diff --git a/subsys/bluetooth/mesh/proxy_srv.c b/subsys/bluetooth/mesh/proxy_srv.c
index 7d16a42a86e3..7894ef8d6089 100644
--- a/subsys/bluetooth/mesh/proxy_srv.c
+++ b/subsys/bluetooth/mesh/proxy_srv.c
@@ -897,10 +897,13 @@ static void subnet_evt(struct bt_mesh_subnet *sub, enum bt_mesh_key_evt evt)
 		if (sub == beacon_sub) {
 			beacon_sub = NULL;
 		}
+
+		bt_mesh_proxy_identity_stop(sub);
 	} else {
 		bt_mesh_proxy_beacon_send(sub);
-		bt_mesh_adv_gatt_update();
 	}
+
+	bt_mesh_adv_gatt_update();
 }
 
 BT_MESH_SUBNET_CB_DEFINE(gatt_services) = {
diff --git a/tests/bluetooth/tester/src/btp/btp_mesh.h b/tests/bluetooth/tester/src/btp/btp_mesh.h
index 17f49e4927ed..6a8e54f9f141 100644
--- a/tests/bluetooth/tester/src/btp/btp_mesh.h
+++ b/tests/bluetooth/tester/src/btp/btp_mesh.h
@@ -1060,6 +1060,9 @@ struct btp_priv_node_id_set_cmd {
 } __packed;
 
 #define BTP_MESH_PROXY_PRIVATE_IDENTITY		0x72
+struct btp_proxy_priv_identity_cmd {
+	uint8_t enabled;
+} __packed;
 
 #define BTP_MESH_OD_PRIV_PROXY_GET		0x73
 struct btp_od_priv_proxy_get_cmd {
diff --git a/tests/bluetooth/tester/src/btp_mesh.c b/tests/bluetooth/tester/src/btp_mesh.c
index acc97d5dda7c..1633fae0c349 100644
--- a/tests/bluetooth/tester/src/btp_mesh.c
+++ b/tests/bluetooth/tester/src/btp_mesh.c
@@ -899,20 +899,40 @@ static uint8_t priv_node_id_set(const void *cmd, uint16_t cmd_len,
 
 	return BTP_STATUS_SUCCESS;
 }
+#endif
 
+#ifdef CONFIG_BT_MESH_PRIV_BEACON_SRV
 static uint8_t proxy_private_identity_enable(const void *cmd, uint16_t cmd_len,
 					     void *rsp, uint16_t *rsp_len)
 {
+	const struct btp_proxy_priv_identity_cmd *cp = cmd;
+	uint16_t net_idx[CONFIG_BT_MESH_SUBNET_COUNT];
+	enum bt_mesh_feat_state priv_node_id = BT_MESH_FEATURE_DISABLED;
+	ssize_t count;
 	int err;
 
 	LOG_DBG("");
 
-	err = bt_mesh_proxy_private_identity_enable();
-	if (err) {
-		LOG_ERR("Failed to enable proxy private identity (err %d)", err);
+	count = bt_mesh_subnets_get(net_idx, ARRAY_SIZE(net_idx), 0);
+
+	if (count <= 0) {
+		LOG_ERR("No subnet (err:%i)", count);
 		return BTP_STATUS_FAILED;
 	}
 
+	if (cp->enabled) {
+		priv_node_id = BT_MESH_FEATURE_ENABLED;
+	}
+
+	for (int i = 0; i < count; i++) {
+		err = bt_mesh_subnet_priv_node_id_set(net_idx[i], priv_node_id);
+		if (err) {
+			LOG_ERR("Failed to %s proxy private identity for net idx:%x (err %d)",
+				cp->enabled ? "enable" : "disable", net_idx[i], err);
+			return BTP_STATUS_FAILED;
+		}
+	}
+
 	return BTP_STATUS_SUCCESS;
 }
 #endif
@@ -5251,8 +5271,10 @@ static const struct btp_handler handlers[] = {
 	{.opcode = BTP_MESH_PRIV_NODE_ID_SET,
 	 .expect_len = sizeof(struct btp_priv_node_id_set_cmd),
 	 .func = priv_node_id_set},
+#endif
+#ifdef CONFIG_BT_MESH_PRIV_BEACON_SRV
 	{.opcode = BTP_MESH_PROXY_PRIVATE_IDENTITY,
-	 .expect_len = 0,
+	 .expect_len = sizeof(struct btp_proxy_priv_identity_cmd),
 	 .func = proxy_private_identity_enable},
 #endif
 #if defined(CONFIG_BT_MESH_OD_PRIV_PROXY_CLI)