diff --git a/src/e2ee/matrixKeyProvider.ts b/src/e2ee/matrixKeyProvider.ts
index 1d1c4588..a499f45c 100644
--- a/src/e2ee/matrixKeyProvider.ts
+++ b/src/e2ee/matrixKeyProvider.ts
@@ -12,11 +12,12 @@ import {
   MatrixRTCSessionEvent,
 } from "matrix-js-sdk/lib/matrixrtc";
 import { type CallMembershipIdentityParts } from "matrix-js-sdk/lib/matrixrtc/EncryptionManager";
+import { firstValueFrom } from "rxjs";
 
 import {
-  computeLivekitParticipantIdentity,
+  computeLivekitParticipantIdentity$,
   livekitIdentityInput,
-} from "../state/CallViewModel/remoteMembers/MatrixLivekitMembers";
+} from "../state/CallViewModel/remoteMembers/LivekitParticipantIdentity";
 
 export class MatrixKeyProvider extends BaseKeyProvider {
   private rtcSession?: MatrixRTCSession;
@@ -69,7 +70,7 @@ export class MatrixKeyProvider extends BaseKeyProvider {
         "deriveBits",
         "deriveKey",
       ]),
-      computeLivekitParticipantIdentity(membership, kind),
+      firstValueFrom(computeLivekitParticipantIdentity$(membership, kind)),
     ]).then(
       ([keyMaterial, livekitParticipantId]) => {
         this.onSetEncryptionKey(
diff --git a/src/room/InCallView.tsx b/src/room/InCallView.tsx
index a767388a..89a151ae 100644
--- a/src/room/InCallView.tsx
+++ b/src/room/InCallView.tsx
@@ -88,6 +88,7 @@ import { ReactionsOverlay } from "./ReactionsOverlay";
 import { CallEventAudioRenderer } from "./CallEventAudioRenderer";
 import {
   debugTileLayout as debugTileLayoutSetting,
+  matrixRTCMode as matrixRTCModeSetting,
   useSetting,
 } from "../settings/settings";
 import { ReactionsReader } from "../reactions/ReactionsReader";
@@ -144,6 +145,7 @@ export const ActiveCall: FC<ActiveCallProps> = (props) => {
         encryptionSystem: props.e2eeSystem,
         autoLeaveWhenOthersLeft,
         waitForCallPickup: waitForCallPickup && sendNotificationType === "ring",
+        matrixRTCMode$: matrixRTCModeSetting.value$,
       },
       reactionsReader.raisedHands$,
       reactionsReader.reactions$,
diff --git a/src/state/CallViewModel/CallViewModel.test.ts b/src/state/CallViewModel/CallViewModel.test.ts
index 58814bbe..505cb19f 100644
--- a/src/state/CallViewModel/CallViewModel.test.ts
+++ b/src/state/CallViewModel/CallViewModel.test.ts
@@ -61,7 +61,8 @@ import {
 import { MediaDevices } from "../MediaDevices.ts";
 import { getValue } from "../../utils/observable.ts";
 import { type Behavior, constant } from "../Behavior.ts";
-import { withCallViewModel } from "./CallViewModelTestUtils.ts";
+import { withCallViewModel as withCallViewModelInMode } from "./CallViewModelTestUtils.ts";
+import { MatrixRTCMode } from "../../settings/settings.ts";
 
 vi.mock("rxjs", async (importOriginal) => ({
   ...(await importOriginal()),
@@ -241,7 +242,13 @@ function mockRingEvent(
 // need a value to fill in for them when emitting notifications
 const mockLegacyRingEvent = {} as { event_id: string } & ICallNotifyContent;
 
-describe("CallViewModel", () => {
+describe.each([
+  [MatrixRTCMode.Legacy],
+  [MatrixRTCMode.Compatibil],
+  [MatrixRTCMode.Matrix_2_0],
+])("CallViewModel (%s mode)", (mode) => {
+  const withCallViewModel = withCallViewModelInMode(mode);
+
   test("participants are retained during a focus switch", () => {
     withTestScheduler(({ behavior, expectObservable }) => {
       // Participants disappear on frame 2 and come back on frame 3
diff --git a/src/state/CallViewModel/CallViewModel.ts b/src/state/CallViewModel/CallViewModel.ts
index bab77eaf..e1869cf6 100644
--- a/src/state/CallViewModel/CallViewModel.ts
+++ b/src/state/CallViewModel/CallViewModel.ts
@@ -53,11 +53,15 @@ import {
   ScreenShareViewModel,
   type UserMediaViewModel,
 } from "../MediaViewModel";
-import { accumulate, generateItems, pauseWhen } from "../../utils/observable";
+import {
+  accumulate,
+  filterBehavior,
+  generateItems,
+  pauseWhen,
+} from "../../utils/observable";
 import {
   duplicateTiles,
   MatrixRTCMode,
-  matrixRTCMode,
   playReactionsSound,
   showReactions,
 } from "../../settings/settings";
@@ -111,7 +115,8 @@ import { ECConnectionFactory } from "./remoteMembers/ConnectionFactory.ts";
 import { createConnectionManager$ } from "./remoteMembers/ConnectionManager.ts";
 import {
   createMatrixLivekitMembers$,
-  type MatrixLivekitMember,
+  type TaggedParticipant,
+  type LocalMatrixLivekitMember,
 } from "./remoteMembers/MatrixLivekitMembers.ts";
 import {
   type AutoLeaveReason,
@@ -150,6 +155,8 @@ export interface CallViewModelOptions {
   connectionState$?: Behavior<ConnectionState>;
   /** Optional behavior overriding the computed window size, mainly for testing purposes. */
   windowSize$?: Behavior<{ width: number; height: number }>;
+  /** The version & compatibility mode of MatrixRTC that we should use. */
+  matrixRTCMode$: Behavior<MatrixRTCMode>;
 }
 
 // Do not play any sounds if the participant count has exceeded this
@@ -406,7 +413,7 @@ export function createCallViewModel$(
     client,
     roomId: matrixRoom.roomId,
     useOldestMember$: scope.behavior(
-      matrixRTCMode.value$.pipe(map((v) => v === MatrixRTCMode.Legacy)),
+      options.matrixRTCMode$.pipe(map((v) => v === MatrixRTCMode.Legacy)),
     ),
   });
 
@@ -458,7 +465,7 @@ export function createCallViewModel$(
   });
 
   const connectOptions$ = scope.behavior(
-    matrixRTCMode.value$.pipe(
+    options.matrixRTCMode$.pipe(
       map((mode) => ({
         encryptMedia: livekitKeyProvider !== undefined,
         // TODO. This might need to get called again on each change of matrixRTCMode...
@@ -512,22 +519,21 @@ export function createCallViewModel$(
     ),
   );
 
-  const localMatrixLivekitMemberUninitialized = {
-    membership$: localRtcMembership$,
-    participant$: localMembership.participant$,
-    connection$: localMembership.connection$,
-    userId: userId,
-  };
-
-  const localMatrixLivekitMember$: Behavior<MatrixLivekitMember | null> =
+  const localMatrixLivekitMember$: Behavior<LocalMatrixLivekitMember | null> =
     scope.behavior(
       localRtcMembership$.pipe(
-        switchMap((membership) => {
-          if (!membership) return of(null);
-          return of(
-            // casting is save here since we know that localRtcMembership$ is !== null since we reached this case.
-            localMatrixLivekitMemberUninitialized as MatrixLivekitMember,
-          );
+        filterBehavior((membership) => membership !== null),
+        map((membership$) => {
+          if (membership$ === null) return null;
+          return {
+            membership$,
+            participant: {
+              type: "local" as const,
+              value$: localMembership.participant$,
+            },
+            connection$: localMembership.connection$,
+            userId,
+          };
         }),
       ),
     );
@@ -595,7 +601,7 @@ export function createCallViewModel$(
       switchMap((members) => {
         const a$ = combineLatest(
           members.value.map((member) =>
-            combineLatest([member.connection$, member.participant$]).pipe(
+            combineLatest([member.connection$, member.participant.value$]).pipe(
               map(([connection, participant]) => {
                 // do not render audio for local participant
                 if (!connection || !participant || participant.isLocal)
@@ -673,7 +679,7 @@ export function createCallViewModel$(
           let localUserMediaId: string | undefined = undefined;
           // add local member if available
           if (localMatrixLivekitMember) {
-            const { userId, participant$, connection$, membership$ } =
+            const { userId, participant, connection$, membership$ } =
               localMatrixLivekitMember;
             localUserMediaId = `${userId}:${membership$.value.deviceId}`; // should be membership$.value.membershipID which is not optional
 
@@ -684,7 +690,7 @@ export function createCallViewModel$(
                     dup,
                     localUserMediaId,
                     userId,
-                    participant$,
+                    participant satisfies TaggedParticipant as TaggedParticipant, // Widen the type safely
                     connection$,
                   ],
                   data: undefined,
@@ -695,7 +701,7 @@ export function createCallViewModel$(
           // add remote members that are available
           for (const {
             userId,
-            participant$,
+            participant,
             connection$,
             membership$,
           } of matrixLivekitMembers.value) {
@@ -704,7 +710,7 @@ export function createCallViewModel$(
             // const participantId = membership$.value?.identity;
             for (let dup = 0; dup < 1 + duplicateTiles; dup++) {
               yield {
-                keys: [dup, userMediaId, userId, participant$, connection$],
+                keys: [dup, userMediaId, userId, participant, connection$],
                 data: undefined,
               };
             }
@@ -716,7 +722,7 @@ export function createCallViewModel$(
           dup,
           participantId,
           userId,
-          participant$,
+          participant,
           connection$,
         ) => {
           const livekitRoom$ = scope.behavior(
@@ -735,7 +741,7 @@ export function createCallViewModel$(
             scope,
             `${participantId}:${dup}`,
             userId,
-            participant$,
+            participant,
             options.encryptionSystem,
             livekitRoom$,
             focusUrl$,
@@ -945,11 +951,12 @@ export function createCallViewModel$(
     ),
   );
 
-  const hasRemoteScreenShares$: Observable<boolean> = spotlight$.pipe(
-    map((spotlight) =>
-      spotlight.some((vm) => !vm.local && vm instanceof ScreenShareViewModel),
+  const hasRemoteScreenShares$ = scope.behavior<boolean>(
+    spotlight$.pipe(
+      map((spotlight) =>
+        spotlight.some((vm) => !vm.local && vm instanceof ScreenShareViewModel),
+      ),
     ),
-    distinctUntilChanged(),
   );
 
   const pipEnabled$ = scope.behavior(setPipEnabled$, false);
diff --git a/src/state/CallViewModel/CallViewModelTestUtils.ts b/src/state/CallViewModel/CallViewModelTestUtils.ts
index f80b4bcb..b6f53275 100644
--- a/src/state/CallViewModel/CallViewModelTestUtils.ts
+++ b/src/state/CallViewModel/CallViewModelTestUtils.ts
@@ -53,6 +53,7 @@ import {
 import { type Behavior, constant } from "../Behavior";
 import { type ProcessorState } from "../../livekit/TrackProcessorContext";
 import { type MediaDevices } from "../MediaDevices";
+import { type MatrixRTCMode } from "../../settings/settings";
 
 mockConfig({
   livekit: { livekit_service_url: "http://my-default-service-url.com" },
@@ -80,117 +81,125 @@ export interface CallViewModelInputs {
 
 const localParticipant = mockLocalParticipant({ identity: "" });
 
