diff --git a/esphome/cpp_helpers.py b/esphome/cpp_helpers.py
index a1289485ca..746a006348 100644
--- a/esphome/cpp_helpers.py
+++ b/esphome/cpp_helpers.py
@@ -1,12 +1,6 @@
 import logging
 
 from esphome.const import (
-    CONF_DEVICE_ID,
-    CONF_DISABLED_BY_DEFAULT,
-    CONF_ENTITY_CATEGORY,
-    CONF_ICON,
-    CONF_INTERNAL,
-    CONF_NAME,
     CONF_SAFE_MODE,
     CONF_SETUP_PRIORITY,
     CONF_TYPE_ID,
@@ -15,9 +9,11 @@ from esphome.const import (
 )
 from esphome.core import CORE, ID, coroutine
 from esphome.coroutine import FakeAwaitable
-from esphome.cpp_generator import MockObj, add, get_variable
+from esphome.cpp_generator import add, get_variable
 from esphome.cpp_types import App
-from esphome.entity import get_base_entity_object_id
+from esphome.entity import (  # noqa: F401  # pylint: disable=unused-import
+    setup_entity,  # Import for backward compatibility
+)
 from esphome.types import ConfigFragmentType, ConfigType
 from esphome.util import Registry, RegistryEntry
 
@@ -97,75 +93,6 @@ async def register_parented(var, value):
     add(var.set_parent(paren))
 
 
-async def setup_entity(var: MockObj, config: ConfigType, platform: str) -> None:
-    """Set up generic properties of an Entity.
-
-    This function handles duplicate entity names by automatically appending
-    a suffix (_2, _3, etc.) when multiple entities have the same object_id
-    within the same platform and device combination.
-
-    Args:
-        var: The entity variable to set up
-        config: Configuration dictionary containing entity settings
-        platform: The platform name (e.g., "sensor", "binary_sensor")
-    """
-    # Get device info
-    device_id: int = 0
-    if CONF_DEVICE_ID in config:
-        device_id_obj: ID = config[CONF_DEVICE_ID]
-        device: MockObj = await get_variable(device_id_obj)
-        add(var.set_device(device))
-        # Use the device's ID hash as device_id
-        from esphome.helpers import fnv1a_32bit_hash
-
-        device_id = fnv1a_32bit_hash(device_id_obj.id)
-
-    add(var.set_name(config[CONF_NAME]))
-
-    # Calculate base object_id using the same logic as C++
-    # This must match the C++ behavior in esphome/core/entity_base.cpp
-    base_object_id = get_base_entity_object_id(config[CONF_NAME], CORE.friendly_name)
-
-    if not config[CONF_NAME]:
-        _LOGGER.debug(
-            "Entity has empty name, using '%s' as object_id base", base_object_id
-        )
-
-    # Handle duplicates
-    # Check for duplicates
-    unique_key: tuple[int, str, str] = (device_id, platform, base_object_id)
-    if unique_key in CORE.unique_ids:
-        # Found duplicate, add suffix
-        count = CORE.unique_ids[unique_key] + 1
-        CORE.unique_ids[unique_key] = count
-        object_id = f"{base_object_id}_{count}"
-        _LOGGER.info(
-            "Duplicate %s entity '%s' found. Renaming to '%s'",
-            platform,
-            config[CONF_NAME],
-            object_id,
-        )
-    else:
-        # First occurrence
-        CORE.unique_ids[unique_key] = 1
-        object_id = base_object_id
-
-    add(var.set_object_id(object_id))
-    _LOGGER.debug(
-        "Setting object_id '%s' for entity '%s' on platform '%s'",
-        object_id,
-        config[CONF_NAME],
-        platform,
-    )
-    add(var.set_disabled_by_default(config[CONF_DISABLED_BY_DEFAULT]))
-    if CONF_INTERNAL in config:
-        add(var.set_internal(config[CONF_INTERNAL]))
-    if CONF_ICON in config:
-        add(var.set_icon(config[CONF_ICON]))
-    if CONF_ENTITY_CATEGORY in config:
-        add(var.set_entity_category(config[CONF_ENTITY_CATEGORY]))
-
-
 def extract_registry_entry_config(
     registry: Registry,
     full_config: ConfigType,
diff --git a/esphome/entity.py b/esphome/entity.py
index 732822d0ff..fa7f1ab7d9 100644
--- a/esphome/entity.py
+++ b/esphome/entity.py
@@ -1,10 +1,26 @@
 """Entity-related helper functions."""
 
-from esphome.core import CORE
+import logging
+
+from esphome.const import (
+    CONF_DEVICE_ID,
+    CONF_DISABLED_BY_DEFAULT,
+    CONF_ENTITY_CATEGORY,
+    CONF_ICON,
+    CONF_INTERNAL,
+    CONF_NAME,
+)
+from esphome.core import CORE, ID
+from esphome.cpp_generator import MockObj, add, get_variable
 from esphome.helpers import sanitize, snake_case
+from esphome.types import ConfigType
+
+_LOGGER = logging.getLogger(__name__)
 
 
-def get_base_entity_object_id(name: str, friendly_name: str | None) -> str:
+def get_base_entity_object_id(
+    name: str, friendly_name: str | None, device_name: str | None = None
+) -> str:
     """Calculate the base object ID for an entity that will be set via set_object_id().
 
     This function calculates what object_id_c_str_ should be set to in C++.
@@ -21,6 +37,7 @@ def get_base_entity_object_id(name: str, friendly_name: str | None) -> str:
     Args:
         name: The entity name (empty string if no name)
         friendly_name: The friendly name from CORE.friendly_name
+        device_name: The device name if entity is on a sub-device
 
     Returns:
         The base object ID to use for duplicate checking and to pass to set_object_id()
@@ -29,9 +46,12 @@ def get_base_entity_object_id(name: str, friendly_name: str | None) -> str:
     if name:
         # Entity has its own name (has_own_name will be true)
         base_str = name
+    elif device_name:
+        # Entity has empty name and is on a sub-device
+        # C++ EntityBase::set_name() uses device->get_name() when device is set
+        base_str = device_name
     elif friendly_name:
         # Entity has empty name (has_own_name will be false)
-        # Calculate what the object_id should be
         # C++ uses App.get_friendly_name() which returns friendly_name or device name
         base_str = friendly_name
     else:
@@ -39,3 +59,77 @@ def get_base_entity_object_id(name: str, friendly_name: str | None) -> str:
         base_str = CORE.name
 
     return sanitize(snake_case(base_str))
+
+
+async def setup_entity(var: MockObj, config: ConfigType, platform: str) -> None:
+    """Set up generic properties of an Entity.
