diff --git a/pkg/config/spec.go b/pkg/config/spec.go
index f01a96fb..9e684c36 100644
--- a/pkg/config/spec.go
+++ b/pkg/config/spec.go
@@ -814,20 +814,24 @@ func GetSourceSize(config *Config, source *v1.ImageSource) (int64, error) {
 		// Plus we will hit the usual things when checking a running system. Processes that go away, tmpfiles, etc...
 
 		// This is always set for pods running under kubernetes
-		underKubernetes := os.Getenv("KUBERNETES_SERVICE_HOST")
+		_, underKubernetes := os.LookupEnv("KUBERNETES_SERVICE_HOST")
+		config.Logger.Logger.Info().Bool("status", underKubernetes).Msg("Running under kubernetes")
 		// Try to get the HOST_DIR in case we are not using the default one
 		hostDir := os.Getenv("HOST_DIR")
 		// If we are under kubernetes but the HOST_DIR var is empty, default to /host as system-upgrade-controller mounts
 		// the host in that dir by default
-		if underKubernetes != "" && hostDir == "" {
+		if underKubernetes && hostDir == "" {
 			hostDir = "/host"
 		}
 		err = fsutils.WalkDirFs(config.Fs, source.Value(), func(path string, d fs.DirEntry, err error) error {
 			// If its empty we are just not setting it, so probably out of the k8s upgrade path
 			if hostDir != "" && strings.HasPrefix(path, hostDir) {
 				config.Logger.Logger.Debug().Str("path", path).Str("hostDir", hostDir).Msg("Skipping file as it is a host directory")
-			} else if strings.HasPrefix(path, "/proc") || strings.HasPrefix(path, "/dev") {
-				config.Logger.Logger.Debug().Str("path", path).Str("hostDir", hostDir).Msg("Skipping dir as it is a runtime directory (/proc or /dev)")
+			} else if underKubernetes && (strings.HasPrefix(path, "/proc") || strings.HasPrefix(path, "/dev") || strings.HasPrefix(path, "/run")) {
+				// If under kubernetes, the upgrade will check the size of / which includes the host dir mounted under /host
+				// But it also can bind the host mounts into / so we want to skip those runtime dirs
+				// During install or upgrade outside kubernetes, we dont care about those dirs as they are not expected to be in the source dir
+				config.Logger.Logger.Debug().Str("path", path).Str("hostDir", hostDir).Msg("Skipping dir as it is a runtime directory under kubernetes (/proc, /dev or /run)")
 			} else {
 				v := getSize(&size, filesVisited, path, d, err)
 				return v
diff --git a/pkg/config/spec_test.go b/pkg/config/spec_test.go
index bb9892ad..1439fad5 100644
--- a/pkg/config/spec_test.go
+++ b/pkg/config/spec_test.go
@@ -730,4 +730,19 @@ var _ = Describe("GetSourceSize", Label("GetSourceSize"), func() {
 		// what we get (/1000/1000) then we finish by adding and extra 100MB on top, like the GetSourceSize does internally
 		Expect(sizeAfter).To(Equal(int64((400 * 1024 * 1024 / 1000 / 1000) + 100)))
 	})
+	It("Does not skip the dirs if outside of kubernetes", func() {
+		sizeBefore, err := config.GetSourceSize(conf, imageSource)
+		Expect(err).To(BeNil())
+		Expect(sizeBefore).ToNot(BeZero())
+
+		// Not inside kubernetes so it should count this dir
+		Expect(os.Mkdir(filepath.Join(tempDir, "run"), os.ModePerm)).ToNot(HaveOccurred())
+		Expect(createFileOfSizeInMB(filepath.Join(tempDir, "run", "what.txt"), 200)).ToNot(HaveOccurred())
+
+		sizeAfter, err := config.GetSourceSize(conf, imageSource)
+		Expect(err).ToNot(HaveOccurred())
+		Expect(sizeAfter).ToNot(Equal(sizeBefore))
+		Expect(sizeAfter).ToNot(BeZero())
+		Expect(sizeAfter).To(Equal(int64((400 * 1024 * 1024 / 1000 / 1000) + 100)))
+	})
 })