diff --git a/compiler/src/dotty/tools/dotc/core/Constraint.scala b/compiler/src/dotty/tools/dotc/core/Constraint.scala
index c35c93886cd8..07b6e71cdcc9 100644
--- a/compiler/src/dotty/tools/dotc/core/Constraint.scala
+++ b/compiler/src/dotty/tools/dotc/core/Constraint.scala
@@ -126,6 +126,12 @@ abstract class Constraint extends Showable {
    */
   def subst(from: TypeLambda, to: TypeLambda)(using Context): This
 
+  /** Is `tv` marked as hard in the constraint? */
+  def isHard(tv: TypeVar): Boolean
+  
+  /** The same as this constraint, but with `tv` marked as hard. */
+  def withHard(tv: TypeVar)(using Context): This
+
   /** Gives for each instantiated type var that does not yet have its `inst` field
    *  set, the instance value stored in the constraint. Storing instances in constraints
    *  is done only in a temporary way for contexts that may be retracted
diff --git a/compiler/src/dotty/tools/dotc/core/ConstraintHandling.scala b/compiler/src/dotty/tools/dotc/core/ConstraintHandling.scala
index 747500465c0a..05333bfb778c 100644
--- a/compiler/src/dotty/tools/dotc/core/ConstraintHandling.scala
+++ b/compiler/src/dotty/tools/dotc/core/ConstraintHandling.scala
@@ -13,6 +13,7 @@ import typer.ProtoTypes.{newTypeVar, representedParamRef}
 import UnificationDirection.*
 import NameKinds.AvoidNameKind
 import util.SimpleIdentitySet
+import NullOpsDecorator.stripNull
 
 /** Methods for adding constraints and solving them.
  *
@@ -627,8 +628,11 @@ trait ConstraintHandling {
    *   1. If `inst` is a singleton type, or a union containing some singleton types,
    *      widen (all) the singleton type(s), provided the result is a subtype of `bound`.
    *      (i.e. `inst.widenSingletons <:< bound` succeeds with satisfiable constraint)
-   *   2. If `inst` is a union type, approximate the union type from above by an intersection
-   *      of all common base types, provided the result is a subtype of `bound`.
+   *   2a. If `inst` is a union type and `widenUnions` is true, approximate the union type
+   *      from above by an intersection of all common base types, provided the result
+   *      is a subtype of `bound`.
+   *   2b. If `inst` is a union type and `widenUnions` is false, turn it into a hard
+   *      union type (except for unions | Null, which are kept in the state they were).
    *   3. Widen some irreducible applications of higher-kinded types to wildcard arguments
    *      (see @widenIrreducible).
    *   4. Drop transparent traits from intersections (see @dropTransparentTraits).
@@ -641,10 +645,12 @@ trait ConstraintHandling {
    * At this point we also drop the @Repeated annotation to avoid inferring type arguments with it,
    * as those could leak the annotation to users (see run/inferred-repeated-result).
    */
-  def widenInferred(inst: Type, bound: Type)(using Context): Type =
+  def widenInferred(inst: Type, bound: Type, widenUnions: Boolean)(using Context): Type =
     def widenOr(tp: Type) =
-      val tpw = tp.widenUnion
-      if (tpw ne tp) && (tpw <:< bound) then tpw else tp
+      if widenUnions then
+        val tpw = tp.widenUnion
+        if (tpw ne tp) && (tpw <:< bound) then tpw else tp
+      else tp.hardenUnions
 
     def widenSingle(tp: Type) =
       val tpw = tp.widenSingletons
@@ -664,6 +670,23 @@ trait ConstraintHandling {
         wideInst.dropRepeatedAnnot
   end widenInferred
 