+
+    This function handles duplicate entity names by automatically appending
+    a suffix (_2, _3, etc.) when multiple entities have the same object_id
+    within the same platform and device combination.
+
+    Args:
+        var: The entity variable to set up
+        config: Configuration dictionary containing entity settings
+        platform: The platform name (e.g., "sensor", "binary_sensor")
+    """
+    # Get device info
+    device_id: int = 0
+    device_name: str | None = None
+    if CONF_DEVICE_ID in config:
+        device_id_obj: ID = config[CONF_DEVICE_ID]
+        device: MockObj = await get_variable(device_id_obj)
+        add(var.set_device(device))
+        # Use the device's ID hash as device_id
+        from esphome.helpers import fnv1a_32bit_hash
+
+        device_id = fnv1a_32bit_hash(device_id_obj.id)
+        # Get device name for object ID calculation
+        device_name = device_id_obj.id
+
+    add(var.set_name(config[CONF_NAME]))
+
+    # Calculate base object_id using the same logic as C++
+    # This must match the C++ behavior in esphome/core/entity_base.cpp
+    base_object_id = get_base_entity_object_id(
+        config[CONF_NAME], CORE.friendly_name, device_name
+    )
+
+    if not config[CONF_NAME]:
+        _LOGGER.debug(
+            "Entity has empty name, using '%s' as object_id base", base_object_id
+        )
+
+    # Handle duplicates
+    # Check for duplicates
+    unique_key: tuple[int, str, str] = (device_id, platform, base_object_id)
+    if unique_key in CORE.unique_ids:
+        # Found duplicate, add suffix
+        count = CORE.unique_ids[unique_key] + 1
+        CORE.unique_ids[unique_key] = count
+        object_id = f"{base_object_id}_{count}"
+        _LOGGER.info(
+            "Duplicate %s entity '%s' found. Renaming to '%s'",
+            platform,
+            config[CONF_NAME],
+            object_id,
+        )
+    else:
+        # First occurrence
+        CORE.unique_ids[unique_key] = 1
+        object_id = base_object_id
+
+    add(var.set_object_id(object_id))
+    _LOGGER.debug(
+        "Setting object_id '%s' for entity '%s' on platform '%s'",
+        object_id,
+        config[CONF_NAME],
+        platform,
+    )
+    add(var.set_disabled_by_default(config[CONF_DISABLED_BY_DEFAULT]))
+    if CONF_INTERNAL in config:
+        add(var.set_internal(config[CONF_INTERNAL]))
+    if CONF_ICON in config:
+        add(var.set_icon(config[CONF_ICON]))
+    if CONF_ENTITY_CATEGORY in config:
+        add(var.set_entity_category(config[CONF_ENTITY_CATEGORY]))
diff --git a/tests/integration/fixtures/duplicate_entities.yaml b/tests/integration/fixtures/duplicate_entities.yaml
index 0f831db90d..17332fe4b2 100644
--- a/tests/integration/fixtures/duplicate_entities.yaml
+++ b/tests/integration/fixtures/duplicate_entities.yaml
@@ -86,6 +86,22 @@ binary_sensor:
     device_id: controller_2
     lambda: return false;
 
+  # Issue #6953: Empty names on binary sensors
+  - platform: template
+    name: ""
+    lambda: return true;
+  - platform: template
+    name: ""
+    lambda: return false;
+
+  - platform: template
+    name: ""
+    lambda: return true;
+
+  - platform: template
+    name: ""
+    lambda: return false;
+
 # Scenario 6: Test with special characters that need sanitization
 text_sensor:
   - platform: template
@@ -116,3 +132,80 @@ switch:
     lambda: return true;
     turn_on_action: []
     turn_off_action: []
+
+  # Scenario 8: Issue #6953 - Multiple entities with empty names
+  # Empty names on main device - should use device name with suffixes
+  - platform: template
+    name: ""
+    lambda: return false;
+    turn_on_action: []
+    turn_off_action: []
+
+  - platform: template
+    name: ""
+    lambda: return true;
+    turn_on_action: []
+    turn_off_action: []
+
+  - platform: template
+    name: ""
+    lambda: return false;
+    turn_on_action: []
+    turn_off_action: []
+
+  # Scenario 9: Issue #6953 - Empty names on sub-devices
+  # Empty names on sub-device - should use sub-device name with suffixes
+  - platform: template
+    name: ""
+    device_id: controller_1
+    lambda: return false;
+    turn_on_action: []
+    turn_off_action: []
+
+  - platform: template
+    name: ""
+    device_id: controller_1
+    lambda: return true;
+    turn_on_action: []
+    turn_off_action: []
+
+  - platform: template
+    name: ""
+    device_id: controller_1
+    lambda: return false;
+    turn_on_action: []
+    turn_off_action: []
+
+  # Empty names on different sub-device
+  - platform: template
+    name: ""
+    device_id: controller_2
+    lambda: return false;
+    turn_on_action: []
+    turn_off_action: []
+
+  - platform: template
+    name: ""
+    device_id: controller_2
+    lambda: return true;
+    turn_on_action: []
+    turn_off_action: []
+
+  # Scenario 10: Issue #6953 - Duplicate "xyz" names
+  - platform: template
+    name: "xyz"
+    lambda: return false;
+    turn_on_action: []
+    turn_off_action: []
+
+  - platform: template
+    name: "xyz"
+    lambda: return true;
+    turn_on_action: []
+    turn_off_action: []
+
+  - platform: template
+    name: "xyz"
+    lambda: return false;
+    turn_on_action: []
+    turn_off_action: []
diff --git a/tests/integration/test_duplicate_entities.py b/tests/integration/test_duplicate_entities.py
index edbcb9799c..ba40e6bd23 100644
--- a/tests/integration/test_duplicate_entities.py
+++ b/tests/integration/test_duplicate_entities.py
