diff --git a/src/wp-includes/class-wp-block.php b/src/wp-includes/class-wp-block.php
index a1c52019c29a5..2533379fcdf7a 100644
--- a/src/wp-includes/class-wp-block.php
+++ b/src/wp-includes/class-wp-block.php
@@ -56,7 +56,7 @@ class WP_Block {
 	 * @var array
 	 * @access protected
 	 */
-	protected $available_context;
+	protected $available_context = array();
 
 	/**
 	 * Block type registry.
@@ -140,6 +140,28 @@ public function __construct( $block, $available_context = array(), $registry = n
 
 		$this->available_context = $available_context;
 
+		$this->refresh_context_dependents();
+	}
+
+	/**
+	 * Updates the context for the current block and its inner blocks.
+	 *
+	 * The method updates the context of inner blocks, if any, by passing down
+	 * any context values the block provides (`provides_context`).
+	 *
+	 * If the block has inner blocks, the method recursively processes them by creating new instances of `WP_Block`
+	 * for each inner block and updating their context based on the block's `provides_context` property.
+	 *
+	 * @since 6.8.0
+	 */
+	public function refresh_context_dependents() {
+		/*
+		 * Merging the `$context` property here is not ideal, but for now needs to happen because of backward compatibility.
+		 * Ideally, the `$context` property itself would not be filterable directly and only the `$available_context` would be filterable.
+		 * However, this needs to be separately explored whether it's possible without breakage.
+		 */
+		$this->available_context = array_merge( $this->available_context, $this->context );
+
 		if ( ! empty( $this->block_type->uses_context ) ) {
 			foreach ( $this->block_type->uses_context as $context_name ) {
 				if ( array_key_exists( $context_name, $this->available_context ) ) {
@@ -148,7 +170,23 @@ public function __construct( $block, $available_context = array(), $registry = n
 			}
 		}
 
-		if ( ! empty( $block['innerBlocks'] ) ) {
+		$this->refresh_parsed_block_dependents();
+	}
+
+	/**
+	 * Updates the parsed block content for the current block and its inner blocks.
+	 *
+	 * This method sets the `inner_html` and `inner_content` properties of the block based on the parsed
+	 * block content provided during initialization. It ensures that the block instance reflects the
+	 * most up-to-date content for both the inner HTML and any string fragments around inner blocks.
+	 *
+	 * If the block has inner blocks, this method initializes a new `WP_Block_List` for them, ensuring the
+	 * correct content and context are updated for each nested block.
+	 *
+	 * @since 6.8.0
+	 */
+	public function refresh_parsed_block_dependents() {
+		if ( ! empty( $this->parsed_block['innerBlocks'] ) ) {
 			$child_context = $this->available_context;
 
 			if ( ! empty( $this->block_type->provides_context ) ) {
@@ -159,15 +197,15 @@ public function __construct( $block, $available_context = array(), $registry = n
 				}
 			}
 
-			$this->inner_blocks = new WP_Block_List( $block['innerBlocks'], $child_context, $registry );
+			$this->inner_blocks = new WP_Block_List( $this->parsed_block['innerBlocks'], $child_context, $this->registry );
 		}
 
-		if ( ! empty( $block['innerHTML'] ) ) {
-			$this->inner_html = $block['innerHTML'];
+		if ( ! empty( $this->parsed_block['innerHTML'] ) ) {
+			$this->inner_html = $this->parsed_block['innerHTML'];
 		}
 
-		if ( ! empty( $block['innerContent'] ) ) {
-			$this->inner_content = $block['innerContent'];
+		if ( ! empty( $this->parsed_block['innerContent'] ) ) {
+			$this->inner_content = $this->parsed_block['innerContent'];
 		}
 	}
 
@@ -506,7 +544,8 @@ public function render( $options = array() ) {
 					if ( ! is_null( $pre_render ) ) {
 						$block_content .= $pre_render;
 					} else {
-						$source_block = $inner_block->parsed_block;
+						$source_block        = $inner_block->parsed_block;
+						$inner_block_context = $inner_block->context;
 
 						/** This filter is documented in wp-includes/blocks.php */
 						$inner_block->parsed_block = apply_filters( 'render_block_data', $inner_block->parsed_block, $source_block, $parent_block );
@@ -514,6 +553,16 @@ public function render( $options = array() ) {
 						/** This filter is documented in wp-includes/blocks.php */
 						$inner_block->context = apply_filters( 'render_block_context', $inner_block->context, $inner_block->parsed_block, $parent_block );
 
+						/*
+						 * The `refresh_context_dependents()` method already calls `refresh_parsed_block_dependents()`.
+						 * Therefore the second condition is irrelevant if the first one is satisfied.
+						 */
+						if ( $inner_block->context !== $inner_block_context ) {
+							$inner_block->refresh_context_dependents();
+						} elseif ( $inner_block->parsed_block !== $source_block ) {
+							$inner_block->refresh_parsed_block_dependents();
+						}
+
 						$block_content .= $inner_block->render();
 					}
 
diff --git a/tests/phpunit/tests/blocks/renderBlock.php b/tests/phpunit/tests/blocks/renderBlock.php
index 0c1c4ce10a1ee..be251692c5c62 100644
--- a/tests/phpunit/tests/blocks/renderBlock.php
+++ b/tests/phpunit/tests/blocks/renderBlock.php
@@ -192,4 +192,132 @@ public function test_default_context_is_filterable() {
 