+  /** Convert all toplevel union types in `tp` to hard unions */
+  extension (tp: Type) private def hardenUnions(using Context): Type = tp.widen match
+    case tp: AndType =>
+      tp.derivedAndType(tp.tp1.hardenUnions, tp.tp2.hardenUnions)
+    case tp: RefinedType =>
+      tp.derivedRefinedType(tp.parent.hardenUnions, tp.refinedName, tp.refinedInfo)
+    case tp: RecType =>
+      tp.rebind(tp.parent.hardenUnions)
+    case tp: HKTypeLambda =>
+      tp.derivedLambdaType(resType = tp.resType.hardenUnions)
+    case tp: OrType =>
+      val tp1 = tp.stripNull
+      if tp1 ne tp then tp.derivedOrType(tp1.hardenUnions, defn.NullType)
+      else tp.derivedOrType(tp.tp1.hardenUnions, tp.tp2.hardenUnions, soft = false)
+    case _ =>
+      tp
+
   /** The instance type of `param` in the current constraint (which contains `param`).
    *  If `fromBelow` is true, the instance type is the lub of the parameter's
    *  lower bounds; otherwise it is the glb of its upper bounds. However,
@@ -672,10 +695,10 @@ trait ConstraintHandling {
    *  The instance type is not allowed to contain references to types nested deeper
    *  than `maxLevel`.
    */
-  def instanceType(param: TypeParamRef, fromBelow: Boolean, maxLevel: Int)(using Context): Type = {
+  def instanceType(param: TypeParamRef, fromBelow: Boolean, widenUnions: Boolean, maxLevel: Int)(using Context): Type = {
     val approx = approximation(param, fromBelow, maxLevel).simplified
     if fromBelow then
-      val widened = widenInferred(approx, param)
+      val widened = widenInferred(approx, param, widenUnions)
       // Widening can add extra constraints, in particular the widened type might
       // be a type variable which is now instantiated to `param`, and therefore
       // cannot be used as an instantiation of `param` without creating a loop.
@@ -683,7 +706,7 @@ trait ConstraintHandling {
       // (we do not check for non-toplevel occurences: those should never occur
       // since `addOneBound` disallows recursive lower bounds).
       if constraint.occursAtToplevel(param, widened) then
-        instanceType(param, fromBelow, maxLevel)
+        instanceType(param, fromBelow, widenUnions, maxLevel)
       else
         widened
     else
diff --git a/compiler/src/dotty/tools/dotc/core/GadtConstraint.scala b/compiler/src/dotty/tools/dotc/core/GadtConstraint.scala
index a8b5eee4902d..d8e1c5276ab6 100644
--- a/compiler/src/dotty/tools/dotc/core/GadtConstraint.scala
+++ b/compiler/src/dotty/tools/dotc/core/GadtConstraint.scala
@@ -6,7 +6,7 @@ import Decorators._
 import Contexts._
 import Types._
 import Symbols._
-import util.SimpleIdentityMap
+import util.{SimpleIdentitySet, SimpleIdentityMap}
 import collection.mutable
 import printing._
 
@@ -68,7 +68,7 @@ final class ProperGadtConstraint private(
   import dotty.tools.dotc.config.Printers.{gadts, gadtsConstr}
 
   def this() = this(
-    myConstraint = new OrderingConstraint(SimpleIdentityMap.empty, SimpleIdentityMap.empty, SimpleIdentityMap.empty),
+    myConstraint = new OrderingConstraint(SimpleIdentityMap.empty, SimpleIdentityMap.empty, SimpleIdentityMap.empty, SimpleIdentitySet.empty),
     mapping = SimpleIdentityMap.empty,
     reverseMapping = SimpleIdentityMap.empty,
     wasConstrained = false
diff --git a/compiler/src/dotty/tools/dotc/core/OrderingConstraint.scala b/compiler/src/dotty/tools/dotc/core/OrderingConstraint.scala
index 5f267a1c242a..1341fac7d735 100644
--- a/compiler/src/dotty/tools/dotc/core/OrderingConstraint.scala
+++ b/compiler/src/dotty/tools/dotc/core/OrderingConstraint.scala
@@ -3,7 +3,7 @@ package dotc
 package core
 
 import Types._, Contexts._, Symbols._, Decorators._, TypeApplications._
-import util.SimpleIdentityMap
+import util.{SimpleIdentitySet, SimpleIdentityMap}
 import collection.mutable
 import printing.Printer
 import printing.Texts._
@@ -24,12 +24,14 @@ object OrderingConstraint {
   /** The type of `OrderingConstraint#lowerMap`, `OrderingConstraint#upperMap` */
   type ParamOrdering = ArrayValuedMap[List[TypeParamRef]]
 
