diff --git a/builtin/fsmonitor--daemon.c b/builtin/fsmonitor--daemon.c
index 110fe5fb55..be8f3fee1a 100644
--- a/builtin/fsmonitor--daemon.c
+++ b/builtin/fsmonitor--daemon.c
@@ -86,6 +86,8 @@ static int do_as_client__send_stop(void)
 {
 	struct strbuf answer = STRBUF_INIT;
 	int ret;
+	int max_wait_ms = 30000;
+	int elapsed_ms = 0;
 
 	ret = fsmonitor_ipc__send_command("quit", &answer);
 
@@ -96,8 +98,16 @@ static int do_as_client__send_stop(void)
 		return ret;
 
 	trace2_region_enter("fsm_client", "polling-for-daemon-exit", NULL);
-	while (fsmonitor_ipc__get_state() == IPC_STATE__LISTENING)
+	while (fsmonitor_ipc__get_state() == IPC_STATE__LISTENING) {
+		if (elapsed_ms >= max_wait_ms) {
+			trace2_region_leave("fsm_client",
+					    "polling-for-daemon-exit", NULL);
+			return error(_("daemon did not stop within %d seconds"),
+				     max_wait_ms / 1000);
+		}
 		sleep_millisec(50);
+		elapsed_ms += 50;
+	}
 	trace2_region_leave("fsm_client", "polling-for-daemon-exit", NULL);
 
 	return 0;
@@ -1431,7 +1441,7 @@ done:
 	return err;
 }
 
-static int try_to_run_foreground_daemon(int detach_console MAYBE_UNUSED)
+static int try_to_run_foreground_daemon(int detach_console)
 {
 	/*
 	 * Technically, we don't need to probe for an existing daemon
@@ -1451,10 +1461,21 @@ static int try_to_run_foreground_daemon(int detach_console MAYBE_UNUSED)
 		fflush(stderr);
 	}
 
+	if (detach_console) {
 #ifdef GIT_WINDOWS_NATIVE
-	if (detach_console)
 		FreeConsole();
+#else
+		/*
+		 * Create a new session so that the daemon is detached
+		 * from the parent's process group.  This prevents
+		 * shells with job control (e.g. bash with "set -m")
+		 * from waiting on the daemon when they wait for a
+		 * foreground command that implicitly spawned it.
+		 */
+		if (setsid() == -1)
+			warning_errno(_("setsid failed"));
 #endif
+	}
 
 	return !!fsmonitor_run_daemon();
 }
@@ -1517,6 +1538,7 @@ static int try_to_start_background_daemon(void)
 	cp.no_stdin = 1;
 	cp.no_stdout = 1;
 	cp.no_stderr = 1;
+	cp.close_fd_above_stderr = 1;
 
 	sbgr = start_bg_command(&cp, bg_wait_cb, NULL,
 				fsmonitor__start_timeout_sec);
diff --git a/fsmonitor-ipc.c b/fsmonitor-ipc.c
index f1b1631111..6112d13064 100644
--- a/fsmonitor-ipc.c
+++ b/fsmonitor-ipc.c
@@ -61,6 +61,9 @@ static int spawn_daemon(void)
 
 	cmd.git_cmd = 1;
 	cmd.no_stdin = 1;
+	cmd.no_stdout = 1;
+	cmd.no_stderr = 1;
+	cmd.close_fd_above_stderr = 1;
 	cmd.trace2_child_class = "fsmonitor";
 	strvec_pushl(&cmd.args, "fsmonitor--daemon", "start", NULL);
 
diff --git a/t/meson.build b/t/meson.build
index bfd2f7f5a6..459c52a489 100644
--- a/t/meson.build
+++ b/t/meson.build
@@ -1208,18 +1208,12 @@ test_environment = script_environment
 test_environment.set('GIT_BUILD_DIR', git_build_dir)
 
 foreach integration_test : integration_tests
-  per_test_kwargs = test_kwargs
-  # The fsmonitor tests start daemon processes that in some environments
-  # can hang.  Set a generous timeout to prevent CI from blocking.
-  if fs.stem(integration_test) == 't7527-builtin-fsmonitor'
-    per_test_kwargs += {'timeout': 1800}
-  endif
   test(fs.stem(integration_test), shell,
     args: [ integration_test ],
     workdir: meson.current_source_dir(),
     env: test_environment,
     depends: test_dependencies + bin_wrappers,
-    kwargs: per_test_kwargs,
+    kwargs: test_kwargs,
   )
 endforeach
 
diff --git a/t/t7527-builtin-fsmonitor.sh b/t/t7527-builtin-fsmonitor.sh
index 774da5ac60..d7e64bcb7a 100755
--- a/t/t7527-builtin-fsmonitor.sh
+++ b/t/t7527-builtin-fsmonitor.sh
@@ -766,7 +766,7 @@ do
 		else
 			test_expect_success "Matrix[uc:$uc_val][fsm:$fsm_val] enable fsmonitor" '
 				git config core.fsmonitor true &&
-				git fsmonitor--daemon start &&
+				git fsmonitor--daemon start --start-timeout=10 &&
 				git update-index --fsmonitor
 			'
 		fi
@@ -997,7 +997,17 @@ start_git_in_background () {
 		nr_tries_left=$(($nr_tries_left - 1))
 	done >/dev/null 2>&1 3>&- 4>&- 5>&- 6>&- 7>&- &
 	watchdog_pid=$!
+
+	# Disable job control before wait.  With "set -m", bash treats
+	# "wait $pid" as waiting for the entire job (process group),
+	# which blocks indefinitely if the fsmonitor daemon was spawned
+	# into the same process group and is still running.  Turning off
+	# job control makes "wait" only wait for the specific PID.
+	set +m &&
 	wait $git_pid
+	wait_status=$?
+	set -m
+	return $wait_status
 }
 
 stop_git () {