diff --git a/pydantic/main.py b/pydantic/main.py
index 62dc0bb..02bf91d 100644
--- a/pydantic/main.py
+++ b/pydantic/main.py
@@ -586,6 +586,24 @@ class BaseModel(Representation, metaclass=ModelMetaclass):
         m._init_private_attributes()
         return m
 
+    def _copy_and_set_values(self: 'Model', values: 'DictStrAny', fields_set: 'SetStr', *, deep: bool) -> 'Model':
+        if deep:
+            # chances of having empty dict here are quite low for using smart_deepcopy
+            values = deepcopy(values)
+
+        cls = self.__class__
+        m = cls.__new__(cls)
+        object_setattr(m, '__dict__', values)
+        object_setattr(m, '__fields_set__', fields_set)
+        for name in self.__private_attributes__:
+            value = getattr(self, name, Undefined)
+            if value is not Undefined:
+                if deep:
+                    value = deepcopy(value)
+                object_setattr(m, name, value)
+
+        return m
+
     def copy(
         self: 'Model',
         *,
@@ -605,32 +623,18 @@ class BaseModel(Representation, metaclass=ModelMetaclass):
         :return: new model instance
         """
 
-        v = dict(
+        values = dict(
             self._iter(to_dict=False, by_alias=False, include=include, exclude=exclude, exclude_unset=False),
             **(update or {}),
         )
 
-        if deep:
-            # chances of having empty dict here are quite low for using smart_deepcopy
-            v = deepcopy(v)
-
-        cls = self.__class__
-        m = cls.__new__(cls)
-        object_setattr(m, '__dict__', v)
         # new `__fields_set__` can have unset optional fields with a set value in `update` kwarg
         if update:
             fields_set = self.__fields_set__ | update.keys()
         else:
             fields_set = set(self.__fields_set__)
-        object_setattr(m, '__fields_set__', fields_set)
-        for name in self.__private_attributes__:
-            value = getattr(self, name, Undefined)
-            if value is not Undefined:
-                if deep:
-                    value = deepcopy(value)
-                object_setattr(m, name, value)
 
-        return m
+        return self._copy_and_set_values(values, fields_set, deep=deep)
 
     @classmethod
     def schema(cls, by_alias: bool = True, ref_template: str = default_ref_template) -> 'DictStrAny':
@@ -658,7 +662,10 @@ class BaseModel(Representation, metaclass=ModelMetaclass):
     @classmethod
     def validate(cls: Type['Model'], value: Any) -> 'Model':
         if isinstance(value, cls):
-            return value.copy() if cls.__config__.copy_on_model_validation else value
+            if cls.__config__.copy_on_model_validation:
+                return value._copy_and_set_values(value.__dict__, value.__fields_set__, deep=False)
+            else:
+                return value
 
         value = cls._enforce_dict_if_root(value)
 
diff --git a/tests/test_main.py b/tests/test_main.py
index f44776c..688cca1 100644
--- a/tests/test_main.py
+++ b/tests/test_main.py
@@ -28,7 +28,9 @@ from pydantic import (
     Field,
     NoneBytes,
     NoneStr,
+    PrivateAttr,
     Required,
+    SecretStr,
     ValidationError,
     constr,
     root_validator,
@@ -1516,6 +1518,45 @@ def test_model_exclude_config_field_merging():
     assert Model.__fields__['b'].field_info.exclude == {'foo': ..., 'bar': ...}
 
 
+def test_model_exclude_copy_on_model_validation():
+    """When `Config.copy_on_model_validation` is set, it should keep private attributes and excluded fields"""
+
+    class User(BaseModel):
+        _priv: int = PrivateAttr()
+        id: int
+        username: str
+        password: SecretStr = Field(exclude=True)
+        hobbies: List[str]
+
+    my_user = User(id=42, username='JohnDoe', password='hashedpassword', hobbies=['scuba diving'])
+
+    my_user._priv = 13
+    assert my_user.id == 42
+    assert my_user.password.get_secret_value() == 'hashedpassword'
+    assert my_user.dict() == {'id': 42, 'username': 'JohnDoe', 'hobbies': ['scuba diving']}
+
+    class Transaction(BaseModel):
+        id: str
+        user: User = Field(..., exclude={'username'})
+        value: int
+
+        class Config:
+            fields = {'value': {'exclude': True}}
+
+    t = Transaction(
+        id='1234567890',
+        user=my_user,
+        value=9876543210,
+    )
+
+    assert t.user is not my_user
+    assert t.user.hobbies == ['scuba diving']
+    assert t.user.hobbies is my_user.hobbies  # `Config.copy_on_model_validation` only does a shallow copy
+    assert t.user._priv == 13
+    assert t.user.password.get_secret_value() == 'hashedpassword'
+    assert t.dict() == {'id': '1234567890', 'user': {'id': 42, 'hobbies': ['scuba diving']}}
+
+
 @pytest.mark.parametrize(
     'kinds',
     [