-  /** A new constraint with given maps */
-  private def newConstraint(boundsMap: ParamBounds, lowerMap: ParamOrdering, upperMap: ParamOrdering)(using Context) : OrderingConstraint =
+  /** A new constraint with given maps and given set of hard typevars */
+  private def newConstraint(
+      boundsMap: ParamBounds, lowerMap: ParamOrdering, upperMap: ParamOrdering,
+      hardVars: TypeVars)(using Context) : OrderingConstraint =
     if boundsMap.isEmpty && lowerMap.isEmpty && upperMap.isEmpty then
       empty
     else
-      val result = new OrderingConstraint(boundsMap, lowerMap, upperMap)
+      val result = new OrderingConstraint(boundsMap, lowerMap, upperMap, hardVars)
       if ctx.run != null then ctx.run.nn.recordConstraintSize(result, result.boundsMap.size)
       result
 
@@ -91,7 +93,7 @@ object OrderingConstraint {
     def entries(c: OrderingConstraint, poly: TypeLambda): Array[Type] | Null =
       c.boundsMap(poly)
     def updateEntries(c: OrderingConstraint, poly: TypeLambda, entries: Array[Type])(using Context): OrderingConstraint =
-      newConstraint(c.boundsMap.updated(poly, entries), c.lowerMap, c.upperMap)
+      newConstraint(c.boundsMap.updated(poly, entries), c.lowerMap, c.upperMap, c.hardVars)
     def initial = NoType
   }
 
@@ -99,7 +101,7 @@ object OrderingConstraint {
     def entries(c: OrderingConstraint, poly: TypeLambda): Array[List[TypeParamRef]] | Null =
       c.lowerMap(poly)
     def updateEntries(c: OrderingConstraint, poly: TypeLambda, entries: Array[List[TypeParamRef]])(using Context): OrderingConstraint =
-      newConstraint(c.boundsMap, c.lowerMap.updated(poly, entries), c.upperMap)
+      newConstraint(c.boundsMap, c.lowerMap.updated(poly, entries), c.upperMap, c.hardVars)
     def initial = Nil
   }
 
@@ -107,12 +109,12 @@ object OrderingConstraint {
     def entries(c: OrderingConstraint, poly: TypeLambda): Array[List[TypeParamRef]] | Null =
       c.upperMap(poly)
     def updateEntries(c: OrderingConstraint, poly: TypeLambda, entries: Array[List[TypeParamRef]])(using Context): OrderingConstraint =
-      newConstraint(c.boundsMap, c.lowerMap, c.upperMap.updated(poly, entries))
+      newConstraint(c.boundsMap, c.lowerMap, c.upperMap.updated(poly, entries), c.hardVars)
     def initial = Nil
   }
 
   @sharable
-  val empty = new OrderingConstraint(SimpleIdentityMap.empty, SimpleIdentityMap.empty, SimpleIdentityMap.empty)
+  val empty = new OrderingConstraint(SimpleIdentityMap.empty, SimpleIdentityMap.empty, SimpleIdentityMap.empty, SimpleIdentitySet.empty)
 }
 
 import OrderingConstraint._
@@ -134,10 +136,13 @@ import OrderingConstraint._
  *  @param upperMap a map from TypeLambdas to arrays. Each array entry corresponds
  *               to a parameter P of the type lambda; it contains all constrained parameters
  *               Q that are known to be greater than P, i.e. P <: Q.
+ *  @param hardVars a set of type variables that are marked as hard and therefore will not
+ *               undergo a `widenUnion` when instantiated to their lower bound.
  */
 class OrderingConstraint(private val boundsMap: ParamBounds,
                          private val lowerMap : ParamOrdering,
-                         private val upperMap : ParamOrdering) extends Constraint {
+                         private val upperMap : ParamOrdering,
+                         private val hardVars : TypeVars) extends Constraint {
 