@@ -161,6 +161,85 @@ async def test_duplicate_entities(
             "Second power switch should be power_switch_2"
         )
 
+        # Scenario 6: Check empty names on main device (Issue #6953)
+        empty_binary = [b for b in binary_sensors if b.name == ""]
+        empty_binary_ids = sorted([b.object_id for b in empty_binary])
+
+        # Should use device name "duplicate-entities-test" (sanitized, not snake_case)
+        assert len(empty_binary_ids) >= 4, (
+            f"Expected at least 4 empty name binary sensors, got {len(empty_binary_ids)}"
+        )
+        assert "duplicate-entities-test" in empty_binary_ids, (
+            "First empty binary sensor should use device name"
+        )
+        assert "duplicate-entities-test_2" in empty_binary_ids, (
+            "Second empty binary sensor should be duplicate-entities-test_2"
+        )
+        assert "duplicate-entities-test_3" in empty_binary_ids, (
+            "Third empty binary sensor should be duplicate-entities-test_3"
+        )
+        assert "duplicate-entities-test_4" in empty_binary_ids, (
+            "Fourth empty binary sensor should be duplicate-entities-test_4"
+        )
+
+        # Scenario 7: Check empty names on sub-devices (Issue #6953)
+        empty_switches = [s for s in switches if s.name == ""]
+
+        # Group by device
+        c1_empty_switches = [
+            s
+            for s in empty_switches
+            if getattr(s, "device_id", None) == controller_1.device_id
+        ]
+        c2_empty_switches = [
+            s
+            for s in empty_switches
+            if getattr(s, "device_id", None) == controller_2.device_id
+        ]
+        main_empty_switches = [
+            s
+            for s in empty_switches
+            if getattr(s, "device_id", None)
+            not in [controller_1.device_id, controller_2.device_id]
+        ]
+
+        # Controller 1 empty switches should use "controller_1"
+        c1_empty_ids = sorted([s.object_id for s in c1_empty_switches])
+        assert len(c1_empty_ids) >= 3, (
+            f"Expected at least 3 empty switches on controller_1, got {len(c1_empty_ids)}"
+        )
+        assert "controller_1" in c1_empty_ids, "First should be controller_1"
+        assert "controller_1_2" in c1_empty_ids, "Second should be controller_1_2"
+        assert "controller_1_3" in c1_empty_ids, "Third should be controller_1_3"
+
+        # Controller 2 empty switches
+        c2_empty_ids = sorted([s.object_id for s in c2_empty_switches])
+        assert len(c2_empty_ids) >= 2, (
+            f"Expected at least 2 empty switches on controller_2, got {len(c2_empty_ids)}"
+        )
+        assert "controller_2" in c2_empty_ids, "First should be controller_2"
+        assert "controller_2_2" in c2_empty_ids, "Second should be controller_2_2"
+
+        # Main device empty switches
+        main_empty_ids = sorted([s.object_id for s in main_empty_switches])
+        assert len(main_empty_ids) >= 3, (
+            f"Expected at least 3 empty switches on main device, got {len(main_empty_ids)}"
+        )
+        assert "duplicate-entities-test" in main_empty_ids
+        assert "duplicate-entities-test_2" in main_empty_ids
+        assert "duplicate-entities-test_3" in main_empty_ids
+
+        # Scenario 8: Check "xyz" duplicates (Issue #6953)
+        xyz_switches = [s for s in switches if s.name == "xyz"]
+        xyz_ids = sorted([s.object_id for s in xyz_switches])
+
+        assert len(xyz_ids) >= 3, (
+            f"Expected at least 3 xyz switches, got {len(xyz_ids)}"
+        )
+        assert "xyz" in xyz_ids, "First xyz switch should be xyz"
+        assert "xyz_2" in xyz_ids, "Second xyz switch should be xyz_2"
+        assert "xyz_3" in xyz_ids, "Third xyz switch should be xyz_3"
+
         # Verify we can get states for all entities (ensures they're functional)
         loop = asyncio.get_running_loop()
         states_future: asyncio.Future[bool] = loop.create_future()
diff --git a/tests/unit_tests/test_duplicate_entities.py b/tests/unit_tests/test_duplicate_entities.py
deleted file mode 100644
index ab075a02fc..0000000000
--- a/tests/unit_tests/test_duplicate_entities.py
+++ /dev/null
@@ -1,129 +0,0 @@
-"""Test duplicate entity object ID handling."""
-
-import pytest
-
-from esphome.core import CORE
-from esphome.helpers import sanitize, snake_case
-
-
-@pytest.fixture
-def setup_test_device() -> None:
-    """Set up test device configuration."""
-    CORE.name = "test-device"
-    CORE.friendly_name = "Test Device"
-
-
-def test_unique_key_generation() -> None:
-    """Test that unique keys are generated correctly."""
-    # Test with no device
-    key1: tuple[int, str, str] = (0, "binary_sensor", "temperature")
-    assert key1 == (0, "binary_sensor", "temperature")
-
-    # Test with device
-    key2: tuple[int, str, str] = (12345, "sensor", "humidity")
-    assert key2 == (12345, "sensor", "humidity")
-
-
-def test_duplicate_tracking() -> None:
-    """Test that duplicates are tracked correctly."""
-    # First occurrence
-    key: tuple[int, str, str] = (0, "sensor", "temperature")
-    assert key not in CORE.unique_ids
-
-    CORE.unique_ids[key] = 1
-    assert CORE.unique_ids[key] == 1
-
-    # Second occurrence
-    count: int = CORE.unique_ids[key] + 1
-    CORE.unique_ids[key] = count
-    assert CORE.unique_ids[key] == 2
-
-
-def test_object_id_sanitization() -> None:
-    """Test that object IDs are properly sanitized."""
