diff --git a/.github/workflows/test.yml b/.github/workflows/test.yml
index 0510bbd..1305500 100644
--- a/.github/workflows/test.yml
+++ b/.github/workflows/test.yml
@@ -12,6 +12,14 @@ jobs:
             - name: Test downstream wait
               run: bash downstream/wait.test.bash
 
+    setup-extension:
+        runs-on: ubuntu-latest
+        steps:
+            - name: Checkout code
+              uses: actions/checkout@9c091bb21b7c1c1d1991bb908d89e4e9dddfe3e0 # v7.0.0
+            - name: Test setup-extension composer config adjustments
+              run: bash setup-extension/action.test.bash
+
     shopware-version-fallback:
         runs-on: ubuntu-latest
         steps:
diff --git a/setup-extension/action.test.bash b/setup-extension/action.test.bash
new file mode 100644
index 0000000..23be9ad
--- /dev/null
+++ b/setup-extension/action.test.bash
@@ -0,0 +1,121 @@
+#!/usr/bin/env bash
+set -euo pipefail
+
+TMP_DIR=$(mktemp -d)
+trap 'rm -rf "${TMP_DIR}"' EXIT
+
+mkdir -p "${TMP_DIR}/custom/plugins/MyPlugin"
+
+cat > "${TMP_DIR}/composer.json" <<'EOF'
+{
+  "name": "shopware/production",
+  "repositories": [
+    {
+      "type": "path",
+      "url": "custom/plugins/*",
+      "options": {
+        "symlink": true
+      }
+    },
+    {
+      "type": "path",
+      "url": "custom/static-plugins/*",
+      "options": {
+        "symlink": true
+      }
+    }
+  ]
+}
+EOF
+
+cat > "${TMP_DIR}/custom/plugins/MyPlugin/composer.json" <<'EOF'
+{
+  "name": "swag/my-plugin",
+  "autoload-dev": {
+    "psr-4": {
+      "Swag\\MyPlugin\\Tests\\": "tests/"
+    }
+  }
+}
+EOF
+
+run_adjustments() {
+  local extra_repos="${1}"
+  local extension_name="MyPlugin"
+  
+  (
+    cd "${TMP_DIR}"
+    AUTOLOAD_DEV="$(jq '."autoload-dev"."psr-4" // {} | to_entries | map({"key": .key, "value": "custom/plugins/'"${extension_name}"'/\(.value)"}) | from_entries' < "custom/plugins/${extension_name}/composer.json")"
+    jq -s '
+      .[0] as $doc | .[1] as $extra | .[2] as $auto |
+      $doc | .repositories = (
+        if ($extra == null or $extra == {} or $extra == []) then
+          .repositories
+        elif (.repositories == null) then
+          $extra
+        elif (.repositories | type) == "array" then
+          .repositories + (if ($extra | type) == "array" then $extra else ($extra | to_entries | map(.value)) end)
+        elif (.repositories | type) == "object" and ($extra | type) == "object" then
+          .repositories * $extra
+        else
+          (.repositories | to_entries | map(.value)) + (if ($extra | type) == "array" then $extra else ($extra | to_entries | map(.value)) end)
+        end
+      )
+      | if .repositories == null then del(.repositories) else . end
+      | . * {"autoload-dev": {"psr-4": $auto}}
+    ' composer.json <(echo "${extra_repos}") <(echo "$AUTOLOAD_DEV") > composer.json.new
+    mv composer.json.new composer.json
+  )
+}
+
+# Test 1: Empty extraRepositories preserves path repos
+run_adjustments "{}"
+repo_count=$(jq '.repositories | length' "${TMP_DIR}/composer.json")
+first_repo_url=$(jq -r '.repositories[0].url' "${TMP_DIR}/composer.json")
+if [[ "${repo_count}" -ne 2 || "${first_repo_url}" != "custom/plugins/*" ]]; then
+  echo "Test 1 failed: Expected path repositories to be preserved, got count ${repo_count} and url '${first_repo_url}'"
+  cat "${TMP_DIR}/composer.json"
+  exit 1
+fi
+echo "Test 1 passed: Default empty extraRepositories preserves path repos"
+
+# Test 2: Object extraRepositories merges with path repos
+extra_obj='{"my-custom-repo": {"type": "vcs", "url": "https://example.com/repo.git"}}'
+run_adjustments "${extra_obj}"
+repo_count=$(jq '.repositories | length' "${TMP_DIR}/composer.json")
+third_repo_url=$(jq -r '.repositories[2].url' "${TMP_DIR}/composer.json")
+if [[ "${repo_count}" -ne 3 || "${third_repo_url}" != "https://example.com/repo.git" ]]; then
+  echo "Test 2 failed: Expected extra object repo to be merged, got count ${repo_count} and url '${third_repo_url}'"
+  cat "${TMP_DIR}/composer.json"
+  exit 1
+fi
+echo "Test 2 passed: Object extraRepositories merges with path repos"
+
+# Test 3: Array extraRepositories merges with path repos
+# Reset composer.json
+cat > "${TMP_DIR}/composer.json" <<'EOF'
+{
+  "name": "shopware/production",
+  "repositories": [
+    {
+      "type": "path",
+      "url": "custom/plugins/*",
+      "options": {
+        "symlink": true
+      }
+    }
+  ]
+}
+EOF
+extra_arr='[{"type": "vcs", "url": "https://example.com/repo-array.git"}]'
+run_adjustments "${extra_arr}"
+repo_count=$(jq '.repositories | length' "${TMP_DIR}/composer.json")
+second_repo_url=$(jq -r '.repositories[1].url' "${TMP_DIR}/composer.json")
+if [[ "${repo_count}" -ne 2 || "${second_repo_url}" != "https://example.com/repo-array.git" ]]; then
+  echo "Test 3 failed: Expected extra array repo to be merged, got count ${repo_count} and url '${second_repo_url}'"
+  cat "${TMP_DIR}/composer.json"
+  exit 1
+fi
+echo "Test 3 passed: Array extraRepositories merges with path repos"
+
+echo "All setup-extension tests passed successfully!"
diff --git a/setup-extension/action.yml b/setup-extension/action.yml
index d323096..d57e7d5 100644
--- a/setup-extension/action.yml
+++ b/setup-extension/action.yml
@@ -194,8 +194,25 @@ runs:
         composer config prefer-stable true
         composer config minimum-stability dev
 