-export function withCallViewModel(
-  {
-    remoteParticipants$ = constant([]),
-    rtcMembers$ = constant([localRtcMember]),
-    livekitConnectionState$: connectionState$ = constant(
-      ConnectionState.Connected,
-    ),
-    speaking = new Map(),
-    mediaDevices = mockMediaDevices({}),
-    initialSyncState = SyncState.Syncing,
-    windowSize$ = constant({ width: 1000, height: 800 }),
-  }: Partial<CallViewModelInputs> = {},
-  continuation: (
-    vm: CallViewModel,
-    rtcSession: MockRTCSession,
-    subjects: { raisedHands$: BehaviorSubject<Record<string, RaisedHandInfo>> },
-    setSyncState: (value: SyncState) => void,
-  ) => void,
-  options: CallViewModelOptions = {
-    encryptionSystem: { kind: E2eeType.PER_PARTICIPANT },
-    autoLeaveWhenOthersLeft: false,
-  },
-): void {
-  let syncState = initialSyncState;
-  const setSyncState = (value: SyncState): void => {
-    const prev = syncState;
-    syncState = value;
-    room.client.emit(ClientEvent.Sync, value, prev);
-  };
-  const room = mockMatrixRoom({
-    client: new (class extends EventEmitter {
-      public getUserId(): string | undefined {
-        return localRtcMember.userId;
-      }
+export function withCallViewModel(mode: MatrixRTCMode) {
+  return (
+    {
+      remoteParticipants$ = constant([]),
+      rtcMembers$ = constant([localRtcMember]),
+      livekitConnectionState$: connectionState$ = constant(
+        ConnectionState.Connected,
+      ),
+      speaking = new Map(),
+      mediaDevices = mockMediaDevices({}),
+      initialSyncState = SyncState.Syncing,
+      windowSize$ = constant({ width: 1000, height: 800 }),
+    }: Partial<CallViewModelInputs> = {},
+    continuation: (
+      vm: CallViewModel,
+      rtcSession: MockRTCSession,
+      subjects: {
+        raisedHands$: BehaviorSubject<Record<string, RaisedHandInfo>>;
+      },
+      setSyncState: (value: SyncState) => void,
+    ) => void,
+    options: Partial<CallViewModelOptions> = {},
+  ): void => {
+    let syncState = initialSyncState;
+    const setSyncState = (value: SyncState): void => {
+      const prev = syncState;
+      syncState = value;
+      room.client.emit(ClientEvent.Sync, value, prev);
+    };
+    const room = mockMatrixRoom({
+      client: new (class extends EventEmitter {
+        public getUserId(): string | undefined {
+          return localRtcMember.userId;
+        }
 
-      public getDeviceId(): string {
-        return localRtcMember.deviceId;
-      }
+        public getDeviceId(): string {
+          return localRtcMember.deviceId;
+        }
 
-      public getDomain(): string {
-        return "example.com";
-      }
+        public getDomain(): string {
+          return "example.com";
+        }
 
-      public getSyncState(): SyncState {
-        return syncState;
-      }
-    })() as Partial<MatrixClient> as MatrixClient,
-    getMembers: () => Array.from(roomMembers.values()),
-    getMembersWithMembership: () => Array.from(roomMembers.values()),
-  });
-  const rtcSession = new MockRTCSession(room, []).withMemberships(rtcMembers$);
-  const participantsSpy = vi
-    .spyOn(ComponentsCore, "connectedParticipantsObserver")
-    .mockReturnValue(remoteParticipants$);
-  const mediaSpy = vi
-    .spyOn(ComponentsCore, "observeParticipantMedia")
-    .mockImplementation((p) =>
-      of({ participant: p } as Partial<
-        ComponentsCore.ParticipantMedia<LocalParticipant>
-      > as ComponentsCore.ParticipantMedia<LocalParticipant>),
+        public getSyncState(): SyncState {
+          return syncState;
+        }
+      })() as Partial<MatrixClient> as MatrixClient,
+      getMembers: () => Array.from(roomMembers.values()),
+      getMembersWithMembership: () => Array.from(roomMembers.values()),
+    });
+    const rtcSession = new MockRTCSession(room, []).withMemberships(
+      rtcMembers$,
     );
-  const eventsSpy = vi
-    .spyOn(ComponentsCore, "observeParticipantEvents")
-    .mockImplementation((p, ...eventTypes) => {
-      if (eventTypes.includes(ParticipantEvent.IsSpeakingChanged)) {
-        return (speaking.get(p) ?? of(false)).pipe(
-          map((s): Participant => ({ ...p, isSpeaking: s }) as Participant),
-        );
-      } else {
-        return of(p);
-      }
+    const participantsSpy = vi
+      .spyOn(ComponentsCore, "connectedParticipantsObserver")
+      .mockReturnValue(remoteParticipants$);
+    const mediaSpy = vi
+      .spyOn(ComponentsCore, "observeParticipantMedia")
+      .mockImplementation((p) =>
+        of({ participant: p } as Partial<
+          ComponentsCore.ParticipantMedia<LocalParticipant>
+        > as ComponentsCore.ParticipantMedia<LocalParticipant>),
+      );
+    const eventsSpy = vi
+      .spyOn(ComponentsCore, "observeParticipantEvents")
+      .mockImplementation((p, ...eventTypes) => {
+        if (eventTypes.includes(ParticipantEvent.IsSpeakingChanged)) {
+          return (speaking.get(p) ?? of(false)).pipe(
+            map((s): Participant => ({ ...p, isSpeaking: s }) as Participant),
+          );
+        } else {
+          return of(p);
+        }
+      });
+
+    const roomEventSelectorSpy = vi
+      .spyOn(ComponentsCore, "roomEventSelector")
+      .mockImplementation((_room, _eventType) => of());
+    const muteStates = mockMuteStates();
+    const raisedHands$ = new BehaviorSubject<Record<string, RaisedHandInfo>>(
+      {},
+    );
+    const reactions$ = new BehaviorSubject<Record<string, ReactionInfo>>({});
+
+    const vm = createCallViewModel$(
+      testScope(),
+      rtcSession.asMockedSession(),
+      room,
+      mediaDevices,
+      muteStates,
+      {
+        encryptionSystem: { kind: E2eeType.PER_PARTICIPANT },
+        autoLeaveWhenOthersLeft: false,
+        livekitRoomFactory: (): LivekitRoom =>
+          mockLivekitRoom({
+            localParticipant,
+            disconnect: async () => Promise.resolve(),
+            setE2EEEnabled: async () => Promise.resolve(),
+          }),
+        connectionState$,
+        windowSize$,
+        matrixRTCMode$: constant(mode),
+        ...options,
+      },
+      raisedHands$,
+      reactions$,
+      new BehaviorSubject<ProcessorState>({
+        processor: undefined,
+        supported: undefined,
+      }),
+    );
+
+    onTestFinished(() => {
+      participantsSpy.mockRestore();
+      mediaSpy.mockRestore();
+      eventsSpy.mockRestore();
+      roomEventSelectorSpy.mockRestore();
     });
 
-  const roomEventSelectorSpy = vi
-    .spyOn(ComponentsCore, "roomEventSelector")
-    .mockImplementation((_room, _eventType) => of());
-  const muteStates = mockMuteStates();
-  const raisedHands$ = new BehaviorSubject<Record<string, RaisedHandInfo>>({});
-  const reactions$ = new BehaviorSubject<Record<string, ReactionInfo>>({});
-
-  const vm = createCallViewModel$(
-    testScope(),
-    rtcSession.asMockedSession(),
-    room,
-    mediaDevices,
-    muteStates,
-    {
-      ...options,
-      livekitRoomFactory: (): LivekitRoom =>
-        mockLivekitRoom({
-          localParticipant,
-          disconnect: async () => Promise.resolve(),
-          setE2EEEnabled: async () => Promise.resolve(),
-        }),
-      connectionState$,
-      windowSize$,
-    },
-    raisedHands$,
-    reactions$,
-    new BehaviorSubject<ProcessorState>({
-      processor: undefined,
-      supported: undefined,
-    }),
-  );
-
-  onTestFinished(() => {
-    participantsSpy.mockRestore();
-    mediaSpy.mockRestore();
-    eventsSpy.mockRestore();
-    roomEventSelectorSpy.mockRestore();
-  });
-
-  continuation(vm, rtcSession, { raisedHands$: raisedHands$ }, setSyncState);
+    continuation(vm, rtcSession, { raisedHands$: raisedHands$ }, setSyncState);
+  };
 }
diff --git a/src/state/CallViewModel/LayoutSwitch.test.ts b/src/state/CallViewModel/LayoutSwitch.test.ts
index ae5a3896..0d184017 100644
--- a/src/state/CallViewModel/LayoutSwitch.test.ts
+++ b/src/state/CallViewModel/LayoutSwitch.test.ts
@@ -5,198 +5,128 @@ SPDX-License-Identifier: AGPL-3.0-only OR LicenseRef-Element-Commercial
 Please see LICENSE in the repository root for full details.
 */
 
-import { afterEach, beforeEach, describe, expect, test } from "vitest";
-import { firstValueFrom, of } from "rxjs";
+import { describe, test } from "vitest";
 
 import { createLayoutModeSwitch } from "./LayoutSwitch";
-import { ObservableScope } from "../ObservableScope";
-import { constant } from "../Behavior";
-import { withTestScheduler } from "../../utils/test";
+import { testScope, withTestScheduler } from "../../utils/test";
 
-let scope: ObservableScope;
-beforeEach(() => {
-  scope = new ObservableScope();
-});
-afterEach(() => {
-  scope.end();
-});
-
-describe("Default mode", () => {
-  test("Should be in grid layout by default", async () => {
-    const { gridMode$ } = createLayoutModeSwitch(
-      scope,
-      constant("normal"),
-      of(false),
-    );
-
-    const mode = await firstValueFrom(gridMode$);
-    expect(mode).toBe("grid");
-  });
-
-  test("Should switch to spotlight mode when window mode is flat", async () => {
-    const { gridMode$ } = createLayoutModeSwitch(
-      scope,
-      constant("flat"),
-      of(false),
-    );
-
-    const mode = await firstValueFrom(gridMode$);
-    expect(mode).toBe("spotlight");
-  });
-});
-
-test("Should allow switching modes manually", () => {
-  withTestScheduler(({ cold, behavior, expectObservable, schedule }): void => {
+function testLayoutSwitch({
+  windowMode = "n",
+  hasScreenShares = "n",
+  userSelection = "",
+  expectedGridMode,
+}: {
+  windowMode?: string;
+  hasScreenShares?: string;
+  userSelection?: string;
+  expectedGridMode: string;
+}): void {
+  withTestScheduler(({ behavior, schedule, expectObservable }) => {
     const { gridMode$, setGridMode } = createLayoutModeSwitch(
-      scope,
-      behavior("n", { n: "normal" }),
-      cold("f", { f: false, t: true }),
+      testScope(),
+      behavior(windowMode, { n: "normal", N: "narrow", f: "flat" }),
+      behavior(hasScreenShares, { y: true, n: false }),
     );
-
-    schedule("--sgs", {
-      s: () => setGridMode("spotlight"),
-      g: () => setGridMode("grid"),
-    });
-
-    expectObservable(gridMode$).toBe("g-sgs", {
-      g: "grid",
-      s: "spotlight",
-    });
-  });
-});
-
-test("Should switch to spotlight mode when there is a remote screen share", () => {
-  withTestScheduler(({ cold, behavior, expectObservable }): void => {
-    const shareMarble = "f--t";
-    const gridsMarble = "g--s";
-    const { gridMode$ } = createLayoutModeSwitch(
-      scope,
-      behavior("n", { n: "normal" }),
-      cold(shareMarble, { f: false, t: true }),
-    );
-
-    expectObservable(gridMode$).toBe(gridsMarble, {
-      g: "grid",
-      s: "spotlight",
-    });
-  });
-});
-
-test("Can manually force grid when there is a screenshare", () => {
-  withTestScheduler(({ cold, behavior, expectObservable, schedule }): void => {
-    const { gridMode$, setGridMode } = createLayoutModeSwitch(
-      scope,
-      behavior("n", { n: "normal" }),
-      cold("-ft", { f: false, t: true }),
-    );
-
-    schedule("---g", {
-      g: () => setGridMode("grid"),
-    });
-
-    expectObservable(gridMode$).toBe("ggsg", {
-      g: "grid",
-      s: "spotlight",
-    });
-  });
-});
-
-test("Should auto-switch after manually selected grid", () => {
-  withTestScheduler(({ cold, behavior, expectObservable, schedule }): void => {
-    const { gridMode$, setGridMode } = createLayoutModeSwitch(
-      scope,
-      behavior("n", { n: "normal" }),
-      // Two screenshares will happen in sequence
-      cold("-ft-ft", { f: false, t: true }),
-    );
-
-    // There was a screen-share that forced spotlight, then
-    // the user manually switch back to grid
-    schedule("---g", {
-      g: () => setGridMode("grid"),
-    });
-
-    // If we did want to respect manual selection, the expectation would be:
-    // const expectation = "ggsg";
-    const expectation = "ggsg-s";
-
-    expectObservable(gridMode$).toBe(expectation, {
-      g: "grid",
-      s: "spotlight",
-    });
-  });
-});
-
-test("Should switch back to grid mode when the remote screen share ends", () => {
-  withTestScheduler(({ cold, behavior, expectObservable }): void => {
-    const shareMarble = "f--t--f-";
-    const gridsMarble = "g--s--g-";
-    const { gridMode$ } = createLayoutModeSwitch(
-      scope,
-      behavior("n", { n: "normal" }),
-      cold(shareMarble, { f: false, t: true }),
-    );
-
-    expectObservable(gridMode$).toBe(gridsMarble, {
-      g: "grid",
-      s: "spotlight",
-    });
-  });
-});
-
-test("can auto-switch to spotlight again after first screen share ends", () => {
-  withTestScheduler(({ cold, behavior, expectObservable }): void => {
-    const shareMarble = "ftft";
-    const gridsMarble = "gsgs";
-    const { gridMode$ } = createLayoutModeSwitch(
-      scope,
-      behavior("n", { n: "normal" }),
-      cold(shareMarble, { f: false, t: true }),
-    );
-
-    expectObservable(gridMode$).toBe(gridsMarble, {
-      g: "grid",
-      s: "spotlight",
-    });
-  });
-});
-
-test("can switch manually to grid after screen share while manually in spotlight", () => {
-  withTestScheduler(({ cold, behavior, schedule, expectObservable }): void => {
-    // Initially, no one is sharing. Then the user manually switches to
-    // spotlight. After a screen share starts, the user manually switches to
-    // grid.
-    const shareMarbles = "  f-t-";
-    const setModeMarbles = "-s-g";
-    const expectation = "   gs-g";
-    const { gridMode$, setGridMode } = createLayoutModeSwitch(
-      scope,
-      behavior("n", { n: "normal" }),
-      cold(shareMarbles, { f: false, t: true }),
-    );
-    schedule(setModeMarbles, {
+    schedule(userSelection, {
       g: () => setGridMode("grid"),
       s: () => setGridMode("spotlight"),
     });
-
-    expectObservable(gridMode$).toBe(expectation, {
+    expectObservable(gridMode$).toBe(expectedGridMode, {
       g: "grid",
       s: "spotlight",
     });
   });
+}
+
+describe("default mode", () => {
+  test("uses grid layout by default", () =>
+    testLayoutSwitch({
+      expectedGridMode: "g",
+    }));
+
+  test("uses spotlight mode when window mode is flat", () =>
+    testLayoutSwitch({
+      windowMode: "      f",
+      expectedGridMode: "s",
+    }));
 });
 
