diff --git a/extensions/zalouser/src/text-styles.test.ts b/extensions/zalouser/src/text-styles.test.ts
index 1e17a433541..987667d1193 100644
--- a/extensions/zalouser/src/text-styles.test.ts
+++ b/extensions/zalouser/src/text-styles.test.ts
@@ -62,6 +62,20 @@ describe("parseZalouserTextStyles", () => {
     });
   });
 
+  it("treats quoted backtick fences as literal code blocks", () => {
+    expect(parseZalouserTextStyles("> ```js\n> *cmd*\n> ```")).toEqual({
+      text: "*cmd*",
+      styles: [],
+    });
+  });
+
+  it("treats quoted tilde fences as literal code blocks", () => {
+    expect(parseZalouserTextStyles("> ~~~\n> *cmd*\n> ~~~")).toEqual({
+      text: "*cmd*",
+      styles: [],
+    });
+  });
+
   it("keeps unmatched fences literal", () => {
     expect(parseZalouserTextStyles("```python")).toEqual({
       text: "```python",
diff --git a/extensions/zalouser/src/text-styles.ts b/extensions/zalouser/src/text-styles.ts
index 82f4d96b278..093c9e2f23b 100644
--- a/extensions/zalouser/src/text-styles.ts
+++ b/extensions/zalouser/src/text-styles.ts
@@ -106,7 +106,8 @@ export function parseZalouserTextStyles(input: string): { text: string; styles:
 
   for (let lineIndex = 0; lineIndex < lines.length; lineIndex += 1) {
     let line = lines[lineIndex];
-    let baseIndent = 0;
+    let { text: unquotedLine, indent: baseIndent } = stripQuotePrefix(line);
+    line = unquotedLine;
 
     const fence = parseFenceMarker(line);
     if (fence) {
@@ -148,12 +149,6 @@ export function parseZalouserTextStyles(input: string): { text: string; styles:
       continue;
     }
 
-    const quoteMatch = line.match(/^(>+)\s?(.*)$/);
-    if (quoteMatch) {
-      baseIndent = Math.min(5, quoteMatch[1].length);
-      line = quoteMatch[2];
-    }
-
     const indentMatch = line.match(/^(\s+)(.*)$/);
     let indentLevel = 0;
     let content = line;
@@ -295,13 +290,24 @@ function clampIndent(spaceCount: number): number {
 
 function hasClosingFence(lines: string[], startIndex: number, fence: FenceMarker): boolean {
   for (let index = startIndex; index < lines.length; index += 1) {
-    if (isClosingFence(lines[index], fence)) {
+    if (isClosingFence(stripQuotePrefix(lines[index]).text, fence)) {
       return true;
     }
   }
   return false;
 }
 
+function stripQuotePrefix(line: string): { text: string; indent: number } {
+  const match = line.match(/^(>+)\s?(.*)$/);
+  if (!match) {
+    return { text: line, indent: 0 };
+  }
+  return {
+    text: match[2],
+    indent: Math.min(5, match[1].length),
+  };
+}
+
 function parseFenceMarker(line: string): FenceMarker | null {
   const match = line.match(/^([ ]{0,3})(`{3,}|~{3,})(.*)$/);
   if (!match) {