b/source/blender/blenkernel/intern/object.c
index 4505f9e8d57..127c5243c7e 100644
--- a/source/blender/blenkernel/intern/object.c
+++ b/source/blender/blenkernel/intern/object.c
@@ -1763,6 +1763,8 @@ Object *BKE_object_duplicate(Main *bmain, const Object *ob, const int dupflag)
   Material ***matarar;
   ID *id;
   int a, didit;
+  const bool is_object_liboverride = ID_IS_OVERRIDE_LIBRARY(ob);
+
   Object *obn = BKE_object_copy(bmain, ob);
 
   /* 0 == full linked. */
@@ -1790,6 +1792,9 @@ Object *BKE_object_duplicate(Main *bmain, const Object *ob, const int dupflag)
     for (a = 0; a < obn->totcol; a++) {
       id = (ID *)obn->mat[a];
       if (id) {
+        if (is_object_liboverride && ID_IS_LINKED(id)) {
+          continue;
+        }
         ID_NEW_REMAP_US(obn->mat[a])
         else
         {
@@ -1807,6 +1812,9 @@ Object *BKE_object_duplicate(Main *bmain, const Object *ob, const int dupflag)
     for (psys = obn->particlesystem.first; psys; psys = psys->next) {
       id = (ID *)psys->part;
       if (id) {
+        if (is_object_liboverride && ID_IS_LINKED(id)) {
+          continue;
+        }
         ID_NEW_REMAP_US(psys->part)
         else
         {
@@ -1823,179 +1831,181 @@ Object *BKE_object_duplicate(Main *bmain, const Object *ob, const int dupflag)
   id = obn->data;
   didit = 0;
 
-  switch (obn->type) {
-    case OB_MESH:
-      if (dupflag & USER_DUP_MESH) {
-        ID_NEW_REMAP_US2(obn->data)
-        else
-        {
-          obn->data = ID_NEW_SET(obn->data, BKE_mesh_copy(bmain, obn->data));
-          didit = 1;
-        }
-        id_us_min(id);
-      }
-      break;
-    case OB_CURVE:
-      if (dupflag & USER_DUP_CURVE) {
-        ID_NEW_REMAP_US2(obn->data)
-        else
-        {
-          obn->data = ID_NEW_SET(obn->data, BKE_curve_copy(bmain, obn->data));
-          didit = 1;
-        }
-        id_us_min(id);
-      }
-      break;
-    case OB_SURF:
-      if (dupflag & USER_DUP_SURF) {
-        ID_NEW_REMAP_US2(obn->data)
-        else
-        {
-          obn->data = ID_NEW_SET(obn->data, BKE_curve_copy(bmain, obn->data));
-          didit = 1;
-        }
-        id_us_min(id);
-      }
-      break;
-    case OB_FONT:
-      if (dupflag & USER_DUP_FONT) {
-        ID_NEW_REMAP_US2(obn->data)
-        else
-        {
-          obn->data = ID_NEW_SET(obn->data, BKE_curve_copy(bmain, obn->data));
-          didit = 1;
-        }
-        id_us_min(id);
-      }
-      break;
-    case OB_MBALL:
-      if (dupflag & USER_DUP_MBALL) {
-        ID_NEW_REMAP_US2(obn->data)
-        else
-        {
-          obn->data = ID_NEW_SET(obn->data, BKE_mball_copy(bmain, obn->data));
-          didit = 1;
-        }
-        id_us_min(id);
-      }
-      break;
-    case OB_LAMP:
-      if (dupflag & USER_DUP_LAMP) {
-        ID_NEW_REMAP_US2(obn->data)
-        else
-        {
-          obn->data = ID_NEW_SET(obn->data, BKE_light_copy(bmain, obn->data));
-          didit = 1;
-        }
-        id_us_min(id);
-      }
-      break;
-    case OB_ARMATURE:
-      if (dupflag != 0) {
-        DEG_id_tag_update(&obn->id, ID_RECALC_GEOMETRY);
-        if (obn->pose) {
-          BKE_pose_tag_recalc(bmain, obn->pose);
-        }
-        if (dupflag & USER_DUP_ARM) {
+  if (!is_object_liboverride || !ID_IS_LINKED(id)) {
+    switch (obn->type) {
+      case OB_MESH:
+        if (dupflag & USER_DUP_MESH) {
           ID_NEW_REMAP_US2(obn->data)
           else
           {
-            obn->data = ID_NEW_SET(obn->data, BKE_armature_copy(bmain, obn->data));
-            BKE_pose_rebuild(bmain, obn, obn->data, true);