-    # Test various inputs
-    assert sanitize(snake_case("Temperature Sensor")) == "temperature_sensor"
-    assert sanitize(snake_case("Living Room Light!")) == "living_room_light_"
-    assert sanitize(snake_case("Test-Device")) == "test-device"
-    assert sanitize(snake_case("")) == ""
-
-
-def test_suffix_generation() -> None:
-    """Test that suffixes are generated correctly."""
-    base_id: str = "temperature"
-
-    # No suffix for first occurrence
-    object_id_1: str = base_id
-    assert object_id_1 == "temperature"
-
-    # Add suffix for duplicates
-    count: int = 2
-    object_id_2: str = f"{base_id}_{count}"
-    assert object_id_2 == "temperature_2"
-
-    count = 3
-    object_id_3: str = f"{base_id}_{count}"
-    assert object_id_3 == "temperature_3"
-
-
-def test_different_platforms_same_name() -> None:
-    """Test that same name on different platforms doesn't conflict."""
-    # Simulate two entities with same name on different platforms
-    key1: tuple[int, str, str] = (0, "binary_sensor", "status")
-    key2: tuple[int, str, str] = (0, "text_sensor", "status")
-
-    # They should be different keys
-    assert key1 != key2
-
-    # Track them separately
-    CORE.unique_ids[key1] = 1
-    CORE.unique_ids[key2] = 1
-
-    # Both should be at count 1 (no conflict)
-    assert CORE.unique_ids[key1] == 1
-    assert CORE.unique_ids[key2] == 1
-
-
-def test_different_devices_same_name_platform() -> None:
-    """Test that same name+platform on different devices doesn't conflict."""
-    # Simulate two entities with same name and platform but different devices
-    key1: tuple[int, str, str] = (12345, "sensor", "temperature")
-    key2: tuple[int, str, str] = (67890, "sensor", "temperature")
-
-    # They should be different keys
-    assert key1 != key2
-
-    # Track them separately
-    CORE.unique_ids[key1] = 1
-    CORE.unique_ids[key2] = 1
-
-    # Both should be at count 1 (no conflict)
-    assert CORE.unique_ids[key1] == 1
-    assert CORE.unique_ids[key2] == 1
-
-
-def test_empty_name_handling(setup_test_device: None) -> None:
-    """Test handling of entities with empty names."""
-    # When name is empty, it should use the device name
-    empty_name: str = ""
-    base_id: str
-    if not empty_name:
-        if CORE.friendly_name:
-            base_id = sanitize(snake_case(CORE.friendly_name))
-        else:
-            base_id = sanitize(snake_case(CORE.name))
-
-    assert base_id == "test_device"  # Uses friendly name
-
-
-def test_reset_clears_unique_ids() -> None:
-    """Test that CORE.reset() clears the unique_ids tracking."""
-    # Add some tracked IDs
-    CORE.unique_ids[(0, "sensor", "test")] = 2
-    CORE.unique_ids[(0, "binary_sensor", "test")] = 3
-
-    assert len(CORE.unique_ids) == 2
-
-    # Reset should clear them
-    CORE.reset()
-    assert len(CORE.unique_ids) == 0
diff --git a/tests/unit_tests/test_entity.py b/tests/unit_tests/test_entity.py
new file mode 100644
index 0000000000..6cdf5369ae
--- /dev/null
+++ b/tests/unit_tests/test_entity.py
@@ -0,0 +1,590 @@
+"""Test get_base_entity_object_id function matches C++ behavior."""
+
+from collections.abc import Generator
+from typing import Any
+
+import pytest
+
+from esphome import entity
+from esphome.const import CONF_DEVICE_ID, CONF_DISABLED_BY_DEFAULT, CONF_ICON, CONF_NAME
+from esphome.core import CORE, ID
+from esphome.cpp_generator import MockObj
+from esphome.entity import get_base_entity_object_id, setup_entity
+from esphome.helpers import sanitize, snake_case
+
+
+@pytest.fixture(autouse=True)
+def restore_core_state() -> Generator[None, None, None]:
+    """Save and restore CORE state for tests."""
+    original_name = CORE.name
+    original_friendly_name = CORE.friendly_name
+    yield
+    CORE.name = original_name
+    CORE.friendly_name = original_friendly_name
+
+
+def test_with_entity_name() -> None:
+    """Test when entity has its own name - should use entity name."""
+    # Simple name
+    assert get_base_entity_object_id("Temperature Sensor", None) == "temperature_sensor"
+    assert (
+        get_base_entity_object_id("Temperature Sensor", "Device Name")
+        == "temperature_sensor"
+    )
+    # Even with device name, entity name takes precedence
+    assert (
+        get_base_entity_object_id("Temperature Sensor", "Device Name", "Sub Device")
+        == "temperature_sensor"
+    )
+
+    # Name with special characters
+    assert (
+        get_base_entity_object_id("Temp!@#$%^&*()Sensor", None)
+        == "temp__________sensor"
+    )
+    assert get_base_entity_object_id("Temp-Sensor_123", None) == "temp-sensor_123"
+
+    # Already snake_case
+    assert get_base_entity_object_id("temperature_sensor", None) == "temperature_sensor"
+
+    # Mixed case
+    assert get_base_entity_object_id("TemperatureSensor", None) == "temperaturesensor"
+    assert get_base_entity_object_id("TEMPERATURE SENSOR", None) == "temperature_sensor"
+
+
+def test_empty_name_with_device_name() -> None:
+    """Test when entity has empty name and is on a sub-device - should use device name."""
+    # C++ behavior: when has_own_name is false and device is set, uses device->get_name()
+    assert (
+        get_base_entity_object_id("", "Friendly Device", "Sub Device 1")
+        == "sub_device_1"
+    )
+    assert (
+        get_base_entity_object_id("", "Kitchen Controller", "controller_1")
+        == "controller_1"
+    )
+    assert get_base_entity_object_id("", None, "Test-Device_123") == "test-device_123"
+
+
+def test_empty_name_with_friendly_name() -> None:
+    """Test when entity has empty name and no device - should use friendly name."""
