diff --git a/CHANGELOG.md b/CHANGELOG.md
index e2a3635f6..8a38e80ba 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -19,6 +19,7 @@ The format is based on [Keep a Changelog](https://keepachangelog.com/en/1.0.0/).
 - Documentation issue in which a non-existing nginx file was referenced
 - Issue where a bad inbox URL could break federation
 - Issue where hashtag rel values would be scrubbed
+- Issue where short domains listed in `transparency_obfuscate_domains` were not actually obfuscated
 
 ## 2023.08
 
diff --git a/lib/pleroma/web/activity_pub/mrf/simple_policy.ex b/lib/pleroma/web/activity_pub/mrf/simple_policy.ex
index ba54eb674..c2e17ca9e 100644
--- a/lib/pleroma/web/activity_pub/mrf/simple_policy.ex
+++ b/lib/pleroma/web/activity_pub/mrf/simple_policy.ex
@@ -314,6 +314,20 @@ def filter(object) when is_binary(object) do
   def filter(object), do: {:ok, object}
 
   defp obfuscate(string) when is_binary(string) do
+    # Want to strip at least two neighbouring chars
+    # to ensure at least one non-dot char is in the obfuscation area
+    stripped = String.length(string) - 6
+
+    {keepstart, keepend} =
+      if stripped > 1 do
+        {3, 3}
+      else
+        {
+          2 - div(1 - stripped, 2),
+          2 + div(stripped, 2)
+        }
+      end
+
     string
     |> to_charlist()
     |> Enum.with_index()
@@ -322,7 +336,7 @@ defp obfuscate(string) when is_binary(string) do
         ?.
 
       {char, index} ->
-        if 3 <= index && index < String.length(string) - 3, do: ?*, else: char
+        if keepstart <= index && index < String.length(string) - keepend, do: ?*, else: char
     end)
     |> to_string()
   end
diff --git a/test/pleroma/web/activity_pub/mrf/simple_policy_test.exs b/test/pleroma/web/activity_pub/mrf/simple_policy_test.exs
index 875cf8f43..c6600f001 100644
--- a/test/pleroma/web/activity_pub/mrf/simple_policy_test.exs
+++ b/test/pleroma/web/activity_pub/mrf/simple_policy_test.exs
@@ -283,7 +283,7 @@ test "obfuscates domains listed in :transparency_obfuscate_domains" do
 
       assert {:ok,
               %{
-                mrf_simple: %{reject: ["rem***.*****nce", "a.b"]},
+                mrf_simple: %{reject: ["rem***.*****nce", "*.b"]},
                 mrf_simple_info: %{reject: %{"rem***.*****nce" => %{}}}
               }} = SimplePolicy.describe()
     end