+            obn->data = ID_NEW_SET(obn->data, BKE_mesh_copy(bmain, obn->data));
             didit = 1;
           }
           id_us_min(id);
         }
-      }
-      break;
-    case OB_LATTICE:
-      if (dupflag != 0) {
-        ID_NEW_REMAP_US2(obn->data)
-        else
-        {
-          obn->data = ID_NEW_SET(obn->data, BKE_lattice_copy(bmain, obn->data));
-          didit = 1;
+        break;
+      case OB_CURVE:
+        if (dupflag & USER_DUP_CURVE) {
+          ID_NEW_REMAP_US2(obn->data)
+          else
+          {
+            obn->data = ID_NEW_SET(obn->data, BKE_curve_copy(bmain, obn->data));
+            didit = 1;
+          }
+          id_us_min(id);
         }
-        id_us_min(id);
-      }
-      break;
-    case OB_CAMERA:
-      if (dupflag != 0) {
-        ID_NEW_REMAP_US2(obn->data)
-        else
-        {
-          obn->data = ID_NEW_SET(obn->data, BKE_camera_copy(bmain, obn->data));
-          didit = 1;
+        break;
+      case OB_SURF:
+        if (dupflag & USER_DUP_SURF) {
+          ID_NEW_REMAP_US2(obn->data)
+          else
+          {
+            obn->data = ID_NEW_SET(obn->data, BKE_curve_copy(bmain, obn->data));
+            didit = 1;
+          }
+          id_us_min(id);
         }
-        id_us_min(id);
-      }
-      break;
-    case OB_LIGHTPROBE:
-      if (dupflag & USER_DUP_LIGHTPROBE) {
-        ID_NEW_REMAP_US2(obn->data)
-        else
-        {
-          obn->data = ID_NEW_SET(obn->data, BKE_lightprobe_copy(bmain, obn->data));
-          didit = 1;
+        break;
+      case OB_FONT:
+        if (dupflag & USER_DUP_FONT) {
+          ID_NEW_REMAP_US2(obn->data)
+          else
+          {
+            obn->data = ID_NEW_SET(obn->data, BKE_curve_copy(bmain, obn->data));
+            didit = 1;
+          }
+          id_us_min(id);
         }
-        id_us_min(id);
-      }
-      break;
-    case OB_SPEAKER:
-      if (dupflag != 0) {
-        ID_NEW_REMAP_US2(obn->data)
-        else
-        {
-          obn->data = ID_NEW_SET(obn->data, BKE_speaker_copy(bmain, obn->data));
-          didit = 1;
+        break;
+      case OB_MBALL:
+        if (dupflag & USER_DUP_MBALL) {
+          ID_NEW_REMAP_US2(obn->data)
+          else
+          {
+            obn->data = ID_NEW_SET(obn->data, BKE_mball_copy(bmain, obn->data));
+            didit = 1;
+          }
+          id_us_min(id);
         }
-        id_us_min(id);
-      }
-      break;
-    case OB_GPENCIL:
-      if (dupflag & USER_DUP_GPENCIL) {
-        ID_NEW_REMAP_US2(obn->data)
-        else
-        {
-          obn->data = ID_NEW_SET(obn->data, BKE_gpencil_copy(bmain, obn->data));
-          didit = 1;
+        break;
+      case OB_LAMP:
+        if (dupflag & USER_DUP_LAMP) {
+          ID_NEW_REMAP_US2(obn->data)
+          else
+          {
+            obn->data = ID_NEW_SET(obn->data, BKE_light_copy(bmain, obn->data));
+            didit = 1;
+          }
+          id_us_min(id);
         }
-        id_us_min(id);
-      }
-      break;
-    case OB_HAIR:
-      if (dupflag & USER_DUP_HAIR) {
-        ID_NEW_REMAP_US2(obn->data)
-        else
-        {
-          obn->data = ID_NEW_SET(obn->data, BKE_hair_copy(bmain, obn->data));
-          didit = 1;
+        break;
+      case OB_ARMATURE:
+        if (dupflag != 0) {
+          DEG_id_tag_update(&obn->id, ID_RECALC_GEOMETRY);
+          if (obn->pose) {
+            BKE_pose_tag_recalc(bmain, obn->pose);
+          }
+          if (dupflag & USER_DUP_ARM) {
+            ID_NEW_REMAP_US2(obn->data)
+            else
+            {
+              obn->data = ID_NEW_SET(obn->data, BKE_armature_copy(bmain, obn->data));
