Stellar wind and photon radiation interactions with a planet can cause atmospheric depletion, which may have a potentially catastrophic impact on a planet's habitability. While photon interactions with planetary atmospheres and outflows have been researched to some degree, studies of stellar wind interactions are in their infancy. Here, we use three-dimensional magnetohydrodynamic simulations to model the effect of the stellar wind on the magnetosphere and outflow of a hypothetical planet, modeled to have an H-rich evaporating envelope with a prescribed mass-loss rate, orbiting in the habitable zone close to a low-mass M dwarf. We take the TRAPPIST-1 system as a prototype, with our simulated planet situated at the orbit of TRAPPIST-1e. We show that the atmospheric outflow is accelerated and advected upon interaction with the wind, resulting in a diverse range of planetary magnetosphere morphologies and plasma distributions as local stellar wind conditions change along the orbit. We consider the implications of the wind–outflow interaction on potential hydrogen Lyα observations of the planetary atmosphere during transits. The Lyα observational signatures depend strongly on the local wind conditions at the time of the observation and can be subject to considerable variation on timescales as short as an hour. Our results indicate that observed variations in exoplanet transit signatures could be explained by wind–outflow interaction.