-test("Should auto-switch to spotlight when in flat window mode", () => {
-  withTestScheduler(({ cold, behavior, expectObservable }): void => {
-    const { gridMode$ } = createLayoutModeSwitch(
-      scope,
-      behavior("naf", { n: "normal", a: "narrow", f: "flat" }),
-      cold("f", { f: false, t: true }),
-    );
+test("allows switching modes manually", () =>
+  testLayoutSwitch({
+    userSelection: "   --sgs",
+    expectedGridMode: "g-sgs",
+  }));
 
-    expectObservable(gridMode$).toBe("g-s-", {
-      g: "grid",
-      s: "spotlight",
-    });
-  });
-});
+test("switches to spotlight mode when there is a remote screen share", () =>
+  testLayoutSwitch({
+    hasScreenShares: " n--y",
+    expectedGridMode: "g--s",
+  }));
+
+test("can manually switch to grid when there is a screenshare", () =>
+  testLayoutSwitch({
+    hasScreenShares: " n-y",
+    userSelection: "   ---g",
+    expectedGridMode: "g-sg",
+  }));
+
+test("auto-switches after manually selecting grid", () =>
+  testLayoutSwitch({
+    // Two screenshares will happen in sequence. There is a screen share that
+    // forces spotlight, then the user manually switches back to grid.
+    hasScreenShares: " n-y-ny",
+    userSelection: "   ---g",
+    expectedGridMode: "g-sg-s",
+    // If we did want to respect manual selection, the expectation would be: g-sg
+  }));
+
+test("switches back to grid mode when the remote screen share ends", () =>
+  testLayoutSwitch({
+    hasScreenShares: " n--y--n",
+    expectedGridMode: "g--s--g",
+  }));
+
+test("auto-switches to spotlight again after first screen share ends", () =>
+  testLayoutSwitch({
+    hasScreenShares: " nyny",
+    expectedGridMode: "gsgs",
+  }));
+
+test("switches manually to grid after screen share while manually in spotlight", () =>
+  testLayoutSwitch({
+    // Initially, no one is sharing. Then the user manually switches to spotlight.
+    // After a screen share starts, the user manually switches to grid.
+    hasScreenShares: " n-y",
+    userSelection: "   -s-g",
+    expectedGridMode: "gs-g",
+  }));
+
+test("auto-switches to spotlight when in flat window mode", () =>
+  testLayoutSwitch({
+    // First normal, then narrow, then flat.
+    windowMode: "      nNf",
+    expectedGridMode: "g-s",
+  }));
+
+test("allows switching modes manually when in flat window mode", () =>
+  testLayoutSwitch({
+    // Window becomes flat, then user switches to grid and back.
+    // Finally the window returns to a normal shape.
+    windowMode: "      nf--n",
+    userSelection: "   --gs",
+    expectedGridMode: "gsgsg",
+  }));
+
+test("stays in spotlight while there are screen shares even when window mode changes", () =>
+  testLayoutSwitch({
+    windowMode: "      nfn",
+    hasScreenShares: " y",
+    expectedGridMode: "s",
+  }));
+
+test("ignores end of screen share until window mode returns to normal", () =>
+  testLayoutSwitch({
+    windowMode: "      nf-n",
+    hasScreenShares: " y-n",
+    expectedGridMode: "s--g",
+  }));
diff --git a/src/state/CallViewModel/LayoutSwitch.ts b/src/state/CallViewModel/LayoutSwitch.ts
index 3ad93204..97a4ee6f 100644
--- a/src/state/CallViewModel/LayoutSwitch.ts
+++ b/src/state/CallViewModel/LayoutSwitch.ts
@@ -6,122 +6,85 @@ Please see LICENSE in the repository root for full details.
 */
 
 import {
-  BehaviorSubject,
   combineLatest,
   map,
-  type Observable,
-  scan,
+  Subject,
+  startWith,
+  skipWhile,
+  switchMap,
 } from "rxjs";
-import { logger } from "matrix-js-sdk/lib/logger";
 
 import { type GridMode, type WindowMode } from "./CallViewModel.ts";
-import { type Behavior } from "../Behavior.ts";
+import { constant, type Behavior } from "../Behavior.ts";
 import { type ObservableScope } from "../ObservableScope.ts";
 
 /**
  * Creates a layout mode switch that allows switching between grid and spotlight modes.
- * The actual layout mode can be overridden to spotlight mode if there is a remote screen share active
- * or if the window mode is flat.
+ * The actual layout mode might switch automatically to spotlight if there is a
+ * remote screen share active or if the window mode is flat.
  *
  * @param scope - The observable scope to manage subscriptions.
- * @param windowMode$ - The current window mode observable.
- * @param hasRemoteScreenShares$ - An observable indicating if there are remote screen shares active.
+ * @param windowMode$ - The current window mode.
+ * @param hasRemoteScreenShares$ - A behavior indicating if there are remote screen shares active.
  */
 export function createLayoutModeSwitch(
   scope: ObservableScope,
   windowMode$: Behavior<WindowMode>,
-  hasRemoteScreenShares$: Observable<boolean>,
+  hasRemoteScreenShares$: Behavior<boolean>,
 ): {
   gridMode$: Behavior<GridMode>;
   setGridMode: (value: GridMode) => void;
 } {
-  const gridModeUserSelection$ = new BehaviorSubject<GridMode>("grid");
-
+  const userSelection$ = new Subject<GridMode>();
   // Callback to set the grid mode desired by the user.
   // Notice that this is only a preference, the actual grid mode can be overridden
   // if there is a remote screen share active.
-  const setGridMode = (value: GridMode): void => {
-    gridModeUserSelection$.next(value);
-  };
+  const setGridMode = (value: GridMode): void => userSelection$.next(value);
+
+  /**
+   * The natural grid mode - the mode that the grid would prefer to be in,
+   * not accounting for the user's manual selections.
+   */
+  const naturalGridMode$ = scope.behavior<GridMode>(
+    combineLatest(
+      [hasRemoteScreenShares$, windowMode$],
+      (hasRemoteScreenShares, windowMode) =>
+        // When there are screen shares or the window is flat (as with a phone
+        // in landscape orientation), spotlight is a better experience.
+        // We want screen shares to be big and readable, and we want flipping
+        // your phone into landscape to be a quick way of maximising the
+        // spotlight tile.
+        hasRemoteScreenShares || windowMode === "flat" ? "spotlight" : "grid",
+    ),
+  );
+
   /**
    * The layout mode of the media tile grid.
    */
-  const gridMode$ =
-    // If the user hasn't selected spotlight and somebody starts screen sharing,
-    // automatically switch to spotlight mode and reset when screen sharing ends
-    scope.behavior<GridMode>(
-      combineLatest([
-        gridModeUserSelection$,
-        hasRemoteScreenShares$,
-        windowMode$,
-      ]).pipe(
-        // Scan to keep track if we have auto-switched already or not.
-        // To allow the user to override the auto-switch by selecting grid mode again.
-        scan<
-          [GridMode, boolean, WindowMode],
-          {
-            mode: GridMode;
-            /** Remember if the change was user driven or not */
-            hasAutoSwitched: boolean;
-            /** To know if it is new screen share or an already handled */
-            hasScreenShares: boolean;
-          }
-        >(
-          (prev, [userSelection, hasScreenShares, windowMode]) => {
-            const isFlatMode = windowMode === "flat";
+  const gridMode$ = scope.behavior<GridMode>(
+    // Whenever the user makes a selection, we enter a new mode of behavior:
+    userSelection$.pipe(
+      map((selection) => {
+        if (selection === "grid")
+          // The user has selected grid mode. Start by respecting their choice,
+          // but then follow the natural mode again as soon as it matches.
+          return naturalGridMode$.pipe(
+            skipWhile((naturalMode) => naturalMode !== selection),
+            startWith(selection),
+          );
 
