diff --git a/esphome/__main__.py b/esphome/__main__.py
index 9dcc5cdfe8..be4551f6b5 100644
--- a/esphome/__main__.py
+++ b/esphome/__main__.py
@@ -1003,8 +1003,8 @@ def parse_args(argv):
         default=[],
     )
     options_parser.add_argument(
-        "--ignore-pin-conflicts",
-        help="Disable pin conflict validation (for testing grouped components)",
+        "--testing-mode",
+        help="Enable testing mode (disables validation checks for grouped component testing)",
         action="store_true",
         default=False,
     )
@@ -1266,7 +1266,7 @@ def run_esphome(argv):
 
     args = parse_args(argv)
     CORE.dashboard = args.dashboard
-    CORE.ignore_pin_conflicts = args.ignore_pin_conflicts
+    CORE.testing_mode = args.testing_mode
 
     # Create address cache from command-line arguments
     CORE.address_cache = AddressCache.from_cli_args(
diff --git a/esphome/core/__init__.py b/esphome/core/__init__.py
index 744e32abf8..43febd28a2 100644
--- a/esphome/core/__init__.py
+++ b/esphome/core/__init__.py
@@ -529,8 +529,8 @@ class EsphomeCore:
         self.dashboard = False
         # True if command is run from vscode api
         self.vscode = False
-        # True if pin conflict validation should be ignored
-        self.ignore_pin_conflicts = False
+        # True if running in testing mode (disables validation checks for grouped testing)
+        self.testing_mode = False
         # The name of the node
         self.name: str | None = None
         # The friendly name of the node
diff --git a/esphome/core/entity_helpers.py b/esphome/core/entity_helpers.py
index e1b2a8264b..f0a04b4860 100644
--- a/esphome/core/entity_helpers.py
+++ b/esphome/core/entity_helpers.py
@@ -246,12 +246,15 @@ def entity_duplicate_validator(platform: str) -> Callable[[ConfigType], ConfigTy
                     "\n          to distinguish them"
                 )
 
-            raise cv.Invalid(
-                f"Duplicate {platform} entity with name '{entity_name}' found{device_prefix}. "
-                f"{conflict_msg}. "
-                "Each entity on a device must have a unique name within its platform."
-                f"{sanitized_msg}"
-            )
+            # Skip duplicate entity name validation when testing_mode is enabled
+            # This flag is used for grouped component testing
+            if not CORE.testing_mode:
+                raise cv.Invalid(
+                    f"Duplicate {platform} entity with name '{entity_name}' found{device_prefix}. "
+                    f"{conflict_msg}. "
+                    "Each entity on a device must have a unique name within its platform."
+                    f"{sanitized_msg}"
+                )
 
         # Store metadata about this entity
         entity_metadata: EntityMetadata = {
diff --git a/esphome/pins.py b/esphome/pins.py
index bcd554a720..9975bad12a 100644
--- a/esphome/pins.py
+++ b/esphome/pins.py
@@ -118,11 +118,7 @@ class PinRegistry(dict):
                         parent_config = fconf.get_config_for_path(parent_path)
                         final_val_fun(pin_config, parent_config)
                     allow_others = pin_config.get(CONF_ALLOW_OTHER_USES, False)
-                    if (
-                        count != 1
-                        and not allow_others
-                        and not CORE.ignore_pin_conflicts
-                    ):
+                    if count != 1 and not allow_others and not CORE.testing_mode:
                         raise cv.Invalid(
                             f"Pin {pin_config[CONF_NUMBER]} is used in multiple places"
                         )
diff --git a/script/test_build_components.py b/script/test_build_components.py
index da81465107..fa30b8f5be 100755
--- a/script/test_build_components.py
+++ b/script/test_build_components.py
@@ -9,7 +9,7 @@ Features:
 - Analyzes components for shared common bus configs
 - Groups compatible components together
 - Merges configs for grouped components
-- Uses --ignore-pin-conflicts for grouped tests
+- Uses --testing-mode for grouped tests
 - Maintains backward compatibility with single component testing
 """
 
@@ -119,7 +119,7 @@ def run_esphome_test(
     build_dir: Path,
     esphome_command: str,
     continue_on_fail: bool,
-    use_ignore_pin_conflicts: bool = False,
+    use_testing_mode: bool = False,
 ) -> bool:
     """Run esphome test for a single component.
 
@@ -132,7 +132,7 @@ def run_esphome_test(
         build_dir: Path to build directory
         esphome_command: ESPHome command (config/compile)
         continue_on_fail: Whether to continue on failure
-        use_ignore_pin_conflicts: Whether to use --ignore-pin-conflicts flag
+        use_testing_mode: Whether to use --testing-mode flag
 
     Returns:
         True if test passed, False otherwise
@@ -157,9 +157,9 @@ def run_esphome_test(
         "esphome",
     ]
 
-    # Add --ignore-pin-conflicts if needed (must be before subcommand)
-    if use_ignore_pin_conflicts:
-        cmd.append("--ignore-pin-conflicts")
+    # Add --testing-mode if needed (must be before subcommand)
+    if use_testing_mode:
+        cmd.append("--testing-mode")
 
     # Add substitutions
     cmd.extend(
@@ -184,8 +184,8 @@ def run_esphome_test(
 
     # Run command
     print(f"> [{component}] [{test_name}] [{platform_with_version}]")
-    if use_ignore_pin_conflicts:
-        print("  (using --ignore-pin-conflicts)")
+    if use_testing_mode:
+        print("  (using --testing-mode)")
 
     try:
         result = subprocess.run(cmd, check=not continue_on_fail)
@@ -248,12 +248,12 @@ def run_grouped_test(
     output_content = base_content.replace("$component_test_file", merged_ref)
     output_file.write_text(output_content)
 
-    # Build esphome command with --ignore-pin-conflicts
+    # Build esphome command with --testing-mode
     cmd = [
         sys.executable,
         "-m",
         "esphome",
-        "--ignore-pin-conflicts",  # Required for grouped tests
+        "--testing-mode",  # Required for grouped tests
         "-s",
         "component_name",
         group_name,
@@ -273,7 +273,7 @@ def run_grouped_test(
     # Run command
     components_str = ", ".join(components)
     print(f"> [GROUPED: {components_str}] [{platform_with_version}]")
-    print("  (using --ignore-pin-conflicts)")
+    print("  (using --testing-mode)")
 
     try:
         result = subprocess.run(cmd, check=not continue_on_fail)