-        AUTOLOAD_DEV="$(jq '."autoload-dev"."psr-4" | to_entries | map({"key": .key, "value": "custom/plugins/${{ inputs.extensionName }}/\(.value)"}) | from_entries' < custom/plugins/${{ inputs.extensionName }}/composer.json)"
-        jq -s '.[0] * {"repositories": .[1]} * {"autoload-dev": {"psr-4": .[2]}}' composer.json <(echo '${{ inputs.extraRepositories }}') <(echo "$AUTOLOAD_DEV") > composer.json.new
+        AUTOLOAD_DEV="$(jq '."autoload-dev"."psr-4" // {} | to_entries | map({"key": .key, "value": "custom/plugins/${{ inputs.extensionName }}/\(.value)"}) | from_entries' < custom/plugins/${{ inputs.extensionName }}/composer.json)"
+        jq -s '
+          .[0] as $doc | .[1] as $extra | .[2] as $auto |
+          $doc | .repositories = (
+            if ($extra == null or $extra == {} or $extra == []) then
+              .repositories
+            elif (.repositories == null) then
+              $extra
+            elif (.repositories | type) == "array" then
+              .repositories + (if ($extra | type) == "array" then $extra else ($extra | to_entries | map(.value)) end)
+            elif (.repositories | type) == "object" and ($extra | type) == "object" then
+              .repositories * $extra
+            else
+              (.repositories | to_entries | map(.value)) + (if ($extra | type) == "array" then $extra else ($extra | to_entries | map(.value)) end)
+            end
+          )
+          | if .repositories == null then del(.repositories) else . end
+          | . * {"autoload-dev": {"psr-4": $auto}}
+        ' composer.json <(echo '${{ inputs.extraRepositories }}') <(echo "$AUTOLOAD_DEV") > composer.json.new
         mv composer.json.new composer.json
 
     - name: Clone Dependencies