+    # C++ behavior: when has_own_name is false, uses App.get_friendly_name()
+    assert get_base_entity_object_id("", "Friendly Device") == "friendly_device"
+    assert get_base_entity_object_id("", "Kitchen Controller") == "kitchen_controller"
+    assert get_base_entity_object_id("", "Test-Device_123") == "test-device_123"
+
+    # Special characters in friendly name
+    assert get_base_entity_object_id("", "Device!@#$%") == "device_____"
+
+
+def test_empty_name_no_friendly_name() -> None:
+    """Test when entity has empty name and no friendly name - should use device name."""
+    # Test with CORE.name set
+    CORE.name = "device-name"
+    assert get_base_entity_object_id("", None) == "device-name"
+
+    CORE.name = "Test Device"
+    assert get_base_entity_object_id("", None) == "test_device"
+
+
+def test_edge_cases() -> None:
+    """Test edge cases."""
+    # Only spaces
+    assert get_base_entity_object_id("   ", None) == "___"
+
+    # Unicode characters (should be replaced)
+    assert get_base_entity_object_id("Température", None) == "temp_rature"
+    assert get_base_entity_object_id("测试", None) == "__"
+
+    # Empty string with empty friendly name (empty friendly name is treated as None)
+    # Falls back to CORE.name
+    CORE.name = "device"
+    assert get_base_entity_object_id("", "") == "device"
+
+    # Very long name (should work fine)
+    long_name = "a" * 100 + " " + "b" * 100
+    expected = "a" * 100 + "_" + "b" * 100
+    assert get_base_entity_object_id(long_name, None) == expected
+
+
+def test_matches_cpp_helpers() -> None:
+    """Test that the logic matches using snake_case and sanitize directly."""
+    test_cases = [
+        ("Temperature Sensor", "temperature_sensor"),
+        ("Living Room Light", "living_room_light"),
+        ("Test-Device_123", "test-device_123"),
+        ("Special!@#Chars", "special___chars"),
+        ("UPPERCASE NAME", "uppercase_name"),
+        ("lowercase name", "lowercase_name"),
+        ("Mixed Case Name", "mixed_case_name"),
+        ("   Spaces   ", "___spaces___"),
+    ]
+
+    for name, expected in test_cases:
+        # For non-empty names, verify our function produces same result as direct snake_case + sanitize
+        assert get_base_entity_object_id(name, None) == sanitize(snake_case(name))
+        assert get_base_entity_object_id(name, None) == expected
+
+    # Empty name is handled specially - it doesn't just use sanitize(snake_case(""))
+    # Instead it falls back to friendly_name or CORE.name
+    assert sanitize(snake_case("")) == ""  # Direct conversion gives empty string
+    # But our function returns a fallback
+    CORE.name = "device"
+    assert get_base_entity_object_id("", None) == "device"  # Uses device name
+
+
+def test_name_add_mac_suffix_behavior() -> None:
+    """Test behavior related to name_add_mac_suffix.
+
+    In C++, when name_add_mac_suffix is enabled and entity has no name,
+    get_object_id() returns str_sanitize(str_snake_case(App.get_friendly_name()))
+    dynamically. Our function always returns the same result since we're
+    calculating the base for duplicate tracking.
+    """
+    # The function should always return the same result regardless of
+    # name_add_mac_suffix setting, as we're calculating the base object_id
+    assert get_base_entity_object_id("", "Test Device") == "test_device"
+    assert get_base_entity_object_id("Entity Name", "Test Device") == "entity_name"
+
+
+def test_priority_order() -> None:
+    """Test the priority order: entity name > device name > friendly name > CORE.name."""
+    CORE.name = "core-device"
+
+    # 1. Entity name has highest priority
+    assert (
+        get_base_entity_object_id("Entity Name", "Friendly Name", "Device Name")
+        == "entity_name"
+    )
+
+    # 2. Device name is next priority (when entity name is empty)
+    assert (
+        get_base_entity_object_id("", "Friendly Name", "Device Name") == "device_name"
+    )
+
+    # 3. Friendly name is next (when entity and device names are empty)
+    assert get_base_entity_object_id("", "Friendly Name", None) == "friendly_name"
+
+    # 4. CORE.name is last resort
+    assert get_base_entity_object_id("", None, None) == "core-device"
+
+
+def test_real_world_examples() -> None:
+    """Test real-world entity naming scenarios."""
+    # Common ESPHome entity names
+    test_cases = [
+        # name, friendly_name, device_name, expected
+        ("Living Room Light", None, None, "living_room_light"),
+        ("", "Kitchen Controller", None, "kitchen_controller"),
+        (
+            "",
+            "ESP32 Device",
+            "controller_1",
+            "controller_1",
+        ),  # Device name takes precedence
+        ("GPIO2 Button", None, None, "gpio2_button"),
+        ("WiFi Signal", "My Device", None, "wifi_signal"),
+        ("", None, "esp32_node", "esp32_node"),
+        ("Front Door Sensor", "Home Assistant", "door_controller", "front_door_sensor"),
+    ]
+
+    for name, friendly_name, device_name, expected in test_cases:
+        result = get_base_entity_object_id(name, friendly_name, device_name)
+        assert result == expected, (
+            f"Failed for {name=}, {friendly_name=}, {device_name=}: {result=}, {expected=}"
+        )
+
+
+def test_issue_6953_scenarios() -> None:
+    """Test specific scenarios from issue #6953."""
+    # Scenario 1: Multiple empty names on main device with name_add_mac_suffix
+    # The Python code calculates the base, C++ might append MAC suffix dynamically
+    CORE.name = "device-name"
+    CORE.friendly_name = "Friendly Device"
+
+    # All empty names should resolve to same base
+    assert get_base_entity_object_id("", CORE.friendly_name) == "friendly_device"
+    assert get_base_entity_object_id("", CORE.friendly_name) == "friendly_device"
+    assert get_base_entity_object_id("", CORE.friendly_name) == "friendly_device"
+
+    # Scenario 2: Empty names on sub-devices
+    assert (
+        get_base_entity_object_id("", "Main Device", "controller_1") == "controller_1"
+    )
+    assert (
+        get_base_entity_object_id("", "Main Device", "controller_2") == "controller_2"
+    )
+
+    # Scenario 3: xyz duplicates
+    assert get_base_entity_object_id("xyz", None) == "xyz"
+    assert get_base_entity_object_id("xyz", "Device") == "xyz"
+
+
+# Tests for setup_entity function
+
+
+@pytest.fixture
+def setup_test_environment() -> Generator[list[str], None, None]:
+    """Set up test environment for setup_entity tests."""