   import UnificationDirection.*
 
@@ -277,7 +282,7 @@ class OrderingConstraint(private val boundsMap: ParamBounds,
     val entries1 = new Array[Type](nparams * 2)
     poly.paramInfos.copyToArray(entries1, 0)
     tvars.copyToArray(entries1, nparams)
-    newConstraint(boundsMap.updated(poly, entries1), lowerMap, upperMap).init(poly)
+    newConstraint(boundsMap.updated(poly, entries1), lowerMap, upperMap, hardVars).init(poly)
   }
 
   /** Split dependent parameters off the bounds for parameters in `poly`.
@@ -478,7 +483,8 @@ class OrderingConstraint(private val boundsMap: ParamBounds,
       }
       po.remove(pt).mapValuesNow(removeFromBoundss)
     }
-    newConstraint(boundsMap.remove(pt), removeFromOrdering(lowerMap), removeFromOrdering(upperMap))
+    val hardVars1 = pt.paramRefs.foldLeft(hardVars)((hvs, param) => hvs - typeVarOfParam(param))
+    newConstraint(boundsMap.remove(pt), removeFromOrdering(lowerMap), removeFromOrdering(upperMap), hardVars1)
       .checkNonCyclic()
   }
 
@@ -505,7 +511,7 @@ class OrderingConstraint(private val boundsMap: ParamBounds,
     def swapKey[T](m: ArrayValuedMap[T]) =
       val info = m(from)
       if info == null then m else m.remove(from).updated(to, info)
-    var current = newConstraint(swapKey(boundsMap), swapKey(lowerMap), swapKey(upperMap))
+    var current = newConstraint(swapKey(boundsMap), swapKey(lowerMap), swapKey(upperMap), hardVars)
     def subst[T <: Type](x: T): T = x.subst(from, to).asInstanceOf[T]
     current.foreachParam {(p, i) =>
       current = boundsLens.map(this, current, p, i, subst)
@@ -515,6 +521,11 @@ class OrderingConstraint(private val boundsMap: ParamBounds,
     constr.println(i"renamed $this to $current")
     current.checkNonCyclic()
 
+  def isHard(tv: TypeVar) = hardVars.contains(tv)
+
+  def withHard(tv: TypeVar)(using Context) =
+    newConstraint(boundsMap, lowerMap, upperMap, hardVars + tv)
+
   def instType(tvar: TypeVar): Type = entry(tvar.origin) match
     case _: TypeBounds => NoType
     case tp: TypeParamRef => typeVarOfParam(tp).orElse(tp)
diff --git a/compiler/src/dotty/tools/dotc/core/TypeComparer.scala b/compiler/src/dotty/tools/dotc/core/TypeComparer.scala
index b5fe41095516..78fbea352bf3 100644
--- a/compiler/src/dotty/tools/dotc/core/TypeComparer.scala
+++ b/compiler/src/dotty/tools/dotc/core/TypeComparer.scala
@@ -485,33 +485,42 @@ class TypeComparer(@constructorOnly initctx: Context) extends ConstraintHandling
             false
         }
 
-        // If LHS is a hard union, constrain any type variables of the RHS with it as lower bound
-        // before splitting the LHS into its constituents. That way, the RHS variables are
-        // constraint by the hard union and can be instantiated to it. If we just split and add
-        // the two parts of the LHS separately to the constraint, the lower bound would become
-        // a soft union.
-        def constrainRHSVars(tp2: Type): Boolean = tp2.dealiasKeepRefiningAnnots match
-          case tp2: TypeParamRef if constraint contains tp2 => compareTypeParamRef(tp2)
-          case AndType(tp21, tp22) => constrainRHSVars(tp21) && constrainRHSVars(tp22)
-          case _ => true
+        /** Mark toplevel type vars in `tp2` as hard in the