diff --git a/impl/maven-impl/src/main/java/org/apache/maven/impl/DefaultSettingsBuilder.java b/impl/maven-impl/src/main/java/org/apache/maven/impl/DefaultSettingsBuilder.java
index 76695f4b1f53..be7dd9e86312 100644
--- a/impl/maven-impl/src/main/java/org/apache/maven/impl/DefaultSettingsBuilder.java
+++ b/impl/maven-impl/src/main/java/org/apache/maven/impl/DefaultSettingsBuilder.java
@@ -268,6 +268,22 @@ private Settings decrypt(
         UnaryOperator<String> decryptFunction = str -> {
             if (str != null && !str.isEmpty() && !str.contains("${") && secDispatcher.isAnyEncryptedString(str)) {
                 if (secDispatcher.isLegacyEncryptedString(str)) {
+                    // the call above return true for too broad types of strings, original idea with 2.x sec-dispatcher
+                    // was to make it possible to add "descriptions" to encrypted passwords. Maven 4 is
+                    // limiting itself to decryption of ONLY the simplest cases of legacy passwords, those having form
+                    // as documented on page: https://maven.apache.org/guides/mini/guide-encryption.html
+                    // Examples of decrypted legacy passwords:
+                    // <password>{COQLCE6DU6GtcS5P=}</password>
+                    // <password>Oleg reset this password on 2009-03-11 {COQLCE6DU6GtcS5P=}</password>
+
+                    // In short, secDispatcher#isLegacyEncryptedString(str) did return true, but we apply more scrutiny
+                    // and check does string start with "{" or contains " {" (whitespace before opening curly braces),
+                    // and that it ends with "}" strictly. Otherwise, we refuse it.
+                    if ((!str.startsWith("{") && !str.contains(" {")) || !str.endsWith("}")) {
+                        // this is not a legacy password we care for
+                        return str;
+                    }
+
                     // add a problem
                     preMaven4Passwords.incrementAndGet();
                 }
diff --git a/its/core-it-suite/src/test/java/org/apache/maven/it/MavenITgh10210SettingsXmlDecryptTest.java b/its/core-it-suite/src/test/java/org/apache/maven/it/MavenITgh10210SettingsXmlDecryptTest.java
new file mode 100644
index 000000000000..8742ff9388b6
--- /dev/null
+++ b/its/core-it-suite/src/test/java/org/apache/maven/it/MavenITgh10210SettingsXmlDecryptTest.java
@@ -0,0 +1,78 @@
+/*
+ * Licensed to the Apache Software Foundation (ASF) under one
+ * or more contributor license agreements.  See the NOTICE file
+ * distributed with this work for additional information
+ * regarding copyright ownership.  The ASF licenses this file
+ * to you under the Apache License, Version 2.0 (the
+ * "License"); you may not use this file except in compliance
+ * with the License.  You may obtain a copy of the License at
+ *
+ *   http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing,
+ * software distributed under the License is distributed on an
+ * "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+ * KIND, either express or implied.  See the License for the
+ * specific language governing permissions and limitations
+ * under the License.
+ */
+package org.apache.maven.it;
+
+import java.io.File;
+import java.nio.file.Files;
+import java.util.Arrays;
+
+import org.junit.Assert;
+import org.junit.jupiter.api.Test;
+
+/**
+ * This is a test set for <a href="https://github.com/apache/maven/issues/10210">GH-10210</a>.