+    # Reset CORE state
+    CORE.reset()
+    CORE.name = "test-device"
+    CORE.friendly_name = "Test Device"
+    # Store original add function
+
+    original_add = entity.add
+    # Track what gets added
+    added_expressions = []
+
+    def mock_add(expression: Any) -> Any:
+        added_expressions.append(str(expression))
+        return original_add(expression)
+
+    # Patch add function in entity module
+    entity.add = mock_add
+    yield added_expressions
+    # Clean up
+    entity.add = original_add
+    CORE.reset()
+
+
+def extract_object_id_from_expressions(expressions: list[str]) -> str | None:
+    """Extract the object ID that was set from the generated expressions."""
+    for expr in expressions:
+        # Look for set_object_id calls
+        if ".set_object_id(" in expr:
+            # Extract the ID from something like: var.set_object_id("temperature_2")
+            start = expr.find('"') + 1
+            end = expr.rfind('"')
+            if start > 0 and end > start:
+                return expr[start:end]
+    return None
+
+
+@pytest.mark.asyncio
+async def test_setup_entity_no_duplicates(setup_test_environment: list[str]) -> None:
+    """Test setup_entity with unique names."""
+
+    added_expressions = setup_test_environment
+
+    # Create mock entities
+    var1 = MockObj("sensor1")
+    var2 = MockObj("sensor2")
+
+    # Set up first entity
+    config1 = {
+        CONF_NAME: "Temperature",
+        CONF_DISABLED_BY_DEFAULT: False,
+    }
+    await setup_entity(var1, config1, "sensor")
+
+    # Get object ID from first entity
+    object_id1 = extract_object_id_from_expressions(added_expressions)
+    assert object_id1 == "temperature"
+
+    # Clear for next entity
+    added_expressions.clear()
+
+    # Set up second entity with different name
+    config2 = {
+        CONF_NAME: "Humidity",
+        CONF_DISABLED_BY_DEFAULT: False,
+    }
+    await setup_entity(var2, config2, "sensor")
+
+    # Get object ID from second entity
+    object_id2 = extract_object_id_from_expressions(added_expressions)
+    assert object_id2 == "humidity"
+
+
+@pytest.mark.asyncio
+async def test_setup_entity_with_duplicates(setup_test_environment: list[str]) -> None:
+    """Test setup_entity with duplicate names."""
+
+    added_expressions = setup_test_environment
+
+    # Create mock entities
+    entities = [MockObj(f"sensor{i}") for i in range(4)]
+
+    # Set up entities with same name
+    config = {
+        CONF_NAME: "Temperature",
+        CONF_DISABLED_BY_DEFAULT: False,
+    }
+
+    object_ids = []
+    for var in entities:
+        added_expressions.clear()
+        await setup_entity(var, config, "sensor")
+        object_id = extract_object_id_from_expressions(added_expressions)
+        object_ids.append(object_id)
+
+    # Check that object IDs were set with proper suffixes
+    assert object_ids[0] == "temperature"
+    assert object_ids[1] == "temperature_2"
+    assert object_ids[2] == "temperature_3"
+    assert object_ids[3] == "temperature_4"
+
+
+@pytest.mark.asyncio
+async def test_setup_entity_different_platforms(
+    setup_test_environment: list[str],
+) -> None:
+    """Test that same name on different platforms doesn't conflict."""
+
+    added_expressions = setup_test_environment
+
+    # Create mock entities
+    sensor = MockObj("sensor1")
+    binary_sensor = MockObj("binary_sensor1")
+    text_sensor = MockObj("text_sensor1")
+
+    config = {
+        CONF_NAME: "Status",
+        CONF_DISABLED_BY_DEFAULT: False,
+    }
+
+    # Set up entities on different platforms
+    platforms = [
+        (sensor, "sensor"),
+        (binary_sensor, "binary_sensor"),
+        (text_sensor, "text_sensor"),
+    ]
+
+    object_ids = []
+    for var, platform in platforms:
+        added_expressions.clear()
+        await setup_entity(var, config, platform)
+        object_id = extract_object_id_from_expressions(added_expressions)
+        object_ids.append(object_id)
+
+    # All should get base object ID without suffix
+    assert all(obj_id == "status" for obj_id in object_ids)
+
+
+@pytest.mark.asyncio
+async def test_setup_entity_with_devices(setup_test_environment: list[str]) -> None:
+    """Test that same name on different devices doesn't conflict."""
+
+    added_expressions = setup_test_environment
+
+    # Create mock devices
+    device1_id = ID("device1", type="Device")
+    device2_id = ID("device2", type="Device")
+
+    device1 = MockObj("device1_obj")
+    device2 = MockObj("device2_obj")
+
+    # Mock get_variable to return our devices
+    original_get_variable = entity.get_variable
+
+    async def mock_get_variable(device_id: ID) -> MockObj:
+        if device_id == device1_id:
+            return device1
+        elif device_id == device2_id:
+            return device2
+        return await original_get_variable(device_id)
+
+    entity.get_variable = mock_get_variable
+
+    try:
+        # Create sensors with same name on different devices
+        sensor1 = MockObj("sensor1")
+        sensor2 = MockObj("sensor2")
+
+        config1 = {
+            CONF_NAME: "Temperature",
+            CONF_DEVICE_ID: device1_id,
+            CONF_DISABLED_BY_DEFAULT: False,
+        }
+
+        config2 = {
+            CONF_NAME: "Temperature",
+            CONF_DEVICE_ID: device2_id,
+            CONF_DISABLED_BY_DEFAULT: False,
+        }
+
+        # Get object IDs
+        object_ids = []
+        for var, config in [(sensor1, config1), (sensor2, config2)]:
+            added_expressions.clear()
+            await setup_entity(var, config, "sensor")
+            object_id = extract_object_id_from_expressions(added_expressions)
+            object_ids.append(object_id)
+
+        # Both should get base object ID without suffix (different devices)
+        assert object_ids[0] == "temperature"
+        assert object_ids[1] == "temperature"
+
+    finally:
+        entity.get_variable = original_get_variable
+
+
+@pytest.mark.asyncio
+async def test_setup_entity_empty_name(setup_test_environment: list[str]) -> None:
+    """Test setup_entity with empty entity name."""
