diff --git a/compose/config/interpolation.py b/compose/config/interpolation.py
index 59a567bb2..8845d73b5 100644
--- a/compose/config/interpolation.py
+++ b/compose/config/interpolation.py
@@ -133,9 +133,8 @@ class TemplateWithDefaults(Template):
             braced = mo.group('braced')
             if braced is not None:
                 sep = mo.group('sep')
-                result = self.process_braced_group(braced, sep, mapping)
-                if result:
-                    return result
+                if sep:
+                    return self.process_braced_group(braced, sep, mapping)
 
             if named is not None:
                 val = mapping[named]
diff --git a/tests/unit/config/interpolation_test.py b/tests/unit/config/interpolation_test.py
index 2ba698fbf..0d0e7d28d 100644
--- a/tests/unit/config/interpolation_test.py
+++ b/tests/unit/config/interpolation_test.py
@@ -420,3 +420,15 @@ def test_interpolate_unicode_values():
 
     interpol("$FOO") == '十六夜　咲夜'
     interpol("${BAR}") == '十六夜　咲夜'
+
+
+def test_interpolate_no_fallthrough():
+    # Test regression on docker/compose#5829
+    variable_mapping = {
+        'TEST:-': 'hello',
+        'TEST-': 'hello',
+    }
+    interpol = Interpolator(TemplateWithDefaults, variable_mapping).interpolate
+
+    assert interpol('${TEST:-}') == ''
+    assert interpol('${TEST-}') == ''