diff --git a/packages/block-editor/src/components/inserter/test/fixtures/index.js b/packages/block-editor/src/components/inserter/test/fixtures/index.js
index 5d87650bbb077..c46620ec156dc 100644
--- a/packages/block-editor/src/components/inserter/test/fixtures/index.js
+++ b/packages/block-editor/src/components/inserter/test/fixtures/index.js
@@ -40,6 +40,21 @@ export const withSingleVariationItem = {
 	],
 };
 
+export const withDefaultVariationItem = {
+	id: 'core/block-with-default-variation',
+	name: 'core/block-with-default-variation',
+	description: 'core description',
+	initialAttributes: {},
+	category: 'text',
+	variations: [
+		{
+			name: 'special',
+			title: 'Special',
+			isDefault: true,
+		},
+	],
+};
+
 export const withVariationsItem = {
 	id: 'core/block-with-variations',
 	name: 'core/block-with-variations',
diff --git a/packages/block-editor/src/components/inserter/test/utils.js b/packages/block-editor/src/components/inserter/test/utils.js
index e86bf4afbb105..d09376f55f6b5 100644
--- a/packages/block-editor/src/components/inserter/test/utils.js
+++ b/packages/block-editor/src/components/inserter/test/utils.js
@@ -7,11 +7,33 @@ import {
 	someOtherItem,
 	withVariationsItem,
 	withSingleVariationItem,
+	withDefaultVariationItem,
 } from './fixtures';
 import { includeVariationsInInserterItems } from '../utils';
 
 describe( 'inserter utils', () => {
 	describe( 'includeVariationsInInserterItems', () => {
+		it( 'should let a block type be replaced with the default variation', () => {
+			// The base block type is replaced with the default variation
+			expect(
+				includeVariationsInInserterItems( [ withDefaultVariationItem ] )
+			).toEqual( [
+				expect.objectContaining( {
+					id: 'core/block-with-default-variation-special',
+				} ),
+			] );
+			// The base block type is supplemented by non-default variations
+			expect(
+				includeVariationsInInserterItems( [ withSingleVariationItem ] )
+			).toEqual( [
+				expect.objectContaining( {
+					id: 'core/embed',
+				} ),
+				expect.objectContaining( {
+					id: 'core/embed-youtube',
+				} ),
+			] );
+		} );
 		it( 'should return items if limit is equal to items length', () => {
 			const items = [ moreItem, paragraphItem, someOtherItem ];
 			const res = includeVariationsInInserterItems( items, 3 );
@@ -27,6 +49,28 @@ describe( 'inserter utils', () => {
 			const res = includeVariationsInInserterItems( items, 2 );
 			expect( res ).toEqual( [ moreItem, paragraphItem ] );
 		} );
+		it( 'should fill the items with variations, if limit is set and items are fewer than limit and variations exist', () => {
+			const items = [ moreItem, paragraphItem, withVariationsItem ];
+			const res = includeVariationsInInserterItems( items, 5 );
+			expect( res.length ).toEqual( 5 );
+			expect( res ).toEqual( [
+				...items,
+				expect.objectContaining( {
+					id: 'core/block-with-variations-variation-one',
+					title: 'Variation One',
+				} ),
+				expect.objectContaining( {
+					id: 'core/block-with-variations-variation-two',
+					title: 'Variation Two',
+				} ),
+			] );
+		} );
+		it( 'should return the items, if limit is set and items are fewer than limit and variations do NOT exist', () => {
+			const items = [ moreItem, paragraphItem, someOtherItem ];
+			const res = includeVariationsInInserterItems( items, 4 );
+			expect( res.length ).toEqual( 3 );
+			expect( res ).toEqual( items );
+		} );
 		it( 'should return proper result if no limit provided and block variations do NOT exist', () => {
 			const items = [ moreItem, paragraphItem, someOtherItem ];
 			const res = includeVariationsInInserterItems( items );
diff --git a/packages/block-editor/src/components/inserter/utils.js b/packages/block-editor/src/components/inserter/utils.js
index a30d8a712718b..08f3ca03ae8f2 100644
--- a/packages/block-editor/src/components/inserter/utils.js
+++ b/packages/block-editor/src/components/inserter/utils.js
@@ -29,28 +29,30 @@ const getItemFromVariation = ( item ) => ( variation ) => ( {
  * @return {Array} Normalized inserter items.
  */
 export function includeVariationsInInserterItems( items, limit = Infinity ) {
-	if ( items.length >= limit ) {
-		// No need to iterate for variations
-		return items.slice( 0, limit );
-	}
-	// Show all available blocks with variations
-	return items.reduce( ( result, item ) => {
-		const { variations = [] } = item;
-		const hasDefaultVariation = variations.some(
-			( { isDefault } ) => isDefault
-		);
+	// Exclude any block type item that is to be replaced by a default
+	// variation.
+	const filteredItems = items.filter(
+		( { variations = [] } ) =>
+			! variations.some( ( { isDefault } ) => isDefault )
+	);
 
-		// If there is no default inserter variation provided,
-		// then default block type is displayed.
-		if ( ! hasDefaultVariation ) {
-			result.push( item );
-		}
+	// Fill `variationsToAdd` until there are as many items in total as
+	// `limit`.
+	const variationsToAdd = [];
+	if ( filteredItems.length < limit ) {
+		// Show all available blocks with variations
+		for ( const item of items ) {
+			if ( filteredItems.length + variationsToAdd.length >= limit ) {
+				break;
+			}
 
-		if ( variations.length ) {
-			const variationMapper = getItemFromVariation( item );
-			result.push( ...variations.map( variationMapper ) );
+			const { variations = [] } = item;
+			if ( variations.length ) {
+				const variationMapper = getItemFromVariation( item );
+				variationsToAdd.push( ...variations.map( variationMapper ) );
+			}
 		}
+	}
 
-		return result;
-	}, [] );
+	return [ ...filteredItems, ...variationsToAdd ].slice( 0, limit );
 }