diff --git a/editor/scene_tree_dock.cpp b/editor/scene_tree_dock.cpp
index 16f15757574..6726bf1731a 100644
--- a/editor/scene_tree_dock.cpp
+++ b/editor/scene_tree_dock.cpp
@@ -890,16 +890,22 @@ void SceneTreeDock::_tool_selected(int p_tool, bool p_confirm_override) {
 			if (e) {
 				Node *node = e->get();
 				if (node) {
+					bool editable = EditorNode::get_singleton()->get_edited_scene()->is_editable_instance(node);
 					bool placeholder = node->get_scene_instance_load_placeholder();
+
+					// Fire confirmation dialog when children are editable.
+					if (editable && !placeholder) {
+						placeholder_editable_instance_remove_dialog->set_text(TTR("Enabling \"Load As Placeholder\" will disable \"Editable Children\" and cause all properties of the node to be reverted to their default."));
+						placeholder_editable_instance_remove_dialog->popup_centered_minsize();
+						break;
+					}
+
 					placeholder = !placeholder;
-					int editable_item_idx = menu->get_item_idx_from_text(TTR("Editable Children"));
-					int placeholder_item_idx = menu->get_item_idx_from_text(TTR("Load As Placeholder"));
+
 					if (placeholder)
 						EditorNode::get_singleton()->get_edited_scene()->set_editable_instance(node, false);
 
 					node->set_scene_instance_load_placeholder(placeholder);
-					menu->set_item_checked(editable_item_idx, false);
-					menu->set_item_checked(placeholder_item_idx, placeholder);
 					scene_tree->update_tree();
 				}
 			}
@@ -1761,6 +1767,25 @@ void SceneTreeDock::_toggle_editable_children_from_selection() {
 	}
 }
 
+void SceneTreeDock::_toggle_placeholder_from_selection() {
+
+	List<Node *> selection = editor_selection->get_selected_node_list();
+	List<Node *>::Element *e = selection.front();
+
+	if (e) {
+		Node *node = e->get();
+		if (node) {
+			_toggle_editable_children(node);
+
+			bool placeholder = node->get_scene_instance_load_placeholder();
+			placeholder = !placeholder;
+
+			node->set_scene_instance_load_placeholder(placeholder);
+			scene_tree->update_tree();
+		}
+	}
+}
+
 void SceneTreeDock::_toggle_editable_children(Node *p_node) {
 
 	if (p_node) {
@@ -2698,6 +2723,7 @@ void SceneTreeDock::_bind_methods() {
 	ClassDB::bind_method(D_METHOD("_nodes_drag_begin"), &SceneTreeDock::_nodes_drag_begin);
 	ClassDB::bind_method(D_METHOD("_delete_confirm"), &SceneTreeDock::_delete_confirm);
 	ClassDB::bind_method(D_METHOD("_toggle_editable_children_from_selection"), &SceneTreeDock::_toggle_editable_children_from_selection);
+	ClassDB::bind_method(D_METHOD("_toggle_placeholder_from_selection"), &SceneTreeDock::_toggle_placeholder_from_selection);
 	ClassDB::bind_method(D_METHOD("_node_prerenamed"), &SceneTreeDock::_node_prerenamed);
 	ClassDB::bind_method(D_METHOD("_import_subscene"), &SceneTreeDock::_import_subscene);
 	ClassDB::bind_method(D_METHOD("_selection_changed"), &SceneTreeDock::_selection_changed);
@@ -2871,6 +2897,10 @@ SceneTreeDock::SceneTreeDock(EditorNode *p_editor, Node *p_scene_root, EditorSel
 	add_child(editable_instance_remove_dialog);
 	editable_instance_remove_dialog->connect("confirmed", this, "_toggle_editable_children_from_selection");
 
+	placeholder_editable_instance_remove_dialog = memnew(ConfirmationDialog);
+	add_child(placeholder_editable_instance_remove_dialog);
+	placeholder_editable_instance_remove_dialog->connect("confirmed", this, "_toggle_placeholder_from_selection");
+
 	import_subscene_dialog = memnew(EditorSubScene);
 	add_child(import_subscene_dialog);
 	import_subscene_dialog->connect("subscene_selected", this, "_import_subscene");
diff --git a/editor/scene_tree_dock.h b/editor/scene_tree_dock.h
index cd582fdf577..014ce58e885 100644
--- a/editor/scene_tree_dock.h
+++ b/editor/scene_tree_dock.h
@@ -127,6 +127,7 @@ class SceneTreeDock : public VBoxContainer {
 	AcceptDialog *accept;
 	ConfirmationDialog *delete_dialog;
 	ConfirmationDialog *editable_instance_remove_dialog;
+	ConfirmationDialog *placeholder_editable_instance_remove_dialog;
 
 	ReparentDialog *reparent_dialog;
 	EditorQuickOpen *quick_open;
@@ -184,6 +185,8 @@ class SceneTreeDock : public VBoxContainer {
 	void _toggle_editable_children_from_selection();
 	void _toggle_editable_children(Node *p_node);
 
+	void _toggle_placeholder_from_selection();
+
 	void _node_prerenamed(Node *p_node, const String &p_new_name);
 
 	void _nodes_drag_begin();