+
+    added_expressions = setup_test_environment
+
+    var = MockObj("sensor1")
+
+    config = {
+        CONF_NAME: "",
+        CONF_DISABLED_BY_DEFAULT: False,
+    }
+
+    await setup_entity(var, config, "sensor")
+
+    object_id = extract_object_id_from_expressions(added_expressions)
+    # Should use friendly name
+    assert object_id == "test_device"
+
+
+@pytest.mark.asyncio
+async def test_setup_entity_empty_name_duplicates(
+    setup_test_environment: list[str],
+) -> None:
+    """Test setup_entity with multiple empty names."""
+
+    added_expressions = setup_test_environment
+
+    entities = [MockObj(f"sensor{i}") for i in range(3)]
+
+    config = {
+        CONF_NAME: "",
+        CONF_DISABLED_BY_DEFAULT: False,
+    }
+
+    object_ids = []
+    for var in entities:
+        added_expressions.clear()
+        await setup_entity(var, config, "sensor")
+        object_id = extract_object_id_from_expressions(added_expressions)
+        object_ids.append(object_id)
+
+    # Should use device name with suffixes
+    assert object_ids[0] == "test_device"
+    assert object_ids[1] == "test_device_2"
+    assert object_ids[2] == "test_device_3"
+
+
+@pytest.mark.asyncio
+async def test_setup_entity_special_characters(
+    setup_test_environment: list[str],
+) -> None:
+    """Test setup_entity with names containing special characters."""
+
+    added_expressions = setup_test_environment
+
+    entities = [MockObj(f"sensor{i}") for i in range(3)]
+
+    config = {
+        CONF_NAME: "Temperature Sensor!",
+        CONF_DISABLED_BY_DEFAULT: False,
+    }
+
+    object_ids = []
+    for var in entities:
+        added_expressions.clear()
+        await setup_entity(var, config, "sensor")
+        object_id = extract_object_id_from_expressions(added_expressions)
+        object_ids.append(object_id)
+
+    # Special characters should be sanitized
+    assert object_ids[0] == "temperature_sensor_"
+    assert object_ids[1] == "temperature_sensor__2"
+    assert object_ids[2] == "temperature_sensor__3"
+
+
+@pytest.mark.asyncio
+async def test_setup_entity_with_icon(setup_test_environment: list[str]) -> None:
+    """Test setup_entity sets icon correctly."""
+
+    added_expressions = setup_test_environment
+
+    var = MockObj("sensor1")
+
+    config = {
+        CONF_NAME: "Temperature",
+        CONF_DISABLED_BY_DEFAULT: False,
+        CONF_ICON: "mdi:thermometer",
+    }
+
+    await setup_entity(var, config, "sensor")
+
+    # Check icon was set
+    icon_set = any(
+        ".set_icon(" in expr and "mdi:thermometer" in expr for expr in added_expressions
+    )
+    assert icon_set
+
+
+@pytest.mark.asyncio
+async def test_setup_entity_disabled_by_default(
+    setup_test_environment: list[str],
+) -> None:
+    """Test setup_entity sets disabled_by_default correctly."""
+
+    added_expressions = setup_test_environment
+
+    var = MockObj("sensor1")
+
+    config = {
+        CONF_NAME: "Temperature",
+        CONF_DISABLED_BY_DEFAULT: True,
+    }
+
+    await setup_entity(var, config, "sensor")
+
+    # Check disabled_by_default was set
+    disabled_set = any(
+        ".set_disabled_by_default(true)" in expr.lower() for expr in added_expressions
+    )
+    assert disabled_set
+
+
+@pytest.mark.asyncio
+async def test_setup_entity_mixed_duplicates(setup_test_environment: list[str]) -> None:
+    """Test complex duplicate scenario with multiple platforms and devices."""
+
+    added_expressions = setup_test_environment
+
+    # Track results
+    results = []
+
+    # 3 sensors named "Status"
+    for i in range(3):
+        added_expressions.clear()
+        var = MockObj(f"sensor_status_{i}")
+        await setup_entity(
+            var, {CONF_NAME: "Status", CONF_DISABLED_BY_DEFAULT: False}, "sensor"
+        )
+        object_id = extract_object_id_from_expressions(added_expressions)
+        results.append(("sensor", object_id))
+
+    # 2 binary_sensors named "Status"
+    for i in range(2):
+        added_expressions.clear()
+        var = MockObj(f"binary_sensor_status_{i}")
+        await setup_entity(
+            var, {CONF_NAME: "Status", CONF_DISABLED_BY_DEFAULT: False}, "binary_sensor"
+        )
+        object_id = extract_object_id_from_expressions(added_expressions)
+        results.append(("binary_sensor", object_id))
+
+    # 1 text_sensor named "Status"
+    added_expressions.clear()
+    var = MockObj("text_sensor_status")
+    await setup_entity(
+        var, {CONF_NAME: "Status", CONF_DISABLED_BY_DEFAULT: False}, "text_sensor"
+    )
+    object_id = extract_object_id_from_expressions(added_expressions)
+    results.append(("text_sensor", object_id))
+
+    # Check results - each platform has its own namespace
+    assert results[0] == ("sensor", "status")  # sensor
+    assert results[1] == ("sensor", "status_2")  # sensor
+    assert results[2] == ("sensor", "status_3")  # sensor
+    assert results[3] == ("binary_sensor", "status")  # binary_sensor (new namespace)
+    assert results[4] == ("binary_sensor", "status_2")  # binary_sensor
+    assert results[5] == ("text_sensor", "status")  # text_sensor (new namespace)
diff --git a/tests/unit_tests/test_get_base_entity_object_id.py b/tests/unit_tests/test_get_base_entity_object_id.py
deleted file mode 100644
index aeea862d78..0000000000
--- a/tests/unit_tests/test_get_base_entity_object_id.py
+++ /dev/null
@@ -1,140 +0,0 @@
-"""Test get_base_entity_object_id function matches C++ behavior."""
