diff --git a/packages/manager/.changeset/pr-13030-fixed-1761674529303.md b/packages/manager/.changeset/pr-13030-fixed-1761674529303.md
new file mode 100644
index 00000000000..19951a077c4
--- /dev/null
+++ b/packages/manager/.changeset/pr-13030-fixed-1761674529303.md
@@ -0,0 +1,5 @@
+---
+"@linode/manager": Fixed
+---
+
+IAM: Linodes without required permissions visible and selectable in Assign/Unassign Linodes selector ([#13030](https://github.com/linode/manager/pull/13030))
diff --git a/packages/manager/src/features/VPCs/VPCDetail/SubnetAssignLinodesDrawer.test.tsx b/packages/manager/src/features/VPCs/VPCDetail/SubnetAssignLinodesDrawer.test.tsx
index b744e8f27cb..a920de4eaea 100644
--- a/packages/manager/src/features/VPCs/VPCDetail/SubnetAssignLinodesDrawer.test.tsx
+++ b/packages/manager/src/features/VPCs/VPCDetail/SubnetAssignLinodesDrawer.test.tsx
@@ -17,6 +17,17 @@ const queryMocks = vi.hoisted(() => ({
   useFirewallSettingsQuery: vi.fn().mockReturnValue({}),
 }));
 
+const iamMocks = vi.hoisted(() => ({
+  usePermissions: vi.fn().mockReturnValue({ data: { update_vpc: true } }),
+  useQueryWithPermissions: vi.fn().mockReturnValue({
+    data: [],
+    isLoading: false,
+    error: null,
+    isError: false,
+    hasFiltered: false,
+  }),
+}));
+
 vi.mock('@linode/queries', async () => {
   const actual = await vi.importActual('@linode/queries');
   return {
@@ -25,6 +36,11 @@ vi.mock('@linode/queries', async () => {
   };
 });
 
+vi.mock('src/features/IAM/hooks/usePermissions', () => ({
+  usePermissions: iamMocks.usePermissions,
+  useQueryWithPermissions: iamMocks.useQueryWithPermissions,
+}));
+
 const props = {
   isFetching: false,
   onClose: vi.fn(),
@@ -48,6 +64,17 @@ describe('Subnet Assign Linodes Drawer', () => {
     region: props.vpcRegion,
   });
 
+  beforeEach(() => {
+    // Set up the default mock to return the linode
+    iamMocks.useQueryWithPermissions.mockReturnValue({
+      data: [linode],
+      isLoading: false,
+      error: null,
+      isError: false,
+      hasFiltered: false,
+    });
+  });
+
   server.use(
     http.get('*/linode/instances', () => {
       return HttpResponse.json(makeResourcePage([linode]));
diff --git a/packages/manager/src/features/VPCs/VPCDetail/SubnetAssignLinodesDrawer.tsx b/packages/manager/src/features/VPCs/VPCDetail/SubnetAssignLinodesDrawer.tsx
index ada602f3e86..c8ff57284f2 100644
--- a/packages/manager/src/features/VPCs/VPCDetail/SubnetAssignLinodesDrawer.tsx
+++ b/packages/manager/src/features/VPCs/VPCDetail/SubnetAssignLinodesDrawer.tsx
@@ -149,40 +149,44 @@ export const SubnetAssignLinodesDrawer = (
   const [allowPublicIPv6Access, setAllowPublicIPv6Access] =
     React.useState<boolean>(false);
 
-  const { data: permissions } = usePermissions('vpc', ['update_vpc'], vpcId);
-  // TODO: change update_linode to create_linode_config_profile_interface once it's available
-  // TODO: change delete_linode to delete_linode_config_profile_interface once it's available
-  // TODO: refactor useQueryWithPermissions once API filter is available
-  const { data: filteredLinodes } = useQueryWithPermissions<Linode>(
-    useAllLinodesQuery(),
-    'linode',
-    ['update_linode', 'delete_linode'],
+  // We only want the linodes from the same region as the VPC
+  const query = useAllLinodesQuery(
+    {},
+    {
+      region: vpcRegion,
+    },
     open
   );
 
-  const userCanAssignLinodes =
-    permissions?.update_vpc && filteredLinodes?.length > 0;
-
   const downloadCSV = async () => {
-    await getCSVData();
+    // getCSVData
+    await query.refetch();
     csvRef.current.link.click();
   };
 
-  // We only want the linodes from the same region as the VPC
-  const { data: linodes, refetch: getCSVData } = useAllLinodesQuery(
-    {},
-    {
-      region: vpcRegion,
-    }
-  );
+  const { data: permissions } = usePermissions('vpc', ['update_vpc'], vpcId);
+  // TODO: change update_linode to create_linode_config_profile_interface once it's available
+  // TODO: change delete_linode to delete_linode_config_profile_interface once it's available
+  // TODO: refactor useQueryWithPermissions once API filter is available
+  const { data: filteredLinodes, isLoading: isLoadingFilteredLinodes } =
+    useQueryWithPermissions<Linode>(
+      query,
+      'linode',
+      ['update_linode', 'delete_linode'],
+      open
+    );
 
+  const userCanAssignLinodes =
+    permissions?.update_vpc && filteredLinodes?.length > 0;
   // We need to filter to the linodes from this region that are not already
   // assigned to this subnet
   const findUnassignedLinodes = React.useCallback(() => {
-    return linodes?.filter((linode) => {
+    if (!filteredLinodes) return [];
+
+    return filteredLinodes?.filter((linode) => {
       return !subnet?.linodes.some((linodeInfo) => linodeInfo.id === linode.id);
     });
-  }, [subnet, linodes]);
+  }, [subnet, filteredLinodes]);
 
   const [linodeOptionsToAssign, setLinodeOptionsToAssign] = React.useState<
     Linode[]
@@ -192,10 +196,10 @@ export const SubnetAssignLinodesDrawer = (
   // and update that list whenever this subnet or the list of all linodes in this subnet's region changes. This takes
   // care of the MUI invalid value warning that was occurring before in the Linodes autocomplete [M3-6752]
   React.useEffect(() => {
-    if (linodes) {
+    if (filteredLinodes) {
       setLinodeOptionsToAssign(findUnassignedLinodes() ?? []);
     }
-  }, [linodes, setLinodeOptionsToAssign, findUnassignedLinodes]);
+  }, [filteredLinodes, setLinodeOptionsToAssign, findUnassignedLinodes]);
 
   // Determine the configId based on the number of configurations
   function getConfigId(inputs: {
@@ -551,7 +555,7 @@ export const SubnetAssignLinodesDrawer = (
         try {
           const data = await getAllLinodeConfigs(linode.id);
           setLinodeConfigs(data);
-        } catch (errors) {
+        } catch {
           // force error to appear at top of drawer
           setAssignLinodesErrors({
             none: 'Could not load configurations for selected linode',
@@ -585,7 +589,7 @@ export const SubnetAssignLinodesDrawer = (
   return (
     <Drawer
       error={subnetError}
-      isFetching={isFetching}
+      isFetching={isFetching || isLoadingFilteredLinodes}
       onClose={handleOnClose}
       open={open}
       title={`Assign Linodes to subnet: ${subnet?.label ?? 'Unknown'}`}