-            // Always force spotlight in flat mode, grid layout is not supported
-            // in that mode.
-            // TODO: strange that we do that for flat mode but not for other modes?
-            // TODO: Why is this not handled in layoutMedia$ like other window modes?
-            if (isFlatMode) {
-              logger.debug(`Forcing spotlight mode, windowMode=${windowMode}`);
-              return {
-                mode: "spotlight",
-                hasAutoSwitched: prev.hasAutoSwitched,
-                hasScreenShares,
-              };
-            }
-
-            // User explicitly chose spotlight.
-            // Respect that choice.
-            if (userSelection === "spotlight") {
-              return {
-                mode: "spotlight",
-                hasAutoSwitched: prev.hasAutoSwitched,
-                hasScreenShares,
-              };
-            }
-
-            // User has chosen grid mode. If a screen share starts, we will
-            // auto-switch to spotlight mode for better experience.
-            // But we only do it once, if the user switches back to grid mode,
-            // we respect that choice until they explicitly change it again.
-            const isNewShare = hasScreenShares && !prev.hasScreenShares;
-            if (isNewShare && !prev.hasAutoSwitched) {
-              return {
-                mode: "spotlight",
-                hasAutoSwitched: true,
-                hasScreenShares: true,
-              };
-            }
-
-            // Respect user's grid choice
-            // XXX If we want to forbid switching automatically again after we can
-            // return hasAutoSwitched: acc.hasAutoSwitched here instead of setting to false.
-            return {
-              mode: "grid",
-              hasAutoSwitched: false,
-              hasScreenShares,
-            };
-          },
-          // initial value
-          { mode: "grid", hasAutoSwitched: false, hasScreenShares: false },
-        ),
-        map(({ mode }) => mode),
-      ),
-      "grid",
-    );
+        // The user has selected spotlight mode. If this matches the natural
+        // mode, then follow the natural mode going forward.
+        return selection === naturalGridMode$.value
+          ? naturalGridMode$
+          : constant(selection);
+      }),
+      // Initially the mode of behavior is to just follow the natural grid mode.
+      startWith(naturalGridMode$),
+      // Switch between each mode of behavior.
+      switchMap((mode$) => mode$),
+    ),
+  );
 
   return {
     gridMode$,
diff --git a/src/state/CallViewModel/localMember/Publisher.ts b/src/state/CallViewModel/localMember/Publisher.ts
index df67f179..21c5d801 100644
--- a/src/state/CallViewModel/localMember/Publisher.ts
+++ b/src/state/CallViewModel/localMember/Publisher.ts
@@ -358,7 +358,7 @@ export class Publisher {
     const track$ = scope.behavior(
       observeTrackReference$(room.localParticipant, Track.Source.Camera).pipe(
         map((trackRef) => {
-          const track = trackRef?.publication?.track;
+          const track = trackRef?.publication.track;
           return track instanceof LocalVideoTrack ? track : null;
         }),
       ),
diff --git a/src/state/CallViewModel/remoteMembers/Connection.test.ts b/src/state/CallViewModel/remoteMembers/Connection.test.ts
index 8f9471d0..30c934b9 100644
--- a/src/state/CallViewModel/remoteMembers/Connection.test.ts
+++ b/src/state/CallViewModel/remoteMembers/Connection.test.ts
@@ -32,7 +32,6 @@ import {
   Connection,
   ConnectionState,
   type ConnectionOpts,
-  type PublishingParticipant,
 } from "./Connection.ts";
 import { ObservableScope } from "../../ObservableScope.ts";
 import { type OpenIDClientParts } from "../../../livekit/openIDSFU.ts";
@@ -40,6 +39,7 @@ import {
   ElementCallError,
   FailToGetOpenIdToken,
 } from "../../../utils/errors.ts";
+import { mockRemoteParticipant } from "../../../utils/test.ts";
 
 let testScope: ObservableScope;
 
@@ -377,46 +377,32 @@ describe("Start connection states", () => {
   });
 });
 
-function fakeRemoteLivekitParticipant(
-  id: string,
-  publications: number = 1,
-): RemoteParticipant {
-  return {
-    identity: id,
-    getTrackPublications: () => Array(publications),
-  } as unknown as RemoteParticipant;
-}
-
-describe("Publishing participants observations", () => {
-  it("should emit the list of publishing participants", () => {
+describe("remote participants", () => {
+  it("emits the list of remote participants", () => {
     setupTest();
 
     const connection = setupRemoteConnection();
 
-    const bobIsAPublisher = Promise.withResolvers<void>();
-    const danIsAPublisher = Promise.withResolvers<void>();
-    const observedPublishers: PublishingParticipant[][] = [];
-    const s = connection.remoteParticipantsWithTracks$.subscribe(
-      (publishers) => {
-        observedPublishers.push(publishers);
-        if (publishers.some((p) => p.identity === "@bob:example.org:DEV111")) {
-          bobIsAPublisher.resolve();
-        }
-        if (publishers.some((p) => p.identity === "@dan:example.org:DEV333")) {
-          danIsAPublisher.resolve();
-        }
-      },
-    );
+    const observedParticipants: RemoteParticipant[][] = [];
+    const s = connection.remoteParticipants$.subscribe((participants) => {
+      observedParticipants.push(participants);
+    });
     onTestFinished(() => s.unsubscribe());
-    // The publishingParticipants$ observable is derived from the current members of the
+    // The remoteParticipants$ observable is derived from the current members of the
     // livekitRoom and the rtc membership in order to publish the members that are publishing
     // on this connection.
 
-    let participants: RemoteParticipant[] = [
-      fakeRemoteLivekitParticipant("@alice:example.org:DEV000", 0),
-      fakeRemoteLivekitParticipant("@bob:example.org:DEV111", 0),
-      fakeRemoteLivekitParticipant("@carol:example.org:DEV222", 0),
-      fakeRemoteLivekitParticipant("@dan:example.org:DEV333", 0),
+    const participants: RemoteParticipant[] = [
+      mockRemoteParticipant({ identity: "@alice:example.org:DEV000" }),
+      mockRemoteParticipant({ identity: "@bob:example.org:DEV111" }),
+      mockRemoteParticipant({ identity: "@carol:example.org:DEV222" }),
+      // Mock Dan to have no published tracks. We want him to still show show up
+      // in the participants list.
+      mockRemoteParticipant({
+        identity: "@dan:example.org:DEV333",
+        getTrackPublication: () => undefined,
+        getTrackPublications: () => [],
+      }),
     ];
 
     // Let's simulate 3 members on the livekitRoom
@@ -428,21 +414,8 @@ describe("Publishing participants observations", () => {
       fakeLivekitRoom.emit(RoomEvent.ParticipantConnected, p),
     );
 
-    // At this point there should be no publishers
-    expect(observedPublishers.pop()!.length).toEqual(0);
-
-    participants = [
-      fakeRemoteLivekitParticipant("@alice:example.org:DEV000", 1),
-      fakeRemoteLivekitParticipant("@bob:example.org:DEV111", 1),
-      fakeRemoteLivekitParticipant("@carol:example.org:DEV222", 1),
-      fakeRemoteLivekitParticipant("@dan:example.org:DEV333", 2),
-    ];
-    participants.forEach((p) =>
-      fakeLivekitRoom.emit(RoomEvent.ParticipantConnected, p),
-    );
-
-    // At this point there should be no publishers
-    expect(observedPublishers.pop()!.length).toEqual(4);
+    // All remote participants should be present
+    expect(observedParticipants.pop()!.length).toEqual(4);
   });
 
   it("should be scoped to parent scope", (): void => {
@@ -450,16 +423,14 @@ describe("Publishing participants observations", () => {
 
     const connection = setupRemoteConnection();
 
-    let observedPublishers: PublishingParticipant[][] = [];
-    const s = connection.remoteParticipantsWithTracks$.subscribe(
-      (publishers) => {
-        observedPublishers.push(publishers);
-      },
-    );
+    let observedParticipants: RemoteParticipant[][] = [];
+    const s = connection.remoteParticipants$.subscribe((participants) => {
+      observedParticipants.push(participants);
+    });
     onTestFinished(() => s.unsubscribe());
 
     let participants: RemoteParticipant[] = [
-      fakeRemoteLivekitParticipant("@bob:example.org:DEV111", 0),
+      mockRemoteParticipant({ identity: "@bob:example.org:DEV111" }),
     ];
 
     // Let's simulate 3 members on the livekitRoom
@@ -471,35 +442,26 @@ describe("Publishing participants observations", () => {
       fakeLivekitRoom.emit(RoomEvent.ParticipantConnected, participant);
     }
 
-    // At this point there should be no publishers
-    expect(observedPublishers.pop()!.length).toEqual(0);
-
-    participants = [fakeRemoteLivekitParticipant("@bob:example.org:DEV111", 1)];
-
-    for (const participant of participants) {
-      fakeLivekitRoom.emit(RoomEvent.ParticipantConnected, participant);
-    }
-
-    // We should have bob has a publisher now
-    const publishers = observedPublishers.pop();
-    expect(publishers?.length).toEqual(1);
-    expect(publishers?.[0]?.identity).toEqual("@bob:example.org:DEV111");
+    // We should have bob as a participant now
+    const ps = observedParticipants.pop();
+    expect(ps?.length).toEqual(1);
+    expect(ps?.[0]?.identity).toEqual("@bob:example.org:DEV111");
 
     // end the parent scope
     testScope.end();
-    observedPublishers = [];
+    observedParticipants = [];
 
-    // SHOULD NOT emit any more publishers as the scope is ended
+    // SHOULD NOT emit any more participants as the scope is ended
     participants = participants.filter(
       (p) => p.identity !== "@bob:example.org:DEV111",
     );
 
     fakeLivekitRoom.emit(
       RoomEvent.ParticipantDisconnected,
-      fakeRemoteLivekitParticipant("@bob:example.org:DEV111"),
+      mockRemoteParticipant({ identity: "@bob:example.org:DEV111" }),
     );
 
-    expect(observedPublishers.length).toEqual(0);
+    expect(observedParticipants.length).toEqual(0);
   });
 });
 
diff --git a/src/state/CallViewModel/remoteMembers/Connection.ts b/src/state/CallViewModel/remoteMembers/Connection.ts
index 8b4479e8..05d0ec9e 100644
--- a/src/state/CallViewModel/remoteMembers/Connection.ts
+++ b/src/state/CallViewModel/remoteMembers/Connection.ts
@@ -13,9 +13,7 @@ import {
 import {
   ConnectionError,
   type Room as LivekitRoom,
-  type LocalParticipant,
   type RemoteParticipant,
-  RoomEvent,
 } from "livekit-client";
 import { type LivekitTransport } from "matrix-js-sdk/lib/matrixrtc";
 import { BehaviorSubject, map } from "rxjs";
@@ -35,8 +33,6 @@ import {
   UnknownCallError,
 } from "../../../utils/errors.ts";
 
-export type PublishingParticipant = LocalParticipant | RemoteParticipant;
-
 export interface ConnectionOpts {
   /** The media transport to connect to. */
   transport: LivekitTransport;
@@ -99,13 +95,13 @@ export class Connection {
   private scope: ObservableScope;
 
   /**
-   * An observable of the participants that are publishing on this connection. (Excluding our local participant)
-   * This is derived from `participantsIncludingSubscribers$` and `remoteTransports$`.
-   * It filters the participants to only those that are associated with a membership that claims to publish on this connection.
+   * The remote LiveKit participants that are visible on this connection.
+   *
+   * Note that this may include participants that are connected only to
+   * subscribe, or publishers that are otherwise unattested in MatrixRTC state.
+   * It is therefore more low-level than what should be presented to the user.
    */
-  public readonly remoteParticipantsWithTracks$: Behavior<
-    PublishingParticipant[]
-  >;
+  public readonly remoteParticipants$: Behavior<RemoteParticipant[]>;
 
   /**
    * Whether the connection has been stopped.
@@ -236,23 +232,9 @@ export class Connection {
     this.transport = transport;
     this.client = client;
 
-    // REMOTE participants with track!!!
-    // this.remoteParticipantsWithTracks$
-    this.remoteParticipantsWithTracks$ = scope.behavior(
-      // only tracks remote participants
-      connectedParticipantsObserver(this.livekitRoom, {
-        additionalRoomEvents: [
-          RoomEvent.TrackPublished,
-          RoomEvent.TrackUnpublished,
-        ],
-      }).pipe(
-        map((participants) => {
-          return participants.filter(
-            (participant) => participant.getTrackPublications().length > 0,
-          );
-        }),
-      ),
-      [],
+    this.remoteParticipants$ = scope.behavior(
+      // Only tracks remote participants
+      connectedParticipantsObserver(this.livekitRoom),
     );
 
     scope.onEnd(() => {
diff --git a/src/state/CallViewModel/remoteMembers/ConnectionManager.test.ts b/src/state/CallViewModel/remoteMembers/ConnectionManager.test.ts
index 484a44e7..70bfb4de 100644
--- a/src/state/CallViewModel/remoteMembers/ConnectionManager.test.ts
+++ b/src/state/CallViewModel/remoteMembers/ConnectionManager.test.ts
@@ -8,7 +8,7 @@ Please see LICENSE in the repository root for full details.
 import { afterEach, beforeEach, describe, expect, test, vi } from "vitest";
 import { BehaviorSubject } from "rxjs";
 import { type LivekitTransport } from "matrix-js-sdk/lib/matrixrtc";
-import { type Participant as LivekitParticipant } from "livekit-client";
+import { type RemoteParticipant } from "livekit-client";
 import { logger } from "matrix-js-sdk/lib/logger";
 
 import { Epoch, mapEpoch, ObservableScope } from "../../ObservableScope.ts";
@@ -52,7 +52,7 @@ beforeEach(() => {
       (transport: LivekitTransport, scope: ObservableScope) => {
         const mockConnection = {
           transport,
-          remoteParticipantsWithTracks$: new BehaviorSubject([]),
+          remoteParticipants$: new BehaviorSubject([]),
         } as unknown as Connection;
         vi.mocked(mockConnection).start = vi.fn();
         vi.mocked(mockConnection).stop = vi.fn();
@@ -200,24 +200,21 @@ describe("connections$ stream", () => {
 });
 
 describe("connectionManagerData$ stream", () => {
-  // Used in test to control fake connections' remoteParticipantsWithTracks$ streams
-  let fakePublishingParticipantsStreams: Map<
-    string,
-    Behavior<LivekitParticipant[]>
-  >;
+  // Used in test to control fake connections' remoteParticipants$ streams
+  let fakeRemoteParticipantsStreams: Map<string, Behavior<RemoteParticipant[]>>;
 
   function keyForTransport(transport: LivekitTransport): string {
     return `${transport.livekit_service_url}|${transport.livekit_alias}`;
   }
 
   beforeEach(() => {
-    fakePublishingParticipantsStreams = new Map();
+    fakeRemoteParticipantsStreams = new Map();
 
