diff --git a/src/wallet/rpcwallet.cpp b/src/wallet/rpcwallet.cpp
--- a/src/wallet/rpcwallet.cpp
+++ b/src/wallet/rpcwallet.cpp
@@ -3314,6 +3314,7 @@
 
     DatabaseOptions options;
     DatabaseStatus status;
+    options.require_create = true;
     options.create_flags = flags;
     options.create_passphrase = passphrase;
     bilingual_str error;
diff --git a/src/wallet/wallet.cpp b/src/wallet/wallet.cpp
--- a/src/wallet/wallet.cpp
+++ b/src/wallet/wallet.cpp
@@ -291,15 +291,6 @@
         wallet_creation_flags |= WALLET_FLAG_BLANK_WALLET;
     }
 
-    // Check the wallet file location
-    if (fs::symlink_status(
-            fs::absolute(name.empty() ? "wallet.dat" : name, GetWalletDir()))
-            .type() != fs::file_not_found) {
-        error = strprintf(Untranslated("Wallet %s already exists."), name);
-        status = DatabaseStatus::FAILED_CREATE;
-        return nullptr;
-    }
-
     // Wallet::Verify will check if we're trying to create a wallet with a
     // duplicate name.
     std::unique_ptr<WalletDatabase> database =
diff --git a/test/functional/wallet_multiwallet.py b/test/functional/wallet_multiwallet.py
--- a/test/functional/wallet_multiwallet.py
+++ b/test/functional/wallet_multiwallet.py
@@ -348,8 +348,12 @@
         self.log.info("Test dynamic wallet creation.")
 
         # Fail to create a wallet if it already exists.
-        assert_raises_rpc_error(-4, "Wallet w2 already exists.",
-                                self.nodes[0].createwallet, 'w2')
+        path = os.path.join(self.options.tmpdir, "node0", "regtest",
+                            "wallets", "w2")
+        assert_raises_rpc_error(
+            -4,
+            f"Failed to create database path '{path}'. Database already exists.",
+            self.nodes[0].createwallet, 'w2')
 
         # Successfully create a wallet with a new name
         loadwallet_name = self.nodes[0].createwallet('w9')