+              BKE_pose_rebuild(bmain, obn, obn->data, true);
+              didit = 1;
+            }
+            id_us_min(id);
+          }
         }
-        id_us_min(id);
-      }
-      break;
-    case OB_POINTCLOUD:
-      if (dupflag & USER_DUP_POINTCLOUD) {
-        ID_NEW_REMAP_US2(obn->data)
-        else
-        {
-          obn->data = ID_NEW_SET(obn->data, BKE_pointcloud_copy(bmain, obn->data));
-          didit = 1;
+        break;
+      case OB_LATTICE:
+        if (dupflag != 0) {
+          ID_NEW_REMAP_US2(obn->data)
+          else
+          {
+            obn->data = ID_NEW_SET(obn->data, BKE_lattice_copy(bmain, obn->data));
+            didit = 1;
+          }
+          id_us_min(id);
         }
-        id_us_min(id);
-      }
-      break;
-    case OB_VOLUME:
-      if (dupflag & USER_DUP_VOLUME) {
-        ID_NEW_REMAP_US2(obn->data)
-        else
-        {
-          obn->data = ID_NEW_SET(obn->data, BKE_volume_copy(bmain, obn->data));
-          didit = 1;
+        break;
+      case OB_CAMERA:
+        if (dupflag != 0) {
+          ID_NEW_REMAP_US2(obn->data)
+          else
+          {
+            obn->data = ID_NEW_SET(obn->data, BKE_camera_copy(bmain, obn->data));
+            didit = 1;
+          }
+          id_us_min(id);
         }
-        id_us_min(id);
-      }
-      break;
+        break;
+      case OB_LIGHTPROBE:
+        if (dupflag & USER_DUP_LIGHTPROBE) {
+          ID_NEW_REMAP_US2(obn->data)
+          else
+          {
+            obn->data = ID_NEW_SET(obn->data, BKE_lightprobe_copy(bmain, obn->data));
+            didit = 1;
+          }
+          id_us_min(id);
+        }
+        break;
+      case OB_SPEAKER:
+        if (dupflag != 0) {
+          ID_NEW_REMAP_US2(obn->data)
+          else
+          {
+            obn->data = ID_NEW_SET(obn->data, BKE_speaker_copy(bmain, obn->data));
+            didit = 1;
+          }
+          id_us_min(id);
+        }
+        break;
+      case OB_GPENCIL:
+        if (dupflag & USER_DUP_GPENCIL) {
+          ID_NEW_REMAP_US2(obn->data)
+          else
+          {
+            obn->data = ID_NEW_SET(obn->data, BKE_gpencil_copy(bmain, obn->data));
+            didit = 1;
+          }
+          id_us_min(id);
+        }
+        break;
+      case OB_HAIR:
+        if (dupflag & USER_DUP_HAIR) {
+          ID_NEW_REMAP_US2(obn->data)
+          else
+          {
+            obn->data = ID_NEW_SET(obn->data, BKE_hair_copy(bmain, obn->data));
+            didit = 1;
+          }
+          id_us_min(id);
+        }
+        break;
+      case OB_POINTCLOUD:
+        if (dupflag & USER_DUP_POINTCLOUD) {
+          ID_NEW_REMAP_US2(obn->data)
+          else
+          {
+            obn->data = ID_NEW_SET(obn->data, BKE_pointcloud_copy(bmain, obn->data));
+            didit = 1;
+          }
+          id_us_min(id);
+        }
+        break;
+      case OB_VOLUME:
+        if (dupflag & USER_DUP_VOLUME) {
+          ID_NEW_REMAP_US2(obn->data)
+          else
+          {
+            obn->data = ID_NEW_SET(obn->data, BKE_volume_copy(bmain, obn->data));
+            didit = 1;
+          }
+          id_us_min(id);
+        }
+        break;
+    }
   }
 
   /* Check if obdata is copied. */
@@ -2020,6 +2030,9 @@ Object *BKE_object_duplicate(Main *bmain, const Object *ob, const int dupflag)
         for (a = 0; a < obn->totcol; a++) {
           id = (ID *)(*matarar)[a];
           if (id) {
+            if (is_object_liboverride && ID_IS_LINKED(id)) {
+              continue;
+            }
             ID_NEW_REMAP_US((*matarar)[a])
             else
             {