diff --git a/src/sim_step.c b/src/sim_step.c
index 48d7877c..9971bd4f 100644
--- a/src/sim_step.c
+++ b/src/sim_step.c
@@ -406,34 +406,43 @@ INTERNAL void test_generate_walls(struct sim_snapshot *world)
     struct temp_arena scratch = scratch_begin_no_conflict();
     struct sim_ent *root = sim_ent_from_id(world, SIM_ENT_ROOT_ID);
 
-    /* Release existing walls */
-    for (u64 ent_index = 0; ent_index < world->num_ents_reserved; ++ent_index) {
-        struct sim_ent *ent = &world->ents[ent_index];
-        if (!ent->valid) continue;
-        if (sim_ent_has_prop(ent, SEPROP_WALL)) {
-            sim_ent_enable_prop(ent, SEPROP_RELEASE);
-        }
-    }
-
-    /* Sort tile chunks  */
-    /* NOTE: We sort tile chunks from left-right and top-bottom so that cross
-     * chunk tile checks only have to happen in one direction (because we
-     * know the left & top chunks have already been processed) */
-    struct sim_ent **x_sorted_tile_chunks = arena_dry_push(scratch.arena, struct sim_ent *);
+    /* Gather tile chunks and release existing walls.
+     * NOTE: We sort tile chunks before iterating so that chunk-edge tiles only
+     * need to check for adjacent walls to merge with in one direction */
+    struct sim_ent **x_sorted_tile_chunks = NULL;
+    struct sim_ent **y_sorted_tile_chunks = NULL;
     u64 sorted_tile_chunks_count = 0;
-    for (u64 ent_index = 0; ent_index < world->num_ents_reserved; ++ent_index) {
-        struct sim_ent *ent = &world->ents[ent_index];
-        if (!ent->valid) continue;
-        if (sim_ent_has_prop(ent, SEPROP_TILE_CHUNK)) {
-            *arena_push_no_zero(scratch.arena, struct sim_ent *) = ent;
-            ++sorted_tile_chunks_count;
+    {
+        /* NOTE: We sort x & y separately because of the possibility for diagonal
+         * tile chunks to depend on each other.
+         *
+         * For example: In a horizontal iteration, if 2 chunks exist diagonally
+         * with one to the bottom-left and one to the top-right and the top-right
+         * chunk has no chunk below it, then the processing of the top-right chunk
+         * will have to iterate an extra row at the bottom to create bottom walls (since
+         * walls are created at the tops of tiles). When creating a wall at the bottom-left
+         * tile of the top-right chunk, it needs to know whether any walls exist at
+         * the left of that tile that it may need to merge with. If it was iterating
+         * an array sorted with top-bottom priority, then the bottom-left chunk will not
+         * have been processed yet, meaning no walls will have been generated to merge with. */
+        x_sorted_tile_chunks = arena_dry_push(scratch.arena, struct sim_ent *);
+        for (u64 ent_index = 0; ent_index < world->num_ents_reserved; ++ent_index) {
+            struct sim_ent *ent = &world->ents[ent_index];
+            if (!ent->valid) continue;
+            if (sim_ent_has_prop(ent, SEPROP_TILE_CHUNK)) {
+                /* Append chunk to array */
+                *arena_push_no_zero(scratch.arena, struct sim_ent *) = ent;
+                ++sorted_tile_chunks_count;
+            } else if (sim_ent_has_prop(ent, SEPROP_WALL)) {
+                sim_ent_enable_prop(ent, SEPROP_RELEASE);
+            }
         }
-    }
-    struct sim_ent **y_sorted_tile_chunks = arena_push_array_no_zero(scratch.arena, struct sim_ent *, sorted_tile_chunks_count);
-    MEMCPY(y_sorted_tile_chunks, x_sorted_tile_chunks, sizeof(*x_sorted_tile_chunks) * sorted_tile_chunks_count);
+        y_sorted_tile_chunks = arena_push_array_no_zero(scratch.arena, struct sim_ent *, sorted_tile_chunks_count);
+        MEMCPY(y_sorted_tile_chunks, x_sorted_tile_chunks, sizeof(*x_sorted_tile_chunks) * sorted_tile_chunks_count);
 
-    merge_sort(x_sorted_tile_chunks, sorted_tile_chunks_count, sizeof(*x_sorted_tile_chunks), tile_chunk_sort_x, NULL);
-    merge_sort(y_sorted_tile_chunks, sorted_tile_chunks_count, sizeof(*y_sorted_tile_chunks), tile_chunk_sort_y, NULL);
+        merge_sort(x_sorted_tile_chunks, sorted_tile_chunks_count, sizeof(*x_sorted_tile_chunks), tile_chunk_sort_x, NULL);
+        merge_sort(y_sorted_tile_chunks, sorted_tile_chunks_count, sizeof(*y_sorted_tile_chunks), tile_chunk_sort_y, NULL);
+    }
 
     struct wall_node {
         struct v2i32 start;
@@ -443,7 +452,7 @@ INTERNAL void test_generate_walls(struct sim_snapshot *world)
     };
 
     /* Dicts containing walls that end on edge of tile chunk, keyed by tile end index.
-     * Used to expand walls accross tile chunks. */
+     * Used to merge walls accross tile chunks. */
     struct dict horizontal_ends_dict = dict_init(scratch.arena, 1024);
     struct dict vertical_ends_dict = dict_init(scratch.arena, 1024);