diff --git a/Changelog.md b/Changelog.md
index 2ba6eac6..c90a3615 100644
--- a/Changelog.md
+++ b/Changelog.md
@@ -8,6 +8,8 @@ Changelog [format](http://keepachangelog.com/en/1.0.0/)
 
 ### Changed
 * Reverted sending IMAP updates to be not blocking again.
+### Fixed
+* GODT-783 Settings flags by FLAGS (not using +/-FLAGS) do not change spam state.
 
 ## [Bridge 1.4.2] Forth
 
diff --git a/internal/imap/mailbox_messages.go b/internal/imap/mailbox_messages.go
index f45a7062..95419dfd 100644
--- a/internal/imap/mailbox_messages.go
+++ b/internal/imap/mailbox_messages.go
@@ -57,6 +57,10 @@ func (im *imapMailbox) UpdateMessagesFlags(uid bool, seqSet *imap.SeqSet, operat
 	return im.addOrRemoveFlags(operation, messageIDs, flags)
 }
 
+// setFlags is used for FLAGS command (not +FLAGS or -FLAGS), which means
+// to set flags passed as an argument and unset the rest. For example,
+// if message is not read, is flagged and is not deleted, call FLAGS \Seen
+// should flag message as read, unflagged and keep undeleted.
 func (im *imapMailbox) setFlags(messageIDs, flags []string) error { //nolint
 	seen := false
 	flagged := false
@@ -106,16 +110,17 @@ func (im *imapMailbox) setFlags(messageIDs, flags []string) error { //nolint
 		}
 	}
 
-	spamMailbox, err := im.storeAddress.GetMailbox("Spam")
-	if err != nil {
-		return err
-	}
+	// Spam should not be taken into action here as Outlook is using FLAGS
+	// without preserving junk flag. Probably it's because junk is not standard
+	// in the rfc3501 and thus Outlook expects calling FLAGS \Seen will not
+	// change the state of junk or other non-standard flags.
+	// Still, its safe to label as spam once any client sends the request.
 	if spam {
-		if err := spamMailbox.LabelMessages(messageIDs); err != nil {
+		spamMailbox, err := im.storeAddress.GetMailbox("Spam")
+		if err != nil {
 			return err
 		}
-	} else {
-		if err := spamMailbox.UnlabelMessages(messageIDs); err != nil {
+		if err := spamMailbox.LabelMessages(messageIDs); err != nil {
 			return err
 		}
 	}
diff --git a/test/features/bridge/imap/message/update_spam.feature b/test/features/bridge/imap/message/update_spam.feature
new file mode 100644
index 00000000..f2c127da
--- /dev/null
+++ b/test/features/bridge/imap/message/update_spam.feature
@@ -0,0 +1,21 @@
+Feature: IMAP update messages in Spam folder
+  Background:
+    Given there is connected user "user"
+    # Messages are inserted in opposite way to keep increasing ID.
+    # Sequence numbers are then opposite than listed above.
+    And there are messages in mailbox "Spam" for "user"
+      | from              | to         | subject | body  | read  | starred | deleted |
+      | john.doe@mail.com | user@pm.me | foo     | hello | false | false   | false   |
+      | jane.doe@mail.com | name@pm.me | bar     | world | true  | true    | false   |
+    And there is IMAP client logged in as "user"
+    And there is IMAP client selected in "Spam"
+
+  Scenario: Mark message as read only
+    When IMAP client marks message "2" with "\Seen"
+    Then IMAP response is "OK"
+    And message "1" in "Spam" for "user" is marked as read
+    And message "1" in "Spam" for "user" is marked as unstarred
+    And API mailbox "Spam" for "user" has messages
+      | from              | to         | subject |
+      | john.doe@mail.com | user@pm.me | foo     |
+      | jane.doe@mail.com | name@pm.me | bar     |