-    function getPublishingParticipantsFor(
+    function getRemoteParticipantsFor(
       transport: LivekitTransport,
-    ): Behavior<LivekitParticipant[]> {
+    ): Behavior<RemoteParticipant[]> {
       return (
-        fakePublishingParticipantsStreams.get(keyForTransport(transport)) ??
+        fakeRemoteParticipantsStreams.get(keyForTransport(transport)) ??
         new BehaviorSubject([])
       );
     }
@@ -227,13 +224,12 @@ describe("connectionManagerData$ stream", () => {
       .fn()
       .mockImplementation(
         (transport: LivekitTransport, scope: ObservableScope) => {
-          const fakePublishingParticipants$ = new BehaviorSubject<
-            LivekitParticipant[]
+          const fakeRemoteParticipants$ = new BehaviorSubject<
+            RemoteParticipant[]
           >([]);
           const mockConnection = {
             transport,
-            remoteParticipantsWithTracks$:
-              getPublishingParticipantsFor(transport),
+            remoteParticipants$: getRemoteParticipantsFor(transport),
           } as unknown as Connection;
           vi.mocked(mockConnection).start = vi.fn();
           vi.mocked(mockConnection).stop = vi.fn();
@@ -242,36 +238,36 @@ describe("connectionManagerData$ stream", () => {
             void mockConnection.stop();
           });
 
-          fakePublishingParticipantsStreams.set(
+          fakeRemoteParticipantsStreams.set(
             keyForTransport(transport),
-            fakePublishingParticipants$,
+            fakeRemoteParticipants$,
           );
           return mockConnection;
         },
       );
   });
 
-  test("Should report connections with the publishing participants", () => {
+  test("Should report connections with the remote participants", () => {
     withTestScheduler(({ expectObservable, schedule, behavior }) => {
       // Setup the fake participants streams behavior
       // ==============================
-      fakePublishingParticipantsStreams.set(
+      fakeRemoteParticipantsStreams.set(
         keyForTransport(TRANSPORT_1),
         behavior("oa-b", {
           o: [],
-          a: [{ identity: "user1A" } as LivekitParticipant],
+          a: [{ identity: "user1A" } as RemoteParticipant],
           b: [
-            { identity: "user1A" } as LivekitParticipant,
-            { identity: "user1B" } as LivekitParticipant,
+            { identity: "user1A" } as RemoteParticipant,
+            { identity: "user1B" } as RemoteParticipant,
           ],
         }),
       );
 
-      fakePublishingParticipantsStreams.set(
+      fakeRemoteParticipantsStreams.set(
         keyForTransport(TRANSPORT_2),
         behavior("o-a", {
           o: [],
-          a: [{ identity: "user2A" } as LivekitParticipant],
+          a: [{ identity: "user2A" } as RemoteParticipant],
         }),
       );
       // ==============================
diff --git a/src/state/CallViewModel/remoteMembers/ConnectionManager.ts b/src/state/CallViewModel/remoteMembers/ConnectionManager.ts
index 6660df62..4303d50a 100644
--- a/src/state/CallViewModel/remoteMembers/ConnectionManager.ts
+++ b/src/state/CallViewModel/remoteMembers/ConnectionManager.ts
@@ -9,7 +9,7 @@ Please see LICENSE in the repository root for full details.
 import { type LivekitTransport } from "matrix-js-sdk/lib/matrixrtc";
 import { combineLatest, map, of, switchMap, tap } from "rxjs";
 import { type Logger } from "matrix-js-sdk/lib/logger";
-import { type LocalParticipant, type RemoteParticipant } from "livekit-client";
+import { type RemoteParticipant } from "livekit-client";
 
 import { type Behavior } from "../../Behavior.ts";
 import { type Connection } from "./Connection.ts";
@@ -19,17 +19,12 @@ import { areLivekitTransportsEqual } from "./MatrixLivekitMembers.ts";
 import { type ConnectionFactory } from "./ConnectionFactory.ts";
 
 export class ConnectionManagerData {
-  private readonly store: Map<
-    string,
-    [Connection, (LocalParticipant | RemoteParticipant)[]]
-  > = new Map();
+  private readonly store: Map<string, [Connection, RemoteParticipant[]]> =
+    new Map();
 
   public constructor() {}
 
-  public add(
-    connection: Connection,
-    participants: (LocalParticipant | RemoteParticipant)[],
-  ): void {
+  public add(connection: Connection, participants: RemoteParticipant[]): void {
     const key = this.getKey(connection.transport);
     const existing = this.store.get(key);
     if (!existing) {
@@ -55,7 +50,7 @@ export class ConnectionManagerData {
 
   public getParticipantForTransport(
     transport: LivekitTransport,
-  ): (LocalParticipant | RemoteParticipant)[] {
+  ): RemoteParticipant[] {
     const key = transport.livekit_service_url + "|" + transport.livekit_alias;
     return this.store.get(key)?.[1] ?? [];
   }
@@ -67,10 +62,12 @@ interface Props {
   inputTransports$: Behavior<Epoch<LivekitTransport[]>>;
   logger: Logger;
 }
+
 // TODO - write test for scopes (do we really need to bind scope)
 export interface IConnectionManager {
   connectionManagerData$: Behavior<Epoch<ConnectionManagerData>>;
 }
+
 /**
  * Crete a `ConnectionManager`
  * @param scope the observable scope used by this object.
@@ -153,23 +150,24 @@ export function createConnectionManager$({
         const epoch = connections.epoch;
 
         // Map the connections to list of {connection, participants}[]
-        const listOfConnectionsWithPublishingParticipants =
-          connections.value.map((connection) => {
-            return connection.remoteParticipantsWithTracks$.pipe(
+        const listOfConnectionsWithRemoteParticipants = connections.value.map(
+          (connection) => {
+            return connection.remoteParticipants$.pipe(
               map((participants) => ({
                 connection,
                 participants,
               })),
             );
-          });
+          },
+        );
 
         // probably not required
-        if (listOfConnectionsWithPublishingParticipants.length === 0) {
+        if (listOfConnectionsWithRemoteParticipants.length === 0) {
           return of(new Epoch(new ConnectionManagerData(), epoch));
         }
 
         // combineLatest the several streams into a single stream with the ConnectionManagerData
-        return combineLatest(listOfConnectionsWithPublishingParticipants).pipe(
+        return combineLatest(listOfConnectionsWithRemoteParticipants).pipe(
           map(
             (lists) =>
               new Epoch(
diff --git a/src/state/CallViewModel/remoteMembers/MatrixLivekitMembers.test.ts b/src/state/CallViewModel/remoteMembers/MatrixLivekitMembers.test.ts
index 68a67546..91266dc5 100644
--- a/src/state/CallViewModel/remoteMembers/MatrixLivekitMembers.test.ts
+++ b/src/state/CallViewModel/remoteMembers/MatrixLivekitMembers.test.ts
@@ -14,7 +14,7 @@ import { BehaviorSubject, combineLatest, map, type Observable } from "rxjs";
 
 import { type IConnectionManager } from "./ConnectionManager.ts";
 import {
-  type MatrixLivekitMember,
+  type RemoteMatrixLivekitMember,
   createMatrixLivekitMembers$,
 } from "./MatrixLivekitMembers.ts";
 import {
@@ -102,10 +102,10 @@ test("should signal participant not yet connected to livekit", async () => {
 
   await flushPromises();
   expect(matrixLivekitMember$.value.value).toSatisfy(
-    (data: MatrixLivekitMember[]) => {
+    (data: RemoteMatrixLivekitMember[]) => {
       expect(data.length).toEqual(1);
       expect(data[0].membership$.value).toBe(bobMembership);
-      expect(data[0].participant$.value).toBe(null);
+      expect(data[0].participant.value$.value).toBe(null);
       expect(data[0].connection$.value).toBe(null);
       return true;
     },
@@ -171,10 +171,10 @@ test("should signal participant on a connection that is publishing", async () =>
 
   await flushPromises();
   expect(matrixLivekitMember$.value.value).toSatisfy(
-    (data: MatrixLivekitMember[]) => {
+    (data: RemoteMatrixLivekitMember[]) => {
       expect(data.length).toEqual(1);
       expect(data[0].membership$.value).toBe(bobMembership);
-      expect(data[0].participant$.value).toSatisfy((participant) => {
+      expect(data[0].participant.value$.value).toSatisfy((participant) => {
         expect(participant).toBeDefined();
         expect(participant!.identity).toEqual(bobParticipantId);
         return true;
@@ -210,10 +210,10 @@ test("should signal participant on a connection that is not publishing", async (
   });
   await flushPromises();
   expect(matrixLivekitMember$.value.value).toSatisfy(
-    (data: MatrixLivekitMember[]) => {
+    (data: RemoteMatrixLivekitMember[]) => {
       expect(data.length).toEqual(1);
       expect(data[0].membership$.value).toBe(bobMembership);
-      expect(data[0].participant$.value).toBe(null);
+      expect(data[0].participant.value$.value).toBe(null);
       expect(data[0].connection$.value).toBe(connection);
       return true;
     },
@@ -258,11 +258,11 @@ describe("Publication edge case", () => {
     });
     await flushPromises();
     expect(matrixLivekitMember$.value.value).toSatisfy(
-      (data: MatrixLivekitMember[]) => {
+      (data: RemoteMatrixLivekitMember[]) => {
         expect(data.length).toEqual(2);
         expect(data[0].membership$.value).toBe(bobMembership);
         expect(data[0].connection$.value).toBe(connectionA);
-        expect(data[0].participant$.value).toSatisfy((participant) => {
+        expect(data[0].participant.value$.value).toSatisfy((participant) => {
           expect(participant).toBeDefined();
           expect(participant!.identity).toEqual(bobParticipantId);
           return true;
@@ -317,11 +317,11 @@ test("bob is publishing in the wrong connection", async () => {
 
   await flushPromises();
   expect(matrixLivekitMember$.value.value).toSatisfy(
-    (data: MatrixLivekitMember[]) => {
+    (data: RemoteMatrixLivekitMember[]) => {
       expect(data.length).toEqual(2);
       expect(data[0].membership$.value).toBe(bobMembership);
       expect(data[0].connection$.value).toBe(connectionA);
-      expect(data[0].participant$.value).toBe(null);
+      expect(data[0].participant.value$.value).toBe(null);
       return true;
     },
   );
diff --git a/src/state/CallViewModel/remoteMembers/MatrixLivekitMembers.ts b/src/state/CallViewModel/remoteMembers/MatrixLivekitMembers.ts
index 30abfc9b..0c61ba06 100644
--- a/src/state/CallViewModel/remoteMembers/MatrixLivekitMembers.ts
+++ b/src/state/CallViewModel/remoteMembers/MatrixLivekitMembers.ts
@@ -5,10 +5,7 @@ SPDX-License-Identifier: AGPL-3.0-only OR LicenseRef-Element-Commercial
 Please see LICENSE in the repository root for full details.
 */
 