-
-from esphome.core import CORE
-from esphome.entity import get_base_entity_object_id
-from esphome.helpers import sanitize, snake_case
-
-
-class TestGetBaseEntityObjectId:
-    """Test that get_base_entity_object_id matches C++ EntityBase::get_object_id behavior."""
-
-    def test_with_entity_name(self) -> None:
-        """Test when entity has its own name - should use entity name."""
-        # Simple name
-        assert (
-            get_base_entity_object_id("Temperature Sensor", None)
-            == "temperature_sensor"
-        )
-        assert (
-            get_base_entity_object_id("Temperature Sensor", "Device Name")
-            == "temperature_sensor"
-        )
-
-        # Name with special characters
-        assert (
-            get_base_entity_object_id("Temp!@#$%^&*()Sensor", None)
-            == "temp__________sensor"
-        )
-        assert get_base_entity_object_id("Temp-Sensor_123", None) == "temp-sensor_123"
-
-        # Already snake_case
-        assert (
-            get_base_entity_object_id("temperature_sensor", None)
-            == "temperature_sensor"
-        )
-
-        # Mixed case
-        assert (
-            get_base_entity_object_id("TemperatureSensor", None) == "temperaturesensor"
-        )
-        assert (
-            get_base_entity_object_id("TEMPERATURE SENSOR", None)
-            == "temperature_sensor"
-        )
-
-    def test_empty_name_with_friendly_name(self) -> None:
-        """Test when entity has empty name - should use friendly name."""
-        # C++ behavior: when has_own_name is false, uses App.get_friendly_name()
-        assert get_base_entity_object_id("", "Friendly Device") == "friendly_device"
-        assert (
-            get_base_entity_object_id("", "Kitchen Controller") == "kitchen_controller"
-        )
-        assert get_base_entity_object_id("", "Test-Device_123") == "test-device_123"
-
-        # Special characters in friendly name
-        assert get_base_entity_object_id("", "Device!@#$%") == "device_____"
-
-    def test_empty_name_no_friendly_name(self) -> None:
-        """Test when entity has empty name and no friendly name - should use device name."""
-        # Save original values
-        original_name = getattr(CORE, "name", None)
-
-        try:
-            # Test with CORE.name set
-            CORE.name = "device-name"
-            assert get_base_entity_object_id("", None) == "device-name"
-
-            CORE.name = "Test Device"
-            assert get_base_entity_object_id("", None) == "test_device"
-
-        finally:
-            # Restore original value
-            if original_name is not None:
-                CORE.name = original_name
-
-    def test_edge_cases(self) -> None:
-        """Test edge cases."""
-        # Only spaces
-        assert get_base_entity_object_id("   ", None) == "___"
-
-        # Unicode characters (should be replaced)
-        assert get_base_entity_object_id("Température", None) == "temp_rature"
-        assert get_base_entity_object_id("测试", None) == "__"
-
-        # Empty string with empty friendly name (empty friendly name is treated as None)
-        # Falls back to CORE.name
-        original_name = getattr(CORE, "name", None)
-        try:
-            CORE.name = "device"
-            assert get_base_entity_object_id("", "") == "device"
-        finally:
-            if original_name is not None:
-                CORE.name = original_name
-
-        # Very long name (should work fine)
-        long_name = "a" * 100 + " " + "b" * 100
-        expected = "a" * 100 + "_" + "b" * 100
-        assert get_base_entity_object_id(long_name, None) == expected
-
-    def test_matches_cpp_helpers(self) -> None:
-        """Test that the logic matches using snake_case and sanitize directly."""
-        test_cases = [
-            ("Temperature Sensor", "temperature_sensor"),
-            ("Living Room Light", "living_room_light"),
-            ("Test-Device_123", "test-device_123"),
-            ("Special!@#Chars", "special___chars"),
-            ("UPPERCASE NAME", "uppercase_name"),
-            ("lowercase name", "lowercase_name"),
-            ("Mixed Case Name", "mixed_case_name"),
-            ("   Spaces   ", "___spaces___"),
-        ]
-
-        for name, expected in test_cases:
-            # For non-empty names, verify our function produces same result as direct snake_case + sanitize
-            assert get_base_entity_object_id(name, None) == sanitize(snake_case(name))
-            assert get_base_entity_object_id(name, None) == expected
-
-        # Empty name is handled specially - it doesn't just use sanitize(snake_case(""))
-        # Instead it falls back to friendly_name or CORE.name
-        assert sanitize(snake_case("")) == ""  # Direct conversion gives empty string
-        # But our function returns a fallback
-        original_name = getattr(CORE, "name", None)
-        try:
-            CORE.name = "device"
-            assert get_base_entity_object_id("", None) == "device"  # Uses device name
-        finally:
-            if original_name is not None:
-                CORE.name = original_name
-
-    def test_name_add_mac_suffix_behavior(self) -> None:
-        """Test behavior related to name_add_mac_suffix.
-
-        In C++, when name_add_mac_suffix is enabled and entity has no name,
-        get_object_id() returns str_sanitize(str_snake_case(App.get_friendly_name()))
-        dynamically. Our function always returns the same result since we're
-        calculating the base for duplicate tracking.
-        """
-        # The function should always return the same result regardless of
-        # name_add_mac_suffix setting, as we're calculating the base object_id
-        assert get_base_entity_object_id("", "Test Device") == "test_device"
-        assert get_base_entity_object_id("Entity Name", "Test Device") == "entity_name"