diff --git a/modules/paragraphs_library/config/schema/paragraphs_library.schema.yml b/modules/paragraphs_library/config/schema/paragraphs_library.schema.yml
index 70ff22b..33581e5 100644
--- a/modules/paragraphs_library/config/schema/paragraphs_library.schema.yml
+++ b/modules/paragraphs_library/config/schema/paragraphs_library.schema.yml
@@ -2,6 +2,6 @@ paragraphs.paragraphs_type.*.third_party.paragraphs_library:
   type: mapping
   label: 'Per-paragraph type third party settings'
   mapping:
-    disallow_library_conversion:
+    allow_library_conversion:
       type: integer
-      label: 'Disallow conversion to paragraph library item'
+      label: 'Allow conversion to paragraph library item'
diff --git a/modules/paragraphs_library/paragraphs_library.module b/modules/paragraphs_library/paragraphs_library.module
index 75b6ba2..460826c 100644
--- a/modules/paragraphs_library/paragraphs_library.module
+++ b/modules/paragraphs_library/paragraphs_library.module
@@ -28,8 +28,8 @@ function paragraphs_library_paragraph_widget_dropbutton_alter(&$links, &$context
   $bundle = $context['paragraphs_entity']->bundle();
   /** @var ParagraphsTypeInterface $paragraphs_type */
   $paragraphs_type = $context['paragraphs_entity']->getParagraphType();
-  $disallow_library_conversion = $paragraphs_type->getThirdPartySetting('paragraphs_library', 'disallow_library_conversion');
-  if (!$disallow_library_conversion && $bundle != 'from_library') {
+  $allow_library_conversion = $paragraphs_type->getThirdPartySetting('paragraphs_library', 'allow_library_conversion');
+  if ($allow_library_conversion && $bundle != 'from_library') {
     $id_prefix = implode('_', array_merge($parents, array($field_name, $context['delta'])));
     $links['add_to_library'] = [
       '#value' => t('Add to library'),
@@ -148,10 +148,10 @@ function paragraphs_library_form_paragraphs_type_form_alter(&$form, FormStateInt
   // Adds paragraph type grouping to the form.
   /** @var \Drupal\paragraphs\ParagraphsTypeInterface $paragraph_type */
   $paragraph_type = $form_state->getFormObject()->getEntity();
-  $form['disallow_library_conversion'] = [
+  $form['allow_library_conversion'] = [
     '#type' => 'checkbox',
-    '#title' => t('Do not allow adding to library'),
-    '#default_value' => $paragraph_type->getThirdPartySetting('paragraphs_library', 'disallow_library_conversion', FALSE),
+    '#title' => t('Allow adding to library'),
+    '#default_value' => $paragraph_type->getThirdPartySetting('paragraphs_library', 'allow_library_conversion', FALSE),
   ];
   $form['#entity_builders'][] = 'paragraphs_library_form_paragraphs_type_form_builder';
 }
@@ -162,10 +162,10 @@ function paragraphs_library_form_paragraphs_type_form_alter(&$form, FormStateInt
  * @see primer_base_form_paragraphs_type_form_alter()
  */
 function paragraphs_library_form_paragraphs_type_form_builder($entity_type, ParagraphsTypeInterface $type, &$form, FormStateInterface $form_state) {
-  if ($form_state->getValue('disallow_library_conversion')) {
-    $type->setThirdPartySetting('paragraphs_library', 'disallow_library_conversion', $form_state->getValue('disallow_library_conversion'));
+  if ($form_state->getValue('allow_library_conversion')) {
+    $type->setThirdPartySetting('paragraphs_library', 'allow_library_conversion', $form_state->getValue('allow_library_conversion'));
   }
   else {
-    $type->unsetThirdPartySetting('paragraphs_library', 'disallow_library_conversion');
+    $type->unsetThirdPartySetting('paragraphs_library', 'allow_library_conversion');
   }
 }
diff --git a/modules/paragraphs_library/src/Entity/LibraryItem.php b/modules/paragraphs_library/src/Entity/LibraryItem.php
index 9c9d122..768a0d2 100644
--- a/modules/paragraphs_library/src/Entity/LibraryItem.php
+++ b/modules/paragraphs_library/src/Entity/LibraryItem.php
@@ -123,9 +123,7 @@ class LibraryItem extends ContentEntityBase implements LibraryItemInterface {
    * {@inheritdoc}
    */
   public static function createFromParagraph(ParagraphInterface $paragraph) {
-    $disallow_library_conversion = $paragraph->get('type')->entity->getThirdPartySetting('paragraphs_library', 'disallow_library_conversion');
-
-    if ($disallow_library_conversion) {
+    if (!$paragraph->getParagraphType()->getThirdPartySetting('paragraphs_library', 'allow_library_conversion', FALSE)) {
       throw new \Exception(sprintf('%s cannot be converted to library item per configuration', $paragraph->bundle()));
     }
 
diff --git a/modules/paragraphs_library/src/Tests/ParagraphsLibraryItemTest.php b/modules/paragraphs_library/src/Tests/ParagraphsLibraryItemTest.php
index 46549ee..8f24718 100644
--- a/modules/paragraphs_library/src/Tests/ParagraphsLibraryItemTest.php
+++ b/modules/paragraphs_library/src/Tests/ParagraphsLibraryItemTest.php
@@ -171,8 +171,12 @@ class ParagraphsLibraryItemTest extends ParagraphsExperimentalTestBase {
       'administer paragraphs library',
       'administer paragraphs types'
     ]);
+    $edit = ['allow_library_conversion' => 1];
+    $this->drupalPostForm('admin/structure/paragraphs_type/text', $edit, 'Save');
+
     $this->drupalGet('node/add/paragraphed_test');
     $this->drupalPostForm(NULL, NULL, 'Add Text');
+    $this->assertRaw('Add to library');
     $edit = [
       'field_paragraphs[0][subform][paragraphs_text][0][value]' => 'Random text for testing converting into library.',
     ];
@@ -182,6 +186,7 @@ class ParagraphsLibraryItemTest extends ParagraphsExperimentalTestBase {
     $edit = [
       'title[0][value]' => 'TextParagraphs',
     ];
+    $this->assertNoRaw('Add to library');
     $this->drupalPostForm(NULL, $edit, 'Save and publish');
     $this->drupalGet('node/1');
     $this->assertText('Random text for testing converting into library.');
@@ -202,11 +207,17 @@ class ParagraphsLibraryItemTest extends ParagraphsExperimentalTestBase {
     $this->assertText('Random text for testing converting into library.');
 
     // Test disallow convesrion.
-    $this->drupalGet('admin/structure/paragraphs_type/text');
-    $this->drupalPostForm(NULL, ['disallow_library_conversion' => 1], 'Save');
+    $edit = ['allow_library_conversion' => FALSE];
+    $this->drupalPostForm('admin/structure/paragraphs_type/text', $edit, 'Save');
+
+    /** @var \Drupal\Core\Config\ConfigFactoryInterface $config_factory */
+    $config_factory = \Drupal::service('config.factory');
+    $third_party = $config_factory->get('paragraphs.paragraphs_type.text')->get('third_party_settings');
+    $this->assertFalse(isset($third_party['paragraphs_library']['allow_library_conversion']));
+
     $this->drupalGet('node/add/paragraphed_test');
     $this->drupalPostForm(NULL, NULL, 'Add Text');
-    $this->assertNoText('Add to library');
+    $this->assertNoRaw('Add to library');
   }
 
   /**