-import {
-  type LocalParticipant as LocalLivekitParticipant,
-  type RemoteParticipant as RemoteLivekitParticipant,
-} from "livekit-client";
+import { type LocalParticipant, type RemoteParticipant } from "livekit-client";
 import {
   type LivekitTransport,
   type CallMembership,
@@ -25,22 +22,44 @@ import { computeLivekitParticipantIdentity$ } from "./LivekitParticipantIdentity
 
 const logger = rootLogger.getChild("[MatrixLivekitMembers]");
 
-/**
- * Represents a Matrix call member and their associated LiveKit participation.
- * `livekitParticipant` can be undefined if the member is not yet connected to the livekit room
- * or if it has no livekit transport at all.
- */
-export interface MatrixLivekitMember {
+interface LocalTaggedParticipant {
+  type: "local";
+  value$: Behavior<LocalParticipant | null>;
+}
+interface RemoteTaggedParticipant {
+  type: "remote";
+  value$: Behavior<RemoteParticipant | null>;
+}
+export type TaggedParticipant =
+  | LocalTaggedParticipant
+  | RemoteTaggedParticipant;
+
+interface MatrixLivekitMember {
   membership$: Behavior<CallMembership>;
-  participant$: Behavior<
-    LocalLivekitParticipant | RemoteLivekitParticipant | null
-  >;
   connection$: Behavior<Connection | null>;
   // participantId: string; We do not want a participantId here since it will be generated by the jwt
   // TODO decide if we can also drop the userId. Its in the matrix membership anyways.
   userId: string;
 }
 
+/**
+ * Represents the local Matrix call member and their associated LiveKit participation.
+ * `livekitParticipant` can be null if the member is not yet connected to the livekit room
+ * or if it has no livekit transport at all.
+ */
+export interface LocalMatrixLivekitMember extends MatrixLivekitMember {
+  participant: LocalTaggedParticipant;
+}
+
+/**
+ * Represents a remote Matrix call member and their associated LiveKit participation.
+ * `livekitParticipant` can be null if the member is not yet connected to the livekit room
+ * or if it has no livekit transport at all.
+ */
+export interface RemoteMatrixLivekitMember extends MatrixLivekitMember {
+  participant: RemoteTaggedParticipant;
+}
+
 interface Props {
   scope: ObservableScope;
   membershipsWithTransport$: Behavior<
@@ -62,7 +81,7 @@ export function createMatrixLivekitMembers$({
   scope,
   membershipsWithTransport$,
   connectionManager,
-}: Props): Behavior<Epoch<MatrixLivekitMember[]>> {
+}: Props): Behavior<Epoch<RemoteMatrixLivekitMember[]>> {
   /**
    * This internal observable is used to compute the async sha256 hash of the user's identity.
    * a promise is treated like an observable. So we can switchMap on the promise from the identity computation.
@@ -138,12 +157,14 @@ export function createMatrixLivekitMembers$({
           logger.debug(
             `Generating member for livekitIdentity: ${identity}, userId:deviceId: ${userId}${deviceId}`,
           );
+          const { participant$, ...rest } = scope.splitBehavior(data$);
           // will only get called once per `participantId, userId` pair.
           // updates to data$ and as a result to displayName$ and mxcAvatarUrl$ are more frequent.
           return {
             identity,
             userId,
-            ...scope.splitBehavior(data$),
+            participant: { type: "remote" as const, value$: participant$ },
+            ...rest,
           };
         },
       ),
diff --git a/src/state/CallViewModel/remoteMembers/integration.test.ts b/src/state/CallViewModel/remoteMembers/integration.test.ts
index 3ad81fa8..202b3f56 100644
--- a/src/state/CallViewModel/remoteMembers/integration.test.ts
+++ b/src/state/CallViewModel/remoteMembers/integration.test.ts
@@ -30,7 +30,7 @@ import { type ProcessorState } from "../../../livekit/TrackProcessorContext.tsx"
 import {
   areLivekitTransportsEqual,
   createMatrixLivekitMembers$,
-  type MatrixLivekitMember,
+  type RemoteMatrixLivekitMember,
 } from "./MatrixLivekitMembers.ts";
 import { createConnectionManager$ } from "./ConnectionManager.ts";
 import { membershipsAndTransports$ } from "../../SessionBehaviors.ts";
@@ -138,7 +138,7 @@ test("bob, carl, then bob joining no tracks yet", () => {
     });
 
     expectObservable(matrixLivekitItems$).toBe(vMarble, {
-      a: expect.toSatisfy((e: Epoch<MatrixLivekitMember[]>) => {
+      a: expect.toSatisfy((e: Epoch<RemoteMatrixLivekitMember[]>) => {
         const items = e.value;
         expect(items.length).toBe(1);
         const item = items[0]!;
@@ -153,12 +153,12 @@ test("bob, carl, then bob joining no tracks yet", () => {
             ),
           ),
         });
-        expectObservable(item.participant$).toBe("a", {
+        expectObservable(item.participant.value$).toBe("a", {
           a: null,
         });
         return true;
       }),
-      b: expect.toSatisfy((e: Epoch<MatrixLivekitMember[]>) => {
+      b: expect.toSatisfy((e: Epoch<RemoteMatrixLivekitMember[]>) => {
         const items = e.value;
         expect(items.length).toBe(2);
 
@@ -167,7 +167,7 @@ test("bob, carl, then bob joining no tracks yet", () => {
           expectObservable(item.membership$).toBe("a", {
             a: bobMembership,
           });
-          expectObservable(item.participant$).toBe("a", {
+          expectObservable(item.participant.value$).toBe("a", {
             a: null,
           });
         }
@@ -178,7 +178,7 @@ test("bob, carl, then bob joining no tracks yet", () => {
           expectObservable(item.membership$).toBe("a", {
             a: carlMembership,
           });
-          expectObservable(item.participant$).toBe("a", {
+          expectObservable(item.participant.value$).toBe("a", {
             a: null,
           });
           expectObservable(item.connection$).toBe("a", {
@@ -195,7 +195,7 @@ test("bob, carl, then bob joining no tracks yet", () => {
         }
         return true;
       }),
-      c: expect.toSatisfy((e: Epoch<MatrixLivekitMember[]>) => {
+      c: expect.toSatisfy((e: Epoch<RemoteMatrixLivekitMember[]>) => {
         const items = e.value;
         expect(items.length).toBe(3);
 
@@ -222,7 +222,7 @@ test("bob, carl, then bob joining no tracks yet", () => {
               return true;
             }),
           });
-          expectObservable(item.participant$).toBe("a", {
+          expectObservable(item.participant.value$).toBe("a", {
             a: null,
           });
         }
diff --git a/src/state/CallViewModelWidget.test.ts b/src/state/CallViewModelWidget.test.ts
index afcf69ba..5d6442f1 100644
--- a/src/state/CallViewModelWidget.test.ts
+++ b/src/state/CallViewModelWidget.test.ts
@@ -15,6 +15,7 @@ import { constant } from "./Behavior.ts";
 import { aliceParticipant, localRtcMember } from "../utils/test-fixtures.ts";
 import { ElementWidgetActions, widget } from "../widget.ts";
 import { E2eeType } from "../e2ee/e2eeType.ts";
+import { MatrixRTCMode } from "../settings/settings.ts";
 
 vi.mock("@livekit/components-core", { spy: true });
 
@@ -34,36 +35,43 @@ vi.mock("../widget", () => ({
   },
 }));
 
-it("expect leave when ElementWidgetActions.HangupCall is called", async () => {
-  const pr = Promise.withResolvers<string>();
-  withCallViewModel(
-    {
-      remoteParticipants$: constant([aliceParticipant]),
-      rtcMembers$: constant([localRtcMember]),
-    },
-    (vm: CallViewModel) => {
-      vm.leave$.subscribe((s: string) => {
-        pr.resolve(s);
-      });
+it.each([
+  [MatrixRTCMode.Legacy],
+  [MatrixRTCMode.Compatibil],
+  [MatrixRTCMode.Matrix_2_0],
+])(
+  "expect leave when ElementWidgetActions.HangupCall is called (%s mode)",
+  async (mode) => {
+    const pr = Promise.withResolvers<string>();
+    withCallViewModel(mode)(
+      {
+        remoteParticipants$: constant([aliceParticipant]),
+        rtcMembers$: constant([localRtcMember]),
+      },
+      (vm: CallViewModel) => {
+        vm.leave$.subscribe((s: string) => {
+          pr.resolve(s);
+        });
 
-      widget!.lazyActions!.emit(
-        ElementWidgetActions.HangupCall,
-        new CustomEvent(ElementWidgetActions.HangupCall, {
-          detail: {
-            action: "im.vector.hangup",
-            api: "toWidget",
-            data: {},
-            requestId: "widgetapi-1761237395918",
-            widgetId: "mrUjS9T6uKUOWHMxXvLbSv0F",
-          },
-        }),
-      );
-    },
-    {
-      encryptionSystem: { kind: E2eeType.PER_PARTICIPANT },
-    },
-  );
+        widget!.lazyActions!.emit(
+          ElementWidgetActions.HangupCall,
+          new CustomEvent(ElementWidgetActions.HangupCall, {
+            detail: {
+              action: "im.vector.hangup",
+              api: "toWidget",
+              data: {},
+              requestId: "widgetapi-1761237395918",
+              widgetId: "mrUjS9T6uKUOWHMxXvLbSv0F",
+            },
+          }),
+        );
+      },
+      {
+        encryptionSystem: { kind: E2eeType.PER_PARTICIPANT },
+      },
+    );
 
-  const source = await pr.promise;
-  expect(source).toBe("user");
-});
+    const source = await pr.promise;
+    expect(source).toBe("user");
+  },
+);
diff --git a/src/state/MediaViewModel.test.ts b/src/state/MediaViewModel.test.ts
index 61fa2d8c..92868216 100644
--- a/src/state/MediaViewModel.test.ts
+++ b/src/state/MediaViewModel.test.ts
@@ -20,6 +20,7 @@ import {
   createLocalMedia,
   createRemoteMedia,
   withTestScheduler,
+  mockRemoteParticipant,
 } from "../utils/test";
 import { getValue } from "../utils/observable";
 import { constant } from "./Behavior";
@@ -44,7 +45,11 @@ const rtcMembership = mockRtcMembership("@alice:example.org", "AAAA");
 
 test("control a participant's volume", () => {
   const setVolumeSpy = vi.fn();
-  const vm = createRemoteMedia(rtcMembership, {}, { setVolume: setVolumeSpy });
+  const vm = createRemoteMedia(
+    rtcMembership,
+    {},
+    mockRemoteParticipant({ setVolume: setVolumeSpy }),
+  );
   withTestScheduler(({ expectObservable, schedule }) => {
     schedule("-ab---c---d|", {
       a() {
@@ -88,7 +93,7 @@ test("control a participant's volume", () => {
 });
 
 test("toggle fit/contain for a participant's video", () => {
-  const vm = createRemoteMedia(rtcMembership, {}, {});
+  const vm = createRemoteMedia(rtcMembership, {}, mockRemoteParticipant({}));
   withTestScheduler(({ expectObservable, schedule }) => {
     schedule("-ab|", {
       a: () => vm.toggleFitContain(),
@@ -199,3 +204,35 @@ test("switch cameras", async () => {
   });
   expect(deviceId).toBe("front camera");
 });
+
+test("remote media is in waiting state when participant has not yet connected", () => {
+  const vm = createRemoteMedia(rtcMembership, {}, null); // null participant
+  expect(vm.waitingForMedia$.value).toBe(true);
+});
+
+test("remote media is not in waiting state when participant is connected", () => {
+  const vm = createRemoteMedia(rtcMembership, {}, mockRemoteParticipant({}));
+  expect(vm.waitingForMedia$.value).toBe(false);
+});
+
+test("remote media is not in waiting state when participant is connected with no publications", () => {
+  const vm = createRemoteMedia(
+    rtcMembership,
+    {},
+    mockRemoteParticipant({
+      getTrackPublication: () => undefined,
+      getTrackPublications: () => [],
+    }),
+  );
+  expect(vm.waitingForMedia$.value).toBe(false);
+});
+
+test("remote media is not in waiting state when user does not intend to publish anywhere", () => {
+  const vm = createRemoteMedia(
+    rtcMembership,
+    {},
+    mockRemoteParticipant({}),
+    undefined, // No room (no advertised transport)
+  );
+  expect(vm.waitingForMedia$.value).toBe(false);
+});
diff --git a/src/state/MediaViewModel.ts b/src/state/MediaViewModel.ts
index 74e64b93..9888d6bf 100644
--- a/src/state/MediaViewModel.ts
+++ b/src/state/MediaViewModel.ts
@@ -7,8 +7,8 @@ Please see LICENSE in the repository root for full details.
 
