Nicosia Walled City, on the northern side of Cyprus, encapsulates historical imprints from various cultures and civilizations within its layered structure, despite being a divided city since 1974. Based on this beautiful Medieval sequence, this study investigates the implications of architectural design approaches aimed at incorporating contemporary architecture into this heterogeneous historic city to conserve its historical identity. While the threats facing this diverse built heritage composition are various, the changes brought about by design outcomes and development actions can be challenging. This is especially so when designers are obligated to adhere to conservation principles that clash with the city’s character and that resort to design strategies that prohibit the addition of new layers. This study employed a mix of qualitative and quantitative research methods and examined three case studies based on buildings that were erected during the Turkish Republic of Northern Cyprus period, spanning from 1983 to when the crossing began in 2003. This study’s conclusions revealed that the design schemes negatively impacted the city’s historical identity layers because the designers followed selective conservation principles that entirely concentrated on nostalgia rather than typological values. Rather than creating new layers, preferences energized this problem, and the designers’ attitudes towards the place’s heterogeneous character maintained the same context uniformity patterns. Efforts to add sequences of layers reflecting the identity of the present time and its perceptions were thwarted. These reductions in the historical layers, the subsequent transformations, and the current social–cultural necessities should stimulate individual determination and practical policy instruments. The tools proposed here will accommodate inclusive ideas that encourage fresh dialogues with the past, thus keeping the city’s identity significant for the future.