diff --git a/tests/unit/torch/features/test_sequential.py b/tests/unit/torch/features/test_sequential.py
index 78c6dc5953..f58eb7cdb5 100644
--- a/tests/unit/torch/features/test_sequential.py
+++ b/tests/unit/torch/features/test_sequential.py
@@ -136,7 +136,6 @@ def test_sequential_tabular_features_ignore_masking(schema, torch_yoochoose_like
         input_module(torch_yoochoose_like, training=False, testing=True).detach().cpu().numpy()
     )
 
-    assert np.allclose(output_wo_masking, output_inference_masking, rtol=1e-04, atol=1e-08)
     assert not np.allclose(output_wo_masking, output_clm_masking, rtol=1e-04, atol=1e-08)
 
     input_module._masking = MaskedLanguageModeling(hidden_size=100)
diff --git a/tests/unit/torch/test_masking.py b/tests/unit/torch/test_masking.py
index cd3542beb1..5a56718509 100644
--- a/tests/unit/torch/test_masking.py
+++ b/tests/unit/torch/test_masking.py
@@ -43,7 +43,7 @@ def test_mask_only_last_item_for_eval(torch_masking_inputs, task):
     lm = tr.masking.masking_registry[task](
         hidden_dim, padding_idx=torch_masking_inputs["padding_idx"]
     )
-    lm.compute_masked_targets(torch_masking_inputs["labels"], training=False)
+    lm.compute_masked_targets(torch_masking_inputs["labels"], training=False, testing=True)
     # get non padded last items
     non_padded_mask = torch_masking_inputs["labels"] != torch_masking_inputs["padding_idx"]
     rows_ids = torch.arange(
@@ -57,7 +57,7 @@ def test_mask_only_last_item_for_eval(torch_masking_inputs, task):
     trgt_pad = lm.masked_targets != torch_masking_inputs["padding_idx"]
     out_last = lm.masked_targets[trgt_pad].flatten().numpy()
     # check that only one item is masked for each session
-    assert lm.mask_schema.sum() == torch_masking_inputs["input_tensor"].size(0)
+    assert trgt_pad.sum() == torch_masking_inputs["input_tensor"].size(0)
     # check only the last non-paded item is masked
     assert all(last_labels == out_last)
 
@@ -109,7 +109,7 @@ def test_clm_training_on_last_item(torch_masking_inputs):
     # last labels from output
     trgt_pad = lm.masked_targets != torch_masking_inputs["padding_idx"]
     out_last = lm.masked_targets[trgt_pad].flatten().numpy()
-    assert lm.mask_schema.sum() == torch_masking_inputs["input_tensor"].size(0)
+    assert trgt_pad.sum() == torch_masking_inputs["input_tensor"].size(0)
     assert all(last_labels == out_last)
 
 
diff --git a/transformers4rec/torch/masking.py b/transformers4rec/torch/masking.py
index e699d52f47..5a059e27de 100644
--- a/transformers4rec/torch/masking.py
+++ b/transformers4rec/torch/masking.py
@@ -274,6 +274,10 @@ def __init__(
     def _compute_masked_targets(
         self, item_ids: torch.Tensor, training: bool = False, testing: bool = False
     ) -> MaskingInfo:
+        if not training and not testing:
+            mask_labels = item_ids != self.padding_idx
+            return MaskingInfo(mask_labels, item_ids)
+
         masking_info = self.predict_all(item_ids)
         mask_labels, labels = masking_info.schema, masking_info.targets
 
@@ -290,7 +294,8 @@ def _compute_masked_targets(
             label_seq_trg_eval[rows_ids, last_item_sessions] = labels[rows_ids, last_item_sessions]
             # Updating labels and mask
             labels = label_seq_trg_eval
-            mask_labels = label_seq_trg_eval != self.padding_idx
+            # We only mask padded positions
+            mask_labels = item_ids != self.padding_idx
 
         return MaskingInfo(mask_labels, labels)
 
@@ -302,6 +307,13 @@ def apply_mask_to_inputs(
         testing: bool = False,
     ) -> torch.Tensor:
         if not training and not testing:
+            # Replacing the inputs corresponding to padded items with a trainable embedding
+            # To mimic training and evaluation masking strategy
+            inputs = torch.where(
+                mask_schema.unsqueeze(-1).bool(),
+                inputs,
+                self.masked_item_embedding.to(inputs.dtype),
+            )
             return inputs
         # shift sequence of interaction embeddings
         pos_emb_inp = inputs[:, :-1]
@@ -316,7 +328,7 @@ def apply_mask_to_inputs(
             ],
             axis=1,
         )
-        # Replacing the inputs corresponding to masked label with a trainable embedding
+        # Replacing the inputs corresponding to padded items with a trainable embedding
         pos_emb_inp = torch.where(
             mask_schema.unsqueeze(-1).bool(),
             pos_emb_inp,
@@ -601,14 +613,16 @@ def _compute_masked_targets_extended(
                         # from the interval `[cur_len, cur_len + context_length - span_length]`
                         start_index = (
                             cur_len
-                            + torch.randint(  # type: ignore
-                                context_length - span_length + 1, (1,)
+                            + torch.randint(
+                                context_length - span_length + 1, (1,)  # type: ignore
                             ).item()
                         )
                         if start_index < max_len:
                             # Mask the span of non-padded items
                             #   `start_index:start_index + span_length`
-                            mask_labels[i, start_index : start_index + span_length] = 1
+                            mask_labels[
+                                i, start_index : start_index + span_length  # type: ignore
+                            ] = 1
                         # Set `cur_len = cur_len + context_length`
                         cur_len += context_length
                     # if no item was masked: