diff --git a/bitwarden_license/bit-web/src/app/dirt/access-intelligence/all-applications/applications.component.html b/bitwarden_license/bit-web/src/app/dirt/access-intelligence/all-applications/applications.component.html
index 27864fa2f87..743f8ff1b68 100644
--- a/bitwarden_license/bit-web/src/app/dirt/access-intelligence/all-applications/applications.component.html
+++ b/bitwarden_license/bit-web/src/app/dirt/access-intelligence/all-applications/applications.component.html
@@ -84,9 +84,9 @@
       class="tw-mb-10"
     ></app-table-row-scrollable-m11>
 
-    @if (emptyTableExplanation()) {
+    @if (this.dataSource.filteredData?.length === 0) {
       <div class="tw-flex tw-mt-10 tw-justify-center">
-        <span bitTypography="body2">{{ emptyTableExplanation() }}</span>
+        <span bitTypography="body2">{{ "noApplicationsMatchTheseFilters" | i18n }}</span>
       </div>
     }
   </div>
diff --git a/bitwarden_license/bit-web/src/app/dirt/access-intelligence/all-applications/applications.component.ts b/bitwarden_license/bit-web/src/app/dirt/access-intelligence/all-applications/applications.component.ts
index 0020106ba7d..962628584d3 100644
--- a/bitwarden_license/bit-web/src/app/dirt/access-intelligence/all-applications/applications.component.ts
+++ b/bitwarden_license/bit-web/src/app/dirt/access-intelligence/all-applications/applications.component.ts
@@ -117,7 +117,6 @@ export class ApplicationsComponent implements OnInit {
       icon: " ",
     },
   ]);
-  protected readonly emptyTableExplanation = signal("");
 
   readonly allSelectedAppsAreCritical = computed(() => {
     if (!this.dataSource.filteredData || this.selectedUrls().size == 0) {
@@ -174,6 +173,9 @@ export class ApplicationsComponent implements OnInit {
           }));
           this.dataSource.data = tableDataWithIcon;
           this.totalApplicationsCount.set(report.reportData.length);
+          this.criticalApplicationsCount.set(
+            report.reportData.filter((app) => app.isMarkedAsCritical).length,
+          );
         } else {
           this.dataSource.data = [];
         }
@@ -183,16 +185,6 @@ export class ApplicationsComponent implements OnInit {
       },
     });
 
-    this.dataService.criticalReportResults$.pipe(takeUntilDestroyed(this.destroyRef)).subscribe({
-      next: (criticalReport) => {
-        if (criticalReport != null) {
-          this.criticalApplicationsCount.set(criticalReport.reportData.length);
-        } else {
-          this.criticalApplicationsCount.set(0);
-        }
-      },
-    });
-
     combineLatest([
       this.searchControl.valueChanges.pipe(startWith("")),
       this.selectedFilterObservable,
@@ -219,12 +211,6 @@ export class ApplicationsComponent implements OnInit {
           }
         });
         this.selectedUrls.set(filteredUrls);
-
-        if (this.dataSource?.filteredData?.length === 0) {
-          this.emptyTableExplanation.set(this.i18nService.t("noApplicationsMatchTheseFilters"));
-        } else {
-          this.emptyTableExplanation.set("");
-        }
       });
   }
 
@@ -240,7 +226,7 @@ export class ApplicationsComponent implements OnInit {
       .saveCriticalApplications(Array.from(this.selectedUrls()))
       .pipe(takeUntilDestroyed(this.destroyRef))
       .subscribe({
-        next: () => {
+        next: (response) => {
           this.toastService.showToast({
             variant: "success",
             title: "",
@@ -248,6 +234,9 @@ export class ApplicationsComponent implements OnInit {
           });
           this.selectedUrls.set(new Set<string>());
           this.updatingCriticalApps.set(false);
+          this.criticalApplicationsCount.set(
+            response?.data?.summaryData?.totalCriticalApplicationCount ?? 0,
+          );
         },
         error: () => {
           this.toastService.showToast({
@@ -267,7 +256,7 @@ export class ApplicationsComponent implements OnInit {
       .removeCriticalApplications(appsToUnmark)
       .pipe(takeUntilDestroyed(this.destroyRef))
       .subscribe({
-        next: () => {
+        next: (response) => {
           this.toastService.showToast({
             message: this.i18nService.t(
               "numApplicationsUnmarkedCriticalSuccess",
@@ -277,6 +266,9 @@ export class ApplicationsComponent implements OnInit {
           });
           this.selectedUrls.set(new Set<string>());
           this.updatingCriticalApps.set(false);
+          this.criticalApplicationsCount.set(
+            response?.data?.summaryData?.totalCriticalApplicationCount ?? 0,
+          );
         },
         error: () => {
           this.toastService.showToast({
diff --git a/libs/components/src/chip-select/chip-select.component.spec.ts b/libs/components/src/chip-select/chip-select.component.spec.ts
index 3a66b799652..bfabb5ea95e 100644
--- a/libs/components/src/chip-select/chip-select.component.spec.ts
+++ b/libs/components/src/chip-select/chip-select.component.spec.ts
@@ -1,4 +1,4 @@
-import { ChangeDetectionStrategy, Component, signal } from "@angular/core";
+import { ChangeDetectionStrategy, Component, signal, computed } from "@angular/core";
 import { ComponentFixture, TestBed } from "@angular/core/testing";
 import { FormControl } from "@angular/forms";
 import { By } from "@angular/platform-browser";
@@ -502,3 +502,157 @@ class TestAppComponent {
   readonly disabled = signal(false);
   readonly fullWidth = signal(false);
 }
+
+describe("ChipSelectComponentWithDynamicOptions", () => {
+  let component: ChipSelectComponent<string>;
+  let fixture: ComponentFixture<TestAppWithDynamicOptionsComponent>;
+
+  const getChipButton = () =>
+    fixture.debugElement.query(By.css("[data-fvw-target]"))?.nativeElement as HTMLButtonElement;
+
+  beforeEach(async () => {
+    await TestBed.configureTestingModule({
+      imports: [TestAppWithDynamicOptionsComponent, NoopAnimationsModule],
+      providers: [{ provide: I18nService, useValue: mockI18nService }],
+    }).compileComponents();
+
+    fixture = TestBed.createComponent(TestAppWithDynamicOptionsComponent);
+    fixture.detectChanges();
+
+    component = fixture.debugElement.query(By.directive(ChipSelectComponent)).componentInstance;
+
+    fixture.componentInstance.firstCounter.set(0);
+    fixture.componentInstance.secondCounter.set(0);
+
+    fixture.detectChanges();
+  });
+
+  describe("User-Facing Behavior", () => {
+    it("should update available options when they change", () => {
+      const first = 5;
+      const second = 10;
+
+      const testApp = fixture.componentInstance;
+      testApp.firstCounter.set(first);
+      testApp.secondCounter.set(second);
+      fixture.detectChanges();
+
+      getChipButton().click();
+      fixture.detectChanges();
+
+      const menuItems = Array.from(document.querySelectorAll<HTMLButtonElement>("[bitMenuItem]"));
+      expect(menuItems.some((el) => el.textContent?.includes(`Option - ${first}`))).toBe(true);
+      expect(menuItems.some((el) => el.textContent?.includes(`Option - ${second}`))).toBe(true);
+    });
+  });
+
+  describe("Form Integration Behavior", () => {
+    it("should display selected option when form control value is set", () => {
+      const testApp = fixture.componentInstance;
+      testApp.firstCounter.set(1);
+      testApp.secondCounter.set(2);
+
+      component.writeValue("opt2"); // select second menu option which has dynamic label
+      fixture.detectChanges();
+
+      const button = getChipButton();
+      expect(button.textContent?.trim()).toContain("Option - 2"); // verify that the label reflects the dynamic value
+
+      // change the dynamic values and verify that the menu still shows the correct labels for the options
+      // it should also keep opt2 selected since it's the same value, just with an updated label
+      const first = 10;
+      const second = 20;
+
+      testApp.firstCounter.set(first);
+      testApp.secondCounter.set(second);
+      fixture.detectChanges();
+
+      // again, verify that the label reflects the dynamic value
+      expect(button.textContent?.trim()).toContain(`Option - ${second}`);
+
+      // click the button to open the menu
+      getChipButton().click();
+      fixture.detectChanges();
+
+      // verify that the menu items also reflect the updated dynamic values
+      const menuItems = Array.from(document.querySelectorAll<HTMLButtonElement>("[bitMenuItem]"));
+      expect(menuItems.some((el) => el.textContent?.includes(`Option - ${first}`))).toBe(true);
+      expect(menuItems.some((el) => el.textContent?.includes(`Option - ${second}`))).toBe(true);
+    });
+
+    it("should find and display nested option when form control value is set", () => {
+      const testApp = fixture.componentInstance;
+      testApp.firstCounter.set(1);
+      testApp.secondCounter.set(2);
+
+      component.writeValue("child1"); // select a child menu item
+      fixture.detectChanges();
+
+      const button = getChipButton();
+      // verify that the label reflects the dynamic value for the child option
+      expect(button.textContent?.trim()).toContain("Child - 1");
+
+      const first = 10;
+      const second = 20;
+
+      testApp.firstCounter.set(first);
+      testApp.secondCounter.set(second);
+      fixture.detectChanges();
+
+      // again, verify that the label reflects the dynamic value
+      expect(button.textContent?.trim()).toContain(`Child - ${first}`);
+    });
+
+    it("should clear selection when form control value is set to null", () => {
+      const testApp = fixture.componentInstance;
+      testApp.firstCounter.set(1);
+      testApp.secondCounter.set(2);
+
+      component.writeValue("opt1");
+      fixture.detectChanges();
+
+      expect(getChipButton().textContent).toContain("Option - 1");
+
+      component.writeValue(null as any);
+      fixture.detectChanges();
+      expect(getChipButton().textContent).toContain("Select an option");
+    });
+  });
+}); /* end of ChipSelectComponentWithDynamicOptions tests */
+@Component({
+  selector: "test-app-with-dynamic-options",
+  template: `
+    <bit-chip-select
+      placeholderText="Select an option"
+      placeholderIcon="bwi-filter"
+      [options]="options()"
+      [disabled]="disabled()"
+      [fullWidth]="fullWidth()"
+    />
+  `,
+  imports: [ChipSelectComponent],
+  changeDetection: ChangeDetectionStrategy.OnPush,
+})
+class TestAppWithDynamicOptionsComponent {
+  readonly firstCounter = signal(1);
+  readonly secondCounter = signal(2);
+  readonly options = computed(() => {
+    const first = this.firstCounter();
+    const second = this.secondCounter();
+    return [
+      { label: `Option - ${first}`, value: "opt1", icon: "bwi-folder" },
+      { label: `Option - ${second}`, value: "opt2" },
+      {
+        label: "Parent Option",
+        value: "parent",
+        children: [
+          { label: `Child - ${first}`, value: "child1" },
+          { label: `Child - ${second}`, value: "child2" },
+        ],
+      },
+    ];
+  });
+
+  readonly disabled = signal(false);
+  readonly fullWidth = signal(false);
+}
diff --git a/libs/components/src/chip-select/chip-select.component.ts b/libs/components/src/chip-select/chip-select.component.ts
index 50e462dc815..1e988960472 100644
--- a/libs/components/src/chip-select/chip-select.component.ts
+++ b/libs/components/src/chip-select/chip-select.component.ts
@@ -106,8 +106,19 @@ export class ChipSelectComponent<T = unknown> implements ControlValueAccessor {
   constructor() {
     // Initialize the root tree whenever options change
     effect(() => {
+      const currentSelection = this.selectedOption;
+
+      // when the options change, clear the childParentMap
+      this.childParentMap.clear();
+
       this.initializeRootTree(this.options());
 
+      // when the options change, we need to change our selectedOption
+      // to reflect the changed options.
+      if (currentSelection?.value != null) {
+        this.selectedOption = this.findOption(this.rootTree, currentSelection.value);
+      }
+
       // If there's a pending value, apply it now that options are available
       if (this.pendingValue !== undefined) {
         this.selectedOption = this.findOption(this.rootTree, this.pendingValue);