diff --git a/conformance/utils/suite/suite.go b/conformance/utils/suite/suite.go
index 5df2c722d9..a17131ccde 100644
--- a/conformance/utils/suite/suite.go
+++ b/conformance/utils/suite/suite.go
@@ -206,7 +206,7 @@ func NewConformanceTestSuite(options ConformanceOptions) (*ConformanceTestSuite,
 	supportedFeatures := options.SupportedFeatures.Difference(options.ExemptFeatures)
 	source := supportedFeaturesSourceManual
 	if options.EnableAllSupportedFeatures {
-		supportedFeatures = features.SetsToNamesSet(features.AllFeatures)
+		supportedFeatures = features.SetsToNamesSet(features.AllFeatures).Difference(options.ExemptFeatures)
 	} else if shouldInferSupportedFeatures(&options) {
 		var err error
 		if options.GatewayClassName != "" {
diff --git a/conformance/utils/suite/suite_test.go b/conformance/utils/suite/suite_test.go
index 0b692b56c7..8988332794 100644
--- a/conformance/utils/suite/suite_test.go
+++ b/conformance/utils/suite/suite_test.go
@@ -487,6 +487,13 @@ func TestInferGWCSupportedFeatures(t *testing.T) {
 				}),
 			},
 		},
+		{
+			name:             "all features combined with exampt features",
+			allowAllFeatures: true,
+			exemptFeatures:   sets.New[features.FeatureName]("ReferenceGrant", "HTTPRoute"),
+			expectedSource:   supportedFeaturesSourceManual,
+			expectedFeatures: features.SetsToNamesSet(features.AllFeatures).Difference(sets.New[features.FeatureName]("ReferenceGrant", "HTTPRoute")),
+		},
 	}
 
 	gwcName := "ochopintre"