 		$this->assertSame( array( 'example' => 'ok' ), $provided_context[0] );
 	}
+
+	/**
+	 * Tests the behavior of the 'render_block_context' filter based on the location of the filtered block.
+	 *
+	 * @ticket 62046
+	 */
+	public function test_render_block_context_inner_blocks() {
+		$provided_context = array();
+
+		register_block_type(
+			'tests/context-provider',
+			array(
+				'provides_context' => array( 'example' ),
+			)
+		);
+
+		register_block_type(
+			'tests/context-consumer',
+			array(
+				'uses_context'    => array( 'example' ),
+				'render_callback' => static function ( $attributes, $content, $block ) use ( &$provided_context ) {
+					$provided_context = $block->context;
+
+					return '';
+				},
+			)
+		);
+
+		// Filter the context provided by the test block.
+		add_filter(
+			'render_block_context',
+			function ( $context, $parsed_block ) {
+				if ( isset( $parsed_block['blockName'] ) && 'tests/context-provider' === $parsed_block['blockName'] ) {
+					$context['example'] = 'ok';
+				}
+
+				return $context;
+			},
+			10,
+			2
+		);
+
+		// Test inner block context when the provider block is a top-level block.
+		do_blocks(
+			<<<HTML
+<!-- wp:tests/context-provider -->
+<!-- wp:tests/context-consumer /-->
+<!-- /wp:tests/context-provider -->
+HTML
+		);
+		$this->assertArrayHasKey( 'example', $provided_context, 'Test block is top-level block: Context should include "example"' );
+		$this->assertSame( 'ok', $provided_context['example'], 'Test block is top-level block: "example" in context should be "ok"' );
+
+		// Test inner block context when the provider block is an inner block.
+		do_blocks(
+			<<<HTML
+<!-- wp:group {"layout":{"type":"constrained"}} -->
+<!-- wp:tests/context-provider -->
+<!-- wp:tests/context-consumer /-->
+<!-- /wp:tests/context-provider -->
+<!-- /wp:group -->
+HTML
+		);
+		$this->assertArrayHasKey( 'example', $provided_context, 'Test block is inner block: Block context should include "example"' );
+		$this->assertSame( 'ok', $provided_context['example'], 'Test block is inner block: "example" in context should be "ok"' );
+	}
+
+	/**
+	 * Tests that the 'render_block_context' filter arbitrary context.
+	 *
+	 * @ticket 62046
+	 */
+	public function test_render_block_context_allowed_context() {
+		$provided_context = array();
+
+		register_block_type(
+			'tests/context-consumer',
+			array(
+				'uses_context'    => array( 'example' ),
+				'render_callback' => static function ( $attributes, $content, $block ) use ( &$provided_context ) {
+					$provided_context = $block->context;
+
+					return '';
+				},
+			)
+		);
+
+		// Filter the context provided to the test block.
+		add_filter(
+			'render_block_context',
+			function ( $context, $parsed_block ) {
+				if ( isset( $parsed_block['blockName'] ) && 'tests/context-consumer' === $parsed_block['blockName'] ) {
+					$context['arbitrary'] = 'ok';
+				}
+
+				return $context;
+			},
+			10,
+			2
+		);
+
+		do_blocks(
+			<<<HTML
+<!-- wp:tests/context-consumer /-->
+HTML
+		);
+		$this->assertArrayNotHasKey( 'arbitrary', $provided_context, 'Test block is top-level block: Block context should not include "arbitrary"' );
+
+		do_blocks(
+			<<<HTML
+<!-- wp:group {"layout":{"type":"constrained"}} -->
+<!-- wp:tests/context-consumer /-->
+<!-- /wp:group -->
+HTML
+		);
+
+		/*
+		 * These assertions assert something that ideally should not be the case: Inner blocks should respect the
+		 * `uses_context` value just like top-level blocks do. However, due to logic in `WP_Block::render()`, the
+		 * `context` property value itself is filterable when it should rather only apply to the `available_context`
+		 * property.
+		 * However, changing this behavior now would be a backward compatibility break, hence the assertion here.
+		 * Potentially it can be reconsidered in the future, so that these two assertions could be replaced with an
+		 * `assertArrayNotHasKey( 'arbitrary', $provided_context )`.
+		 */
+		$this->assertArrayHasKey( 'arbitrary', $provided_context, 'Test block is inner block: Block context should include "arbitrary"' );
+		$this->assertSame( 'ok', $provided_context['arbitrary'], 'Test block is inner block: "arbitrary" in context should be "ok"' );
+	}
 }