diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/Spawnable/PrefabDocument.cpp b/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/Spawnable/PrefabDocument.cpp
index c0eb5257b0..04fdea30d2 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/Spawnable/PrefabDocument.cpp
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/Spawnable/PrefabDocument.cpp
@@ -16,7 +16,7 @@ namespace AzToolsFramework::Prefab::PrefabConversionUtils
         : m_name(AZStd::move(name))
         , m_instance(AZStd::make_unique<AzToolsFramework::Prefab::Instance>())
     {
-        m_instance->SetTemplateSourcePath(AZ::IO::Path("InMemory") / name);
+        m_instance->SetTemplateSourcePath(AZ::IO::Path("InMemory") / m_name);
     }
 
     bool PrefabDocument::SetPrefabDom(const PrefabDom& prefab)
@@ -64,8 +64,14 @@ namespace AzToolsFramework::Prefab::PrefabConversionUtils
     {
         if (m_isDirty)
         {
-            m_isDirty = !PrefabDomUtils::StoreInstanceInPrefabDom(*m_instance, m_dom);
+            [[maybe_unused]] bool storedSuccessfully = PrefabDomUtils::StoreInstanceInPrefabDom(*m_instance, m_dom);
+            AZ_Assert(storedSuccessfully, "Failed to store Instance '%s' to PrefabDom.", m_name.c_str());
+            m_isDirty = false;
         }
+        // After the PrefabDom is moved an empty PrefabDom is left behind. This should be reflected in the Instance,
+        // so reset it so it's empty as well.
+        m_instance->Reset();
+        m_instance->SetTemplateSourcePath(AZ::IO::Path("InMemory") / m_name);
         return AZStd::move(m_dom);
     }
 
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/Spawnable/PrefabProcessorContext.cpp b/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/Spawnable/PrefabProcessorContext.cpp
index fd8ce43836..12625712b7 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/Spawnable/PrefabProcessorContext.cpp
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/Spawnable/PrefabProcessorContext.cpp
@@ -245,7 +245,7 @@ namespace AzToolsFramework::Prefab::PrefabConversionUtils
                 AZ::Data::Asset<AzFramework::Spawnable>(target->m_spawnable.GetId(), azrtti_typeid<AzFramework::Spawnable>()), alias.m_tag,
                 sourceIndex, targetIndex,
                 alias.m_aliasType, alias.m_loadBehavior == EntityAliasSpawnableLoadBehavior::QueueLoad);
-            
+
             // Register the dependency between the two spawnables.
             RegisterProductAssetDependency(source->m_spawnable.GetId(), target->m_spawnable.GetId(), loadBehavior);