diff --git a/plugin/core/collections.py b/plugin/core/collections.py
index 881b6498d..98a57b56d 100644
--- a/plugin/core/collections.py
+++ b/plugin/core/collections.py
@@ -135,13 +135,10 @@ def update(self, d: Dict[str, Any]) -> None:
         """
         Overwrite and/or add new key-value pairs to the collection.
 
-        :param      d:    The overriding dictionary. Can contain nested dictionaries.
+        :param      d:    The overriding dictionary. Keys must be in the new-style dotted format.
         """
         for key, value in d.items():
-            if isinstance(value, dict):
-                self._update_recursive(value, key)
-            else:
-                self.set(key, value)
+            self.set(key, value)
 
     def get_resolved(self, variables: Dict[str, str]) -> Dict[str, Any]:
         """
@@ -153,16 +150,6 @@ def get_resolved(self, variables: Dict[str, str]) -> Dict[str, Any]:
         """
         return sublime.expand_variables(self._d, variables)
 
-    def _update_recursive(self, current: Dict[str, Any], prefix: str) -> None:
-        if not current:
-            return self.set(prefix, current)
-        for key, value in current.items():
-            path = "{}.{}".format(prefix, key)
-            if isinstance(value, dict):
-                self._update_recursive(value, path)
-            else:
-                self.set(path, value)
-
     def __repr__(self) -> str:
         return "{}({})".format(self.__class__.__name__, repr(self._d))
 
diff --git a/tests/test_collections.py b/tests/test_collections.py
index 3750d7a5c..e0d4f4ecc 100644
--- a/tests/test_collections.py
+++ b/tests/test_collections.py
@@ -74,12 +74,8 @@ def test_update(self) -> None:
         d.set("foo.bar.c", "c")
         self.verify(d, "foo.bar", {"a": "a", "b": "b", "c": "c"})
         d.update({
-            "foo": {
-                "bar": {
-                    "a": "x",
-                    "b": "y"
-                }
-            }
+            "foo.bar.a": "x",
+            "foo.bar.b": "y"
         })
         self.verify(d, "foo.bar", {"a": "x", "b": "y", "c": "c"})
 
@@ -137,3 +133,45 @@ def test_update_empty_dict(self) -> None:
         self.assertEqual(d.get(), {"a": {}})
         d.update({"a": {"b": {}}})
         self.assertEqual(d.get(), {"a": {"b": {}}})
+
+    def test_from_base_and_override(self) -> None:
+        base = DottedDict({
+            "yaml.schemas": {}
+        })
+        override = {
+            "yaml.schemas": {
+                "http://foo.com/bar.json": "**/*.json"
+            }
+        }
+        result = DottedDict.from_base_and_override(base, override)
+        self.assertEqual(
+            result.get(None),
+            {
+                "yaml": {
+                    "schemas": {
+                        "http://foo.com/bar.json": "**/*.json"
+                    }
+                }
+            }
+        )
+
+    def test_update_with_dicts(self) -> None:
+        base = {
+            "settings": {
+                "yaml.schemas": {}
+            }
+        }
+        overrides = {
+            "yaml.schemas": {
+                "http://foo.com/bar.json": "**/*.json"
+            }
+        }
+        settings = DottedDict(base.get("settings", {}))
+        settings.update(overrides)
+        self.assertEqual(settings.get(), {
+            "yaml": {
+                "schemas": {
+                    "http://foo.com/bar.json": "**/*.json"
+                }
+            }
+        })