 import {
   type AudioSource,
-  type TrackReferenceOrPlaceholder,
   type VideoSource,
+  type TrackReference,
   observeParticipantEvents,
   observeParticipantMedia,
   roomEventSelector,
@@ -33,7 +33,6 @@ import {
   type Observable,
   Subject,
   combineLatest,
-  distinctUntilKeyChanged,
   filter,
   fromEvent,
   interval,
@@ -60,14 +59,11 @@ import { type ObservableScope } from "./ObservableScope";
 export function observeTrackReference$(
   participant: Participant,
   source: Track.Source,
-): Observable<TrackReferenceOrPlaceholder> {
+): Observable<TrackReference | undefined> {
   return observeParticipantMedia(participant).pipe(
-    map(() => ({
-      participant: participant,
-      publication: participant.getTrackPublication(source),
-      source,
-    })),
-    distinctUntilKeyChanged("publication"),
+    map(() => participant.getTrackPublication(source)),
+    distinctUntilChanged(),
+    map((publication) => publication && { participant, publication, source }),
   );
 }
 
@@ -226,7 +222,7 @@ abstract class BaseMediaViewModel {
   /**
    * The LiveKit video track for this media.
    */
-  public readonly video$: Behavior<TrackReferenceOrPlaceholder | null>;
+  public readonly video$: Behavior<TrackReference | undefined>;
   /**
    * Whether there should be a warning that this media is unencrypted.
    */
@@ -241,10 +237,12 @@ abstract class BaseMediaViewModel {
 
   private observeTrackReference$(
     source: Track.Source,
-  ): Behavior<TrackReferenceOrPlaceholder | null> {
+  ): Behavior<TrackReference | undefined> {
     return this.scope.behavior(
       this.participant$.pipe(
-        switchMap((p) => (!p ? of(null) : observeTrackReference$(p, source))),
+        switchMap((p) =>
+          !p ? of(undefined) : observeTrackReference$(p, source),
+        ),
       ),
     );
   }
@@ -268,7 +266,7 @@ abstract class BaseMediaViewModel {
     encryptionSystem: EncryptionSystem,
     audioSource: AudioSource,
     videoSource: VideoSource,
-    livekitRoom$: Behavior<LivekitRoom | undefined>,
+    protected readonly livekitRoom$: Behavior<LivekitRoom | undefined>,
     public readonly focusUrl$: Behavior<string | undefined>,
     public readonly displayName$: Behavior<string>,
     public readonly mxcAvatarUrl$: Behavior<string | undefined>,
@@ -281,8 +279,8 @@ abstract class BaseMediaViewModel {
         [audio$, this.video$],
         (a, v) =>
           encryptionSystem.kind !== E2eeType.NONE &&
-          (a?.publication?.isEncrypted === false ||
-            v?.publication?.isEncrypted === false),
+          (a?.publication.isEncrypted === false ||
+            v?.publication.isEncrypted === false),
       ),
     );
 
@@ -471,7 +469,7 @@ export class LocalUserMediaViewModel extends BaseUserMediaViewModel {
   private readonly videoTrack$: Observable<LocalVideoTrack | null> =
     this.video$.pipe(
       switchMap((v) => {
-        const track = v?.publication?.track;
+        const track = v?.publication.track;
         if (!(track instanceof LocalVideoTrack)) return of(null);
         return merge(
           // Watch for track restarts because they indicate a camera switch.
@@ -596,6 +594,21 @@ export class LocalUserMediaViewModel extends BaseUserMediaViewModel {
  * A remote participant's user media.
  */
 export class RemoteUserMediaViewModel extends BaseUserMediaViewModel {
+  /**
+   * Whether we are waiting for this user's LiveKit participant to exist. This
+   * could be because either we or the remote party are still connecting.
+   */
+  public readonly waitingForMedia$ = this.scope.behavior<boolean>(
+    combineLatest(
+      [this.livekitRoom$, this.participant$],
+      (livekitRoom, participant) =>
+        // If livekitRoom is undefined, the user is not attempting to publish on
+        // any transport and so we shouldn't expect a participant. (They might
+        // be a subscribe-only bot for example.)
+        livekitRoom !== undefined && participant === null,
+    ),
+  );
+
   // This private field is used to override the value from the superclass
   private __speaking$: Behavior<boolean>;
   public get speaking$(): Behavior<boolean> {
diff --git a/src/state/UserMedia.ts b/src/state/UserMedia.ts
index 38f22122..690870e6 100644
--- a/src/state/UserMedia.ts
+++ b/src/state/UserMedia.ts
@@ -27,6 +27,7 @@ import type { ReactionOption } from "../reactions";
 import { observeSpeaker$ } from "./observeSpeaker.ts";
 import { generateItems } from "../utils/observable.ts";
 import { ScreenShare } from "./ScreenShare.ts";
+import { type TaggedParticipant } from "./CallViewModel/remoteMembers/MatrixLivekitMembers.ts";
 
 /**
  * Sorting bins defining the order in which media tiles appear in the layout.
@@ -68,40 +69,46 @@ enum SortingBin {
  * for inclusion in the call layout and tracks associated screen shares.
  */
 export class UserMedia {
-  public readonly vm: UserMediaViewModel = this.participant$.value?.isLocal
-    ? new LocalUserMediaViewModel(
-        this.scope,
-        this.id,
-        this.userId,
-        this.participant$ as Behavior<LocalParticipant | null>,
-        this.encryptionSystem,
-        this.livekitRoom$,
-        this.focusUrl$,
-        this.mediaDevices,
-        this.displayName$,
-        this.mxcAvatarUrl$,
-        this.scope.behavior(this.handRaised$),
-        this.scope.behavior(this.reaction$),
-      )
-    : new RemoteUserMediaViewModel(
-        this.scope,
-        this.id,
-        this.userId,
-        this.participant$ as Behavior<RemoteParticipant | null>,
-        this.encryptionSystem,
-        this.livekitRoom$,
-        this.focusUrl$,
-        this.pretendToBeDisconnected$,
-        this.displayName$,
-        this.mxcAvatarUrl$,
-        this.scope.behavior(this.handRaised$),
-        this.scope.behavior(this.reaction$),
-      );
+  public readonly vm: UserMediaViewModel =
+    this.participant.type === "local"
+      ? new LocalUserMediaViewModel(
+          this.scope,
+          this.id,
+          this.userId,
+          this.participant.value$,
+          this.encryptionSystem,
+          this.livekitRoom$,
+          this.focusUrl$,
+          this.mediaDevices,
+          this.displayName$,
+          this.mxcAvatarUrl$,
+          this.scope.behavior(this.handRaised$),
+          this.scope.behavior(this.reaction$),
+        )
+      : new RemoteUserMediaViewModel(
+          this.scope,
+          this.id,
+          this.userId,
+          this.participant.value$,
+          this.encryptionSystem,
+          this.livekitRoom$,
+          this.focusUrl$,
+          this.pretendToBeDisconnected$,
+          this.displayName$,
+          this.mxcAvatarUrl$,
+          this.scope.behavior(this.handRaised$),
+          this.scope.behavior(this.reaction$),
+        );
 
   private readonly speaker$ = this.scope.behavior(
     observeSpeaker$(this.vm.speaking$),
   );
 
+  // TypeScript needs this widening of the type to happen in a separate statement
+  private readonly participant$: Behavior<
+    LocalParticipant | RemoteParticipant | null
+  > = this.participant.value$;
+
   /**
    * All screen share media associated with this user media.
    */
@@ -184,9 +191,7 @@ export class UserMedia {
     private readonly scope: ObservableScope,
     public readonly id: string,
     private readonly userId: string,
-    private readonly participant$: Behavior<
-      LocalParticipant | RemoteParticipant | null
-    >,
+    private readonly participant: TaggedParticipant,
     private readonly encryptionSystem: EncryptionSystem,
     private readonly livekitRoom$: Behavior<LivekitRoom | undefined>,
     private readonly focusUrl$: Behavior<string | undefined>,
diff --git a/src/tile/GridTile.test.tsx b/src/tile/GridTile.test.tsx
index e3172a22..9bc0efb2 100644
--- a/src/tile/GridTile.test.tsx
+++ b/src/tile/GridTile.test.tsx
@@ -12,7 +12,11 @@ import { axe } from "vitest-axe";
 import { type MatrixRTCSession } from "matrix-js-sdk/lib/matrixrtc";
 
 import { GridTile } from "./GridTile";
-import { mockRtcMembership, createRemoteMedia } from "../utils/test";
+import {
+  mockRtcMembership,
+  createRemoteMedia,
+  mockRemoteParticipant,
+} from "../utils/test";
 import { GridTileViewModel } from "../state/TileViewModel";
 import { ReactionsSenderProvider } from "../reactions/useReactionsSender";
 import type { CallViewModel } from "../state/CallViewModel/CallViewModel";
@@ -31,11 +35,11 @@ test("GridTile is accessible", async () => {
       rawDisplayName: "Alice",
       getMxcAvatarUrl: () => "mxc://adfsg",
     },
-    {
+    mockRemoteParticipant({
       setVolume() {},
       getTrackPublication: () =>
         ({}) as Partial<RemoteTrackPublication> as RemoteTrackPublication,
-    },
+    }),
   );
 
   const fakeRtcSession = {
diff --git a/src/tile/GridTile.tsx b/src/tile/GridTile.tsx
index 57409869..2f750c50 100644
--- a/src/tile/GridTile.tsx
+++ b/src/tile/GridTile.tsx
@@ -69,6 +69,7 @@ interface UserMediaTileProps extends TileProps {
   vm: UserMediaViewModel;
   mirror: boolean;
   locallyMuted: boolean;
+  waitingForMedia?: boolean;
   primaryButton?: ReactNode;
   menuStart?: ReactNode;
   menuEnd?: ReactNode;
@@ -79,6 +80,7 @@ const UserMediaTile: FC<UserMediaTileProps> = ({
   vm,
   showSpeakingIndicators,
   locallyMuted,
+  waitingForMedia,
   primaryButton,
   menuStart,
   menuEnd,
@@ -148,7 +150,7 @@ const UserMediaTile: FC<UserMediaTileProps> = ({
   const tile = (
     <MediaView
       ref={ref}
-      video={video ?? undefined}
+      video={video}
       userId={vm.userId}
       unencryptedWarning={unencryptedWarning}
       encryptionStatus={encryptionStatus}
@@ -194,7 +196,7 @@ const UserMediaTile: FC<UserMediaTileProps> = ({
       raisedHandTime={handRaised ?? undefined}
       currentReaction={reaction ?? undefined}
       raisedHandOnClick={raisedHandOnClick}
-      localParticipant={vm.local}
+      waitingForMedia={waitingForMedia}
       focusUrl={focusUrl}
       audioStreamStats={audioStreamStats}
       videoStreamStats={videoStreamStats}
@@ -290,6 +292,7 @@ const RemoteUserMediaTile: FC<RemoteUserMediaTileProps> = ({
   ...props
 }) => {
   const { t } = useTranslation();
+  const waitingForMedia = useBehavior(vm.waitingForMedia$);
   const locallyMuted = useBehavior(vm.locallyMuted$);
   const localVolume = useBehavior(vm.localVolume$);
   const onSelectMute = useCallback(
@@ -311,6 +314,7 @@ const RemoteUserMediaTile: FC<RemoteUserMediaTileProps> = ({
     <UserMediaTile
       ref={ref}
       vm={vm}
+      waitingForMedia={waitingForMedia}
       locallyMuted={locallyMuted}
       mirror={false}
       menuStart={
diff --git a/src/tile/MediaView.test.tsx b/src/tile/MediaView.test.tsx
index c8ffbefd..fdfdb631 100644
--- a/src/tile/MediaView.test.tsx
+++ b/src/tile/MediaView.test.tsx
@@ -47,7 +47,6 @@ describe("MediaView", () => {
     video: trackReference,
     userId: "@alice:example.com",
     mxcAvatarUrl: undefined,
-    localParticipant: false,
     focusable: true,
   };
 