+ */
+class MavenITgh10210SettingsXmlDecryptTest extends AbstractMavenIntegrationTestCase {
+
+    MavenITgh10210SettingsXmlDecryptTest() {
+        super("(4.0.0-rc4,)"); // fixed post 4.0.0-rc-4
+    }
+
+    @Test
+    void testItPass() throws Exception {
+        File testDir = extractResources("/gh-10210-settings-xml-decrypt");
+
+        Verifier verifier = new Verifier(testDir.getAbsolutePath());
+        verifier.setUserHomeDirectory(testDir.toPath().resolve("HOME"));
+        verifier.addCliArgument("-s");
+        verifier.addCliArgument("settings-passes.xml");
+        verifier.addCliArgument("process-resources");
+        verifier.execute();
+
+        Assert.assertEquals(
+                Arrays.asList(
+                        "prop1=%{foo}.txt",
+                        "prop2=${foo}.txt",
+                        "prop3=whatever {foo}.txt",
+                        "prop4=whatever",
+                        "prop5=Hello Oleg {L6L/HbmrY+cH+sNkphnq3fguYepTpM04WlIXb8nB1pk=} is this a password?",
+                        "prop6=password",
+                        "prop7=password"),
+                Files.readAllLines(testDir.toPath().resolve("target/classes/file.properties")));
+    }
+
+    @Test
+    void testItFail() throws Exception {
+        File testDir = extractResources("/gh-10210-settings-xml-decrypt");
+
+        Verifier verifier = new Verifier(testDir.getAbsolutePath());
+        verifier.setUserHomeDirectory(testDir.toPath().resolve("HOME"));
+        verifier.addCliArgument("-s");
+        verifier.addCliArgument("settings-fails.xml");
+        verifier.addCliArgument("process-resources");
+        try {
+            verifier.execute();
+        } catch (VerificationException e) {
+            Assert.assertTrue(
+                    verifier.loadLogContent()
+                            .contains(
+                                    "Could not decrypt password (fix the corrupted password or remove it, if unused) {L6L/HbmrY+cH+sNkphn-this password is corrupted intentionally-q3fguYepTpM04WlIXb8nB1pk=}"));
+        }
+    }
+}
diff --git a/its/core-it-suite/src/test/java/org/apache/maven/it/TestSuiteOrdering.java b/its/core-it-suite/src/test/java/org/apache/maven/it/TestSuiteOrdering.java
index cc0ee65b997e..207595094a1b 100644
--- a/its/core-it-suite/src/test/java/org/apache/maven/it/TestSuiteOrdering.java
+++ b/its/core-it-suite/src/test/java/org/apache/maven/it/TestSuiteOrdering.java
@@ -105,6 +105,7 @@ public TestSuiteOrdering() {
          */
         suite.addTestSuite(MavenITgh11055DIServiceInjectionTest.class);
         suite.addTestSuite(MavenITgh11084ReactorReaderPreferConsumerPomTest.class);
+        suite.addTestSuite(MavenITgh10210SettingsXmlDecryptTest.class);
         suite.addTestSuite(MavenITgh10312TerminallyDeprecatedMethodInGuiceTest.class);
         suite.addTestSuite(MavenITgh10937QuotedPipesInMavenOptsTest.class);
         suite.addTestSuite(MavenITgh2532DuplicateDependencyEffectiveModelTest.class);
diff --git a/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/HOME/.m2/settings-security.xml b/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/HOME/.m2/settings-security.xml
new file mode 100644
index 000000000000..f88e932cf871
--- /dev/null
+++ b/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/HOME/.m2/settings-security.xml
@@ -0,0 +1,3 @@
+<settingsSecurity>
+  <master>{KDvsYOFLlXgH4LU8tvpzAGg5otiosZXvfdQq0yO86LU=}</master>
+</settingsSecurity>
\ No newline at end of file
diff --git a/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/pom.xml b/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/pom.xml
new file mode 100644
index 000000000000..d6c72b24a42c
--- /dev/null
+++ b/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/pom.xml
@@ -0,0 +1,40 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<!--
+Licensed to the Apache Software Foundation (ASF) under one
+or more contributor license agreements.  See the NOTICE file
+distributed with this work for additional information
+regarding copyright ownership.  The ASF licenses this file
+to you under the Apache License, Version 2.0 (the
+"License"); you may not use this file except in compliance
+with the License.  You may obtain a copy of the License at
+
+  http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing,
+software distributed under the License is distributed on an
+"AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+KIND, either express or implied.  See the License for the
+specific language governing permissions and limitations
+under the License.
+-->
+<project xmlns="http://maven.apache.org/POM/4.0.0">
+  <modelVersion>4.0.0</modelVersion>
+
+  <groupId>org.apache.maven.its.gh-10210</groupId>
+  <artifactId>test</artifactId>
+  <version>1.0</version>
+  <packaging>jar</packaging>
+
+  <name>Maven Integration Test :: gh-10210</name>
+  <description>Empty POM, as settings.xml decrypt failure will fail the build anyway.</description>
+
+  <build>
+    <resources>
+      <resource>
+        <filtering>true</filtering>
+        <directory>src/main/resources</directory>
+      </resource>
+    </resources>
+  </build>
+
+</project>
diff --git a/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/settings-fails.xml b/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/settings-fails.xml
new file mode 100644
index 000000000000..dd3f44f0e904
--- /dev/null
+++ b/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/settings-fails.xml
@@ -0,0 +1,42 @@
+<?xml version="1.0" encoding="UTF-8"?>
+
+<!--
+Licensed to the Apache Software Foundation (ASF) under one
+or more contributor license agreements.  See the NOTICE file
+distributed with this work for additional information
+regarding copyright ownership.  The ASF licenses this file
+to you under the Apache License, Version 2.0 (the
+"License"); you may not use this file except in compliance
+with the License.  You may obtain a copy of the License at
+
+  http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing,
+software distributed under the License is distributed on an
+"AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+KIND, either express or implied.  See the License for the
+specific language governing permissions and limitations
+under the License.
+-->
+
+<settings xmlns='http://maven.apache.org/SETTINGS/1.2.0'>
+  <profiles>
+    <profile>
+      <id>just-some-random-profile</id>
+      <properties>
+        <!-- These are all not legacy passwords -->
+        <prop1>%{foo}.txt</prop1>
+        <prop2>${foo}.txt</prop2>
+        <prop3>whatever {foo}.txt</prop3>
+        <prop4>whatever</prop4>
+        <prop5>Hello Oleg {L6L/HbmrY+cH+sNkphnq3fguYepTpM04WlIXb8nB1pk=} is this a password?</prop5>
+        <!-- Legacy passwords -->
+        <prop6>{L6L/HbmrY+cH+sNkphn-this password is corrupted intentionally-q3fguYepTpM04WlIXb8nB1pk=}</prop6>
+        <prop7>Hello Oleg {L6L/HbmrY+cH+sNkphnq3fguYepTpM04WlIXb8nB1pk=}</prop7>
+      </properties>
+    </profile>
+  </profiles>
+  <activeProfiles>
+    <activeProfile>just-some-random-profile</activeProfile>
+  </activeProfiles>
+</settings>
diff --git a/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/settings-passes.xml b/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/settings-passes.xml
new file mode 100644
index 000000000000..dcfb8e5c5129
--- /dev/null
+++ b/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/settings-passes.xml
@@ -0,0 +1,42 @@
+<?xml version="1.0" encoding="UTF-8"?>
+
+<!--
+Licensed to the Apache Software Foundation (ASF) under one
+or more contributor license agreements.  See the NOTICE file
+distributed with this work for additional information
+regarding copyright ownership.  The ASF licenses this file
+to you under the Apache License, Version 2.0 (the
+"License"); you may not use this file except in compliance
+with the License.  You may obtain a copy of the License at
+
+  http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing,
+software distributed under the License is distributed on an
+"AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+KIND, either express or implied.  See the License for the
+specific language governing permissions and limitations
+under the License.
+-->
+
+<settings xmlns='http://maven.apache.org/SETTINGS/1.2.0'>
+  <profiles>
+    <profile>
+      <id>just-some-random-profile</id>
+      <properties>
+        <!-- These are all not legacy passwords -->
+        <prop1>%{foo}.txt</prop1>
+        <prop2>${foo}.txt</prop2>
+        <prop3>whatever {foo}.txt</prop3>
+        <prop4>whatever</prop4>
+        <prop5>Hello Oleg {L6L/HbmrY+cH+sNkphnq3fguYepTpM04WlIXb8nB1pk=} is this a password?</prop5>
+        <!-- Legacy passwords -->
+        <prop6>{L6L/HbmrY+cH+sNkphnq3fguYepTpM04WlIXb8nB1pk=}</prop6>
+        <prop7>Hello Oleg {L6L/HbmrY+cH+sNkphnq3fguYepTpM04WlIXb8nB1pk=}</prop7>
+      </properties>
+    </profile>
+  </profiles>
+  <activeProfiles>
+    <activeProfile>just-some-random-profile</activeProfile>
+  </activeProfiles>
+</settings>
diff --git a/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/src/main/resources/file.properties b/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/src/main/resources/file.properties
new file mode 100644
index 000000000000..0ccd6e3c49c9
--- /dev/null
+++ b/its/core-it-suite/src/test/resources/gh-10210-settings-xml-decrypt/src/main/resources/file.properties
@@ -0,0 +1,7 @@
+prop1=${prop1}
+prop2=${prop2}
+prop3=${prop3}
+prop4=${prop4}
+prop5=${prop5}
+prop6=${prop6}
+prop7=${prop7}