diff --git a/src/Plugin/EntityReferenceSelection/ParagraphSelection.php b/src/Plugin/EntityReferenceSelection/ParagraphSelection.php
index 9e08223..a28ee6f 100644
--- a/src/Plugin/EntityReferenceSelection/ParagraphSelection.php
+++ b/src/Plugin/EntityReferenceSelection/ParagraphSelection.php
@@ -55,7 +55,7 @@ class ParagraphSelection extends DefaultSelection {
     $form['negotate'] = [
       '#type' => 'select',
       '#options' => [0 => 'Include', 1 => 'Exclude'],
-      '#title' => $this->t('"Choose allowed paragraph types'),
+      '#title' => $this->t('Choose paragraph types'),
       '#return_value' => 1,
       '#default_value' => isset($selection_handler_settings['negotate']) ? $selection_handler_settings['negotate'] : FALSE,
     ];
@@ -80,7 +80,7 @@ class ParagraphSelection extends DefaultSelection {
           'id' => 'bundles',
         ],
         '#prefix' => '<h5>' . $this->t('Paragraph types') . '</h5>',
-        '#suffix' => '<div class="description">' . $this->t('The paragraph types that are allowed to be created in this field. Select none to allow all paragraph types.') .'</div>',
+        '#suffix' => '<div class="description">' . $this->t('Selection of paragraph types for this field. Select none to allow all paragraph types.') .'</div>',
       ];
 
       $form['target_bundles_drag_drop']['#tabledrag'][] = [
diff --git a/src/Plugin/Field/FieldWidget/ParagraphsWidget.php b/src/Plugin/Field/FieldWidget/ParagraphsWidget.php
index 0a9f9e2..166f386 100644
--- a/src/Plugin/Field/FieldWidget/ParagraphsWidget.php
+++ b/src/Plugin/Field/FieldWidget/ParagraphsWidget.php
@@ -684,6 +684,10 @@ class ParagraphsWidget extends WidgetBase {
 
     if ($this->getSelectionHandlerSetting('target_bundles') !== NULL) {
       $bundles = array_intersect_key($bundles, $this->getSelectionHandlerSetting('target_bundles'));
+      if ($this->getSelectionHandlerSetting('negotate')) {
+        $bundles = \Drupal::service('entity_type.bundle.info')->getBundleInfo($target_type);
+        $bundles = array_diff_key($bundles, $this->getSelectionHandlerSetting('target_bundles'));
+      }
     }
 
     // Support for the paragraphs reference type.
diff --git a/src/Tests/Experimental/ParagraphsExperimentalConfigTest.php b/src/Tests/Experimental/ParagraphsExperimentalConfigTest.php
index 6e99405..c0bf22e 100644
--- a/src/Tests/Experimental/ParagraphsExperimentalConfigTest.php
+++ b/src/Tests/Experimental/ParagraphsExperimentalConfigTest.php
@@ -158,4 +158,50 @@ class ParagraphsExperimentalConfigTest extends ParagraphsExperimentalTestBase {
     $this->assertNoOption('edit-fields-field-node-reference-type', 'paragraphs');
   }
 
+  /**
+   * Test included paragraph types.
+   */
+  public function testIncludedParagraphTypes() {
+    $this->loginAsAdmin();
+    // Add a Paragraph content type and 2 Paragraphs types.
+    $this->addParagraphedContentType('paragraphed_test', 'paragraphs');
+    $this->addParagraphsType('paragraph_type_test');
+    $this->addParagraphsType('text');
+
+    $this->drupalGet('admin/structure/types/manage/paragraphed_test/fields/node.paragraphed_test.paragraphs');
+    $edit = [
+      'settings[handler_settings][negotate]' => 0,
+      'settings[handler_settings][target_bundles_drag_drop][paragraph_type_test][enabled]' => 1,
+    ];
+    $this->drupalPostForm(NULL, $edit, 'Save settings');
+    $this->assertText('Saved paragraphs configuration.');
+
+    $this->drupalGet('node/add/paragraphed_test');
+    $this->assertText('Add paragraph_type_test');
+    $this->assertNoText('Add text');
+  }
+
+  /**
+   * Test excluded paragraph types.
+   */
+  public function testExcludedParagraphTypes() {
+    $this->loginAsAdmin();
+    // Add a Paragraph content type and 2 Paragraphs types.
+    $this->addParagraphedContentType('paragraphed_test', 'paragraphs');
+    $this->addParagraphsType('paragraph_type_test');
+    $this->addParagraphsType('text');
+
+    $this->drupalGet('admin/structure/types/manage/paragraphed_test/fields/node.paragraphed_test.paragraphs');
+    $edit = [
+      'settings[handler_settings][negotate]' => 1,
+      'settings[handler_settings][target_bundles_drag_drop][text][enabled]' => 1,
+    ];
+    $this->drupalPostForm(NULL, $edit, 'Save settings');
+    $this->assertText('Saved paragraphs configuration.');
+
+    $this->drupalGet('node/add/paragraphed_test');
+    $this->assertText('Add paragraph_type_test');
+    $this->assertNoText('Add text');
+  }
+
 }