diff --git a/homeassistant/components/mqtt/device_tracker.py b/homeassistant/components/mqtt/device_tracker.py
index 141e0478f2f..4bb23a9fa7e 100644
--- a/homeassistant/components/mqtt/device_tracker.py
+++ b/homeassistant/components/mqtt/device_tracker.py
@@ -163,8 +163,6 @@ class MqttDeviceTracker(MqttEntity, TrackerEntity):
             latitude: float | None
             longitude: float | None
             gps_accuracy: float
-            # Reset manually set location to allow automatic zone detection
-            self._attr_location_name = None
             if isinstance(
                 latitude := extra_state_attributes.get(ATTR_LATITUDE), (int, float)
             ) and isinstance(
diff --git a/tests/components/mqtt/test_device_tracker.py b/tests/components/mqtt/test_device_tracker.py
index eda54d8efee..45fc7fa27c2 100644
--- a/tests/components/mqtt/test_device_tracker.py
+++ b/tests/components/mqtt/test_device_tracker.py
@@ -644,6 +644,31 @@ async def test_setting_device_tracker_location_via_abbr_reset_message(
     assert state.attributes["source_type"] == "gps"
     assert state.state == STATE_HOME
 
+    # Override the GPS state via a direct state update
+    async_fire_mqtt_message(hass, "test-topic", "office")
+    state = hass.states.get("device_tracker.test")
+    assert state.state == "office"
+
+    # Test a GPS attributes update without a reset
+    async_fire_mqtt_message(
+        hass,
+        "attributes-topic",
+        '{"latitude":32.87336,"longitude": -117.22743, "gps_accuracy":1.5}',
+    )
+
+    state = hass.states.get("device_tracker.test")
+    assert state.state == "office"
+
+    # Reset the manual set location
+    # This should calculate the location from GPS attributes
+    async_fire_mqtt_message(hass, "test-topic", "reset")
+    state = hass.states.get("device_tracker.test")
+    assert state.attributes["latitude"] == 32.87336
+    assert state.attributes["longitude"] == -117.22743
+    assert state.attributes["gps_accuracy"] == 1.5
+    assert state.attributes["source_type"] == "gps"
+    assert state.state == STATE_HOME
+
 
 async def test_setting_blocked_attribute_via_mqtt_json_message(
     hass: HomeAssistant, mqtt_mock_entry: MqttMockHAClientGenerator