diff --git a/codegen-core/src/main/kotlin/software/amazon/smithy/rust/codegen/core/smithy/protocols/parse/JsonParserGenerator.kt b/codegen-core/src/main/kotlin/software/amazon/smithy/rust/codegen/core/smithy/protocols/parse/JsonParserGenerator.kt
index d3f46439c0..2f1e30a38f 100644
--- a/codegen-core/src/main/kotlin/software/amazon/smithy/rust/codegen/core/smithy/protocols/parse/JsonParserGenerator.kt
+++ b/codegen-core/src/main/kotlin/software/amazon/smithy/rust/codegen/core/smithy/protocols/parse/JsonParserGenerator.kt
@@ -523,6 +523,7 @@ class JsonParserGenerator(
                 "Shape" to returnSymbolToParse.symbol,
             ) {
                 rust("let mut variant = None;")
+                val checkValueSet = !shape.members().all { it.isTargetUnit() } && !codegenTarget.renderUnknownVariant()
                 rustBlock("match tokens.next().transpose()?") {
                     rustBlockTemplate(
                         """
@@ -555,7 +556,7 @@ class JsonParserGenerator(
                                         } else {
                                             withBlock("Some(#T::$variantName(", "))", returnSymbolToParse.symbol) {
                                                 deserializeMember(member)
-                                                unwrapOrDefaultOrError(member)
+                                                unwrapOrDefaultOrError(member, checkValueSet)
                                             }
                                         }
                                     }
@@ -593,8 +594,8 @@ class JsonParserGenerator(
         rust("#T(tokens)?", nestedParser)
     }
 
-    private fun RustWriter.unwrapOrDefaultOrError(member: MemberShape) {
-        if (symbolProvider.toSymbol(member).canUseDefault()) {
+    private fun RustWriter.unwrapOrDefaultOrError(member: MemberShape, checkValueSet: Boolean) {
+        if (symbolProvider.toSymbol(member).canUseDefault() && !checkValueSet) {
             rust(".unwrap_or_default()")
         } else {
             rustTemplate(
diff --git a/codegen-server/src/main/kotlin/software/amazon/smithy/rust/codegen/server/smithy/generators/protocol/ServerProtocolTestGenerator.kt b/codegen-server/src/main/kotlin/software/amazon/smithy/rust/codegen/server/smithy/generators/protocol/ServerProtocolTestGenerator.kt
index 30a4535129..9727ca580b 100644
--- a/codegen-server/src/main/kotlin/software/amazon/smithy/rust/codegen/server/smithy/generators/protocol/ServerProtocolTestGenerator.kt
+++ b/codegen-server/src/main/kotlin/software/amazon/smithy/rust/codegen/server/smithy/generators/protocol/ServerProtocolTestGenerator.kt
@@ -774,8 +774,6 @@ class ServerProtocolTestGenerator(
 
             FailingTest(RestJson, "RestJsonWithBodyExpectsApplicationJsonContentType", TestType.MalformedRequest),
 
-            FailingTest(RestJson, "RestJsonMalformedUnionNoFieldsSet", TestType.MalformedRequest),
-
             // Tests involving constraint traits, which are not yet fully implemented.
             // See https://github.com/awslabs/smithy-rs/issues/1401.
             FailingTest(RestJsonValidation, "RestJsonMalformedRangeFloat_case0", TestType.MalformedRequest),