@@ -66,24 +65,13 @@ describe("MediaView", () => {
     });
   });
 
-  describe("with no participant", () => {
-    it("shows avatar for local user", () => {
-      render(
-        <MediaView {...baseProps} video={undefined} localParticipant={true} />,
-      );
+  describe("with no video", () => {
+    it("shows avatar", () => {
+      render(<MediaView {...baseProps} video={undefined} />);
       expect(
         screen.getByRole("img", { name: "@alice:example.com" }),
       ).toBeVisible();
-      expect(screen.queryAllByText("Waiting for media...").length).toBe(0);
-    });
-    it("shows avatar and label for remote user", () => {
-      render(
-        <MediaView {...baseProps} video={undefined} localParticipant={false} />,
-      );
-      expect(
-        screen.getByRole("img", { name: "@alice:example.com" }),
-      ).toBeVisible();
-      expect(screen.getByText("Waiting for media...")).toBeVisible();
+      expect(screen.queryByTestId("video")).toBe(null);
     });
   });
 
@@ -94,6 +82,22 @@ describe("MediaView", () => {
     });
   });
 
+  describe("waitingForMedia", () => {
+    test("defaults to false", () => {
+      render(<MediaView {...baseProps} />);
+      expect(screen.queryAllByText("Waiting for media...").length).toBe(0);
+    });
+    test("shows and is accessible", async () => {
+      const { container } = render(
+        <TooltipProvider>
+          <MediaView {...baseProps} waitingForMedia={true} />
+        </TooltipProvider>,
+      );
+      expect(await axe(container)).toHaveNoViolations();
+      expect(screen.getByText("Waiting for media...")).toBeVisible();
+    });
+  });
+
   describe("unencryptedWarning", () => {
     test("is shown and accessible", async () => {
       const { container } = render(
diff --git a/src/tile/MediaView.tsx b/src/tile/MediaView.tsx
index e8a30cd4..8bb38d94 100644
--- a/src/tile/MediaView.tsx
+++ b/src/tile/MediaView.tsx
@@ -43,7 +43,7 @@ interface Props extends ComponentProps<typeof animated.div> {
   raisedHandTime?: Date;
   currentReaction?: ReactionOption;
   raisedHandOnClick?: () => void;
-  localParticipant: boolean;
+  waitingForMedia?: boolean;
   audioStreamStats?: RTCInboundRtpStreamStats | RTCOutboundRtpStreamStats;
   videoStreamStats?: RTCInboundRtpStreamStats | RTCOutboundRtpStreamStats;
   // The focus url, mainly for debugging purposes
@@ -71,7 +71,7 @@ export const MediaView: FC<Props> = ({
   raisedHandTime,
   currentReaction,
   raisedHandOnClick,
-  localParticipant,
+  waitingForMedia,
   audioStreamStats,
   videoStreamStats,
   focusUrl,
@@ -129,7 +129,7 @@ export const MediaView: FC<Props> = ({
             />
           )}
         </div>
-        {!video && !localParticipant && (
+        {waitingForMedia && (
           <div className={styles.status}>
             {t("video_tile.waiting_for_media")}
           </div>
diff --git a/src/tile/SpotlightTile.test.tsx b/src/tile/SpotlightTile.test.tsx
index fb7008b8..981c0369 100644
--- a/src/tile/SpotlightTile.test.tsx
+++ b/src/tile/SpotlightTile.test.tsx
@@ -17,6 +17,7 @@ import {
   mockRtcMembership,
   createLocalMedia,
   createRemoteMedia,
+  mockRemoteParticipant,
 } from "../utils/test";
 import { SpotlightTileViewModel } from "../state/TileViewModel";
 import { constant } from "../state/Behavior";
@@ -33,7 +34,7 @@ test("SpotlightTile is accessible", async () => {
       rawDisplayName: "Alice",
       getMxcAvatarUrl: () => "mxc://adfsg",
     },
-    {},
+    mockRemoteParticipant({}),
   );
 
   const vm2 = createLocalMedia(
diff --git a/src/tile/SpotlightTile.tsx b/src/tile/SpotlightTile.tsx
index 48dd0f8c..8109784f 100644
--- a/src/tile/SpotlightTile.tsx
+++ b/src/tile/SpotlightTile.tsx
@@ -38,6 +38,7 @@ import {
   type MediaViewModel,
   ScreenShareViewModel,
   type UserMediaViewModel,
+  type RemoteUserMediaViewModel,
 } from "../state/MediaViewModel";
 import { useInitial } from "../useInitial";
 import { useMergedRefs } from "../useMergedRefs";
@@ -84,6 +85,21 @@ const SpotlightLocalUserMediaItem: FC<SpotlightLocalUserMediaItemProps> = ({
 
 SpotlightLocalUserMediaItem.displayName = "SpotlightLocalUserMediaItem";
 
+interface SpotlightRemoteUserMediaItemProps
+  extends SpotlightUserMediaItemBaseProps {
+  vm: RemoteUserMediaViewModel;
+}
+
+const SpotlightRemoteUserMediaItem: FC<SpotlightRemoteUserMediaItemProps> = ({
+  vm,
+  ...props
+}) => {
+  const waitingForMedia = useBehavior(vm.waitingForMedia$);
+  return (
+    <MediaView waitingForMedia={waitingForMedia} mirror={false} {...props} />
+  );
+};
+
 interface SpotlightUserMediaItemProps extends SpotlightItemBaseProps {
   vm: UserMediaViewModel;
 }
@@ -103,7 +119,7 @@ const SpotlightUserMediaItem: FC<SpotlightUserMediaItemProps> = ({
   return vm instanceof LocalUserMediaViewModel ? (
     <SpotlightLocalUserMediaItem vm={vm} {...baseProps} />
   ) : (
-    <MediaView mirror={false} {...baseProps} />
+    <SpotlightRemoteUserMediaItem vm={vm} {...baseProps} />
   );
 };
 
diff --git a/src/utils/observable.test.ts b/src/utils/observable.test.ts
index d1034e7b..be677367 100644
--- a/src/utils/observable.test.ts
+++ b/src/utils/observable.test.ts
@@ -5,11 +5,12 @@ SPDX-License-Identifier: AGPL-3.0-only OR LicenseRef-Element-Commercial
 Please see LICENSE in the repository root for full details.
 */
 
-import { test } from "vitest";
-import { Subject } from "rxjs";
+import { expect, test } from "vitest";
+import { type Observable, of, Subject, switchMap } from "rxjs";
 
 import { withTestScheduler } from "./test";
-import { generateItems, pauseWhen } from "./observable";
+import { filterBehavior, generateItems, pauseWhen } from "./observable";
+import { type Behavior } from "../state/Behavior";
 
 test("pauseWhen", () => {
   withTestScheduler(({ behavior, expectObservable }) => {
@@ -72,3 +73,31 @@ test("generateItems", () => {
     expectObservable(scope4$).toBe(scope4Marbles);
   });
 });
+
+test("filterBehavior", () => {
+  withTestScheduler(({ behavior, expectObservable }) => {
+    // Filtering the input should segment it into 2 modes of non-null behavior.
+    const inputMarbles = "   abcxabx";
+    const filteredMarbles = "a--xa-x";
+
+    const input$ = behavior(inputMarbles, {
+      a: "a",
+      b: "b",
+      c: "c",
+      x: null,
+    });
+    const filtered$: Observable<Behavior<string> | null> = input$.pipe(
+      filterBehavior((value) => typeof value === "string"),
+    );
+
+    expectObservable(filtered$).toBe(filteredMarbles, {
+      a: expect.any(Object),
+      x: null,
+    });
+    expectObservable(
+      filtered$.pipe(
+        switchMap((value$) => (value$ === null ? of(null) : value$)),
+      ),
+    ).toBe(inputMarbles, { a: "a", b: "b", c: "c", x: null });
+  });
+});
diff --git a/src/utils/observable.ts b/src/utils/observable.ts
index 053921cd..a6dafea3 100644
--- a/src/utils/observable.ts
+++ b/src/utils/observable.ts
@@ -22,6 +22,7 @@ import {
   withLatestFrom,
   BehaviorSubject,
   type OperatorFunction,
+  distinctUntilChanged,
 } from "rxjs";
 
 import { type Behavior } from "../state/Behavior";
@@ -185,6 +186,28 @@ export function generateItemsWithEpoch<
   );
 }
 
+/**
+ * Segments a behavior into periods during which its value matches the filter
+ * (outputting a behavior with a narrowed type) and periods during which it does
+ * not match (outputting null).
+ */
+export function filterBehavior<T, S extends T>(
+  predicate: (value: T) => value is S,
+): OperatorFunction<T, Behavior<S> | null> {
+  return (input$) =>
+    input$.pipe(
+      scan<T, BehaviorSubject<S> | null>((acc$, input) => {
+        if (predicate(input)) {
+          const output$ = acc$ ?? new BehaviorSubject(input);
+          output$.next(input);
+          return output$;
+        }
+        return null;
+      }, null),
+      distinctUntilChanged(),
+    );
+}
+
 function generateItemsInternal<
   Input,
   Keys extends [unknown, ...unknown[]],
diff --git a/src/utils/test-viewmodel.ts b/src/utils/test-viewmodel.ts
index 98c45d86..0745be72 100644
--- a/src/utils/test-viewmodel.ts
+++ b/src/utils/test-viewmodel.ts
@@ -37,6 +37,7 @@ import {
 import { aliceRtcMember, localRtcMember } from "./test-fixtures";
 import { type RaisedHandInfo, type ReactionInfo } from "../reactions";
 import { constant } from "../state/Behavior";
+import { MatrixRTCMode } from "../settings/settings";
 
 mockConfig({ livekit: { livekit_service_url: "https://example.com" } });
 
@@ -162,6 +163,7 @@ export function getBasicCallViewModelEnvironment(
           setE2EEEnabled: async () => Promise.resolve(),
         }),
       connectionState$: constant(ConnectionState.Connected),
+      matrixRTCMode$: constant(MatrixRTCMode.Legacy),
       ...callViewModelOptions,
     },
     handRaisedSubject$,
diff --git a/src/utils/test.ts b/src/utils/test.ts
index 28fc8546..7d251640 100644
--- a/src/utils/test.ts
+++ b/src/utils/test.ts
@@ -321,12 +321,12 @@ export function mockLocalParticipant(
 }
 
 export function createLocalMedia(
-  localRtcMember: CallMembership,
+  rtcMember: CallMembership,
   roomMember: Partial<RoomMember>,
   localParticipant: LocalParticipant,
   mediaDevices: MediaDevices,
 ): LocalUserMediaViewModel {
-  const member = mockMatrixRoomMember(localRtcMember, roomMember);
+  const member = mockMatrixRoomMember(rtcMember, roomMember);
   return new LocalUserMediaViewModel(
     testScope(),
     "local",
@@ -361,23 +361,26 @@ export function mockRemoteParticipant(
 }
 
 export function createRemoteMedia(
-  localRtcMember: CallMembership,
+  rtcMember: CallMembership,
   roomMember: Partial<RoomMember>,
-  participant: Partial<RemoteParticipant>,
+  participant: RemoteParticipant | null,
+  livekitRoom: LivekitRoom | undefined = mockLivekitRoom(
+    {},
+    {
+      remoteParticipants$: of(participant ? [participant] : []),
+    },
+  ),
 ): RemoteUserMediaViewModel {
-  const member = mockMatrixRoomMember(localRtcMember, roomMember);
-  const remoteParticipant = mockRemoteParticipant(participant);
+  const member = mockMatrixRoomMember(rtcMember, roomMember);
   return new RemoteUserMediaViewModel(
     testScope(),
     "remote",
     member.userId,
-    of(remoteParticipant),
+    constant(participant),
     {
       kind: E2eeType.PER_PARTICIPANT,
     },
-    constant(
-      mockLivekitRoom({}, { remoteParticipants$: of([remoteParticipant]) }),
-    ),
+    constant(livekitRoom),
     constant("https://rtc-example.org"),
     constant(false),
     constant(member.rawDisplayName ?? "nodisplayname"),