diff --git a/src/core/unit.c b/src/core/unit.c
index 3f24cf27f4..8ac0aad2d7 100644
--- a/src/core/unit.c
+++ b/src/core/unit.c
@@ -3796,8 +3796,6 @@ static bool fragment_mtime_newer(const char *path, usec_t mtime, bool path_maske
 }
 
 bool unit_need_daemon_reload(Unit *u) {
-        _cleanup_strv_free_ char **dropins = NULL;
-
         assert(u);
         assert(u->manager);
 
@@ -3813,16 +3811,20 @@ bool unit_need_daemon_reload(Unit *u) {
         if (fragment_mtime_newer(u->source_path, u->source_mtime, false))
                 return true;
 
-        if (u->load_state == UNIT_LOADED)
-                (void) unit_find_dropin_paths(u, &dropins);
-        if (!strv_equal(u->dropin_paths, dropins))
-                return true;
+        if (u->load_state == UNIT_LOADED) {
+                _cleanup_strv_free_ char **dropins = NULL;
 
-        /* … any drop-ins that are masked are simply omitted from the list. */
-        STRV_FOREACH(path, u->dropin_paths)
-                if (fragment_mtime_newer(*path, u->dropin_mtime, false))
+                (void) unit_find_dropin_paths(u, &dropins);
+
+                if (!strv_equal(u->dropin_paths, dropins))
                         return true;
 
+                /* … any drop-ins that are masked are simply omitted from the list. */
+                STRV_FOREACH(path, u->dropin_paths)
+                        if (fragment_mtime_newer(*path, u->dropin_mtime, false))
+                                return true;
+        }
+
         return false;
 }
 
diff --git a/test/units/TEST-07-PID1.issue-33672.sh b/test/units/TEST-07-PID1.issue-33672.sh
new file mode 100755
index 0000000000..370497c346
--- /dev/null
+++ b/test/units/TEST-07-PID1.issue-33672.sh
@@ -0,0 +1,40 @@
+#!/usr/bin/env bash
+# SPDX-License-Identifier: LGPL-2.1-or-later
+# -*- mode: shell-script; indent-tabs-mode: nil; sh-basic-offset: 4; -*-
+# ex: ts=8 sw=4 sts=4 et filetype=sh
+
+set -eux
+set -o pipefail
+
+# shellcheck source=test/units/util.sh
+. "$(dirname "$0")"/util.sh
+
+# systemctl status always shows daemon-reload warning for a masked service with drop-ins
+# Issue: https://github.com/systemd/systemd/issues/33672
+
+UNIT=test-23-NeedDaemonReload.service
+
+cleanup() {
+    rm -rf /run/systemd/system/"$UNIT" /run/systemd/system/"$UNIT".d
+    systemctl daemon-reload
+}
+
+trap cleanup EXIT
+
+cat > /run/systemd/system/"$UNIT" <<EOF
+[Service]
+ExecStart=/usr/bin/true
+EOF
+
+mkdir /run/systemd/system/"$UNIT".d
+cat > /run/systemd/system/"$UNIT".d/desc.conf <<EOF
+[Unit]
+Description=Test NeedDaemonReload status of a masked unit with drop-ins
+EOF
+
+systemctl daemon-reload
+systemctl unmask "$UNIT"
+assert_eq "$(systemctl show -P NeedDaemonReload "$UNIT")" no
+
+systemctl mask "$UNIT"
+assert_eq "$(systemctl show -P NeedDaemonReload "$UNIT")" no