wallet: Consolidate generation setup callers into one function

diff --git a/src/wallet/wallet.cpp b/src/wallet/wallet.cpp
index 3724c3f2..ade5b48f 100644
--- a/src/wallet/wallet.cpp
+++ b/src/wallet/wallet.cpp
@@ -429,30 +429,18 @@ std::shared_ptr<CWallet> CreateWallet(WalletContext& context, const std::string&
         return nullptr;
     }
 
+    // Unset the blank flag if not specified by the user
+    if (!create_blank) {
+        wallet->UnsetWalletFlag(WALLET_FLAG_BLANK_WALLET);
+    }
+
     // Encrypt the wallet
-    if (!passphrase.empty() && !(wallet_creation_flags & WALLET_FLAG_DISABLE_PRIVATE_KEYS)) {
+    if (!passphrase.empty()) {
         if (!wallet->EncryptWallet(passphrase)) {
             error = Untranslated("Error: Wallet created but failed to encrypt.");
             status = DatabaseStatus::FAILED_ENCRYPT;
             return nullptr;
         }
-        if (!create_blank) {
-            // Unlock the wallet
-            if (!wallet->Unlock(passphrase)) {
-                error = Untranslated("Error: Wallet was encrypted but could not be unlocked");
-                status = DatabaseStatus::FAILED_ENCRYPT;
-                return nullptr;
-            }
-
-            // Set a seed for the wallet
-            {
-                LOCK(wallet->cs_wallet);
-                wallet->SetupDescriptorScriptPubKeyMans();
-            }
-
-            // Relock the wallet
-            wallet->Lock();
-        }
     }
 
     WITH_LOCK(wallet->cs_wallet, wallet->LogStats());
@@ -873,12 +861,12 @@ bool CWallet::EncryptWallet(const SecureString& strWalletPassphrase)
         encrypted_batch = nullptr;
 
         Lock();
-        Unlock(strWalletPassphrase);
-
-        // Make new descriptors with a new seed
-        if (!IsWalletFlagSet(WALLET_FLAG_BLANK_WALLET)) {
-            SetupDescriptorScriptPubKeyMans();
+        if (!Unlock(strWalletPassphrase)) {
+            return false;
         }
+
+        SetupWalletGeneration();
+
         Lock();
 
         // Need to completely rewrite the wallet file; if we don't, the database might keep
@@ -3101,9 +3089,7 @@ std::shared_ptr<CWallet> CWallet::CreateNew(WalletContext& context, const std::s
         // Only descriptor wallets can be created
         assert(walletInstance->IsWalletFlagSet(WALLET_FLAG_DESCRIPTORS));
 
-        if ((wallet_creation_flags & WALLET_FLAG_EXTERNAL_SIGNER) || !(wallet_creation_flags & (WALLET_FLAG_DISABLE_PRIVATE_KEYS | WALLET_FLAG_BLANK_WALLET))) {
-            walletInstance->SetupDescriptorScriptPubKeyMans();
-        }
+        walletInstance->SetupWalletGeneration();
 
         if (chain) {
             std::optional<int> tip_height = chain->getHeight();
@@ -3670,6 +3656,18 @@ void CWallet::SetupDescriptorScriptPubKeyMans()
     }
 }
 
+void CWallet::SetupWalletGeneration()
+{
+    AssertLockHeld(cs_wallet);
+    // Skip setup for non-external-signer wallets that are either blank
+    // or have private keys disabled (not having private keys implies blank).
+    if (!IsWalletFlagSet(WALLET_FLAG_EXTERNAL_SIGNER) &&
+        (IsWalletFlagSet(WALLET_FLAG_BLANK_WALLET) || IsWalletFlagSet(WALLET_FLAG_DISABLE_PRIVATE_KEYS))) {
+        return;
+    }
+    SetupDescriptorScriptPubKeyMans();
+}
+
 void CWallet::AddActiveScriptPubKeyMan(uint256 id, OutputType type, bool internal)
 {
     WalletBatch batch(GetDatabase());
diff --git a/src/wallet/wallet.h b/src/wallet/wallet.h
index 81d40ec8..9a1b4fbc 100644
--- a/src/wallet/wallet.h
+++ b/src/wallet/wallet.h
@@ -1033,6 +1033,9 @@ public:
     //! Create new seed and default DescriptorScriptPubKeyMans for this wallet
     void SetupOwnDescriptorScriptPubKeyMans(WalletBatch& batch) EXCLUSIVE_LOCKS_REQUIRED(cs_wallet);
 
+    //! Setup new descriptors or seed for new address generation
+    void SetupWalletGeneration() EXCLUSIVE_LOCKS_REQUIRED(cs_wallet);
+
     //! Return the DescriptorScriptPubKeyMan for a WalletDescriptor if it is already in the wallet
     DescriptorScriptPubKeyMan* GetDescriptorScriptPubKeyMan(const WalletDescriptor& desc) const;