diff --git a/tests/dataset/test_parameter_with_setpoints_has_control.py b/tests/dataset/test_parameter_with_setpoints_has_control.py
new file mode 100644
index 00000000000..9892f39ce5b
--- /dev/null
+++ b/tests/dataset/test_parameter_with_setpoints_has_control.py
@@ -0,0 +1,39 @@
+from typing import TYPE_CHECKING
+
+import numpy as np
+
+from qcodes.dataset import Measurement
+from qcodes.parameters import ManualParameter, ParameterWithSetpoints
+from qcodes.validators import Arrays
+
+if TYPE_CHECKING:
+    from qcodes.dataset.experiment_container import Experiment
+
+
+def test_parameter_with_setpoints_has_control(experiment: "Experiment"):
+    class MySp(ParameterWithSetpoints):
+        def unpack_self(self, value):
+            res = super().unpack_self(value)
+            res.append((p1, p1()))
+            return res
+
+    mp = ManualParameter("mp", vals=Arrays(shape=(10,)), initial_value=np.arange(10))
+    p1 = ParameterWithSetpoints(
+        "p1", vals=Arrays(shape=(10,)), setpoints=(mp,), set_cmd=None
+    )
+    p2 = MySp("p2", vals=Arrays(shape=(10,)), setpoints=(mp,), set_cmd=None)
+    p2.has_control_of.add(p1)
+
+    p1(np.linspace(-1, 1, 10))
+    p2(np.random.randn(10))
+
+    meas = Measurement()
+    meas.register_parameter(p2)
+    with meas.run() as ds:
+        ds.add_result((p2, p2()))
+
+    xds = ds.dataset.to_xarray_dataset()  # does not unravel to grid
+
+    assert (
+        list(xds.sizes.keys()) == ["mp"]
+    )  # without p1 this correctly has mp as the only dim, with p1 this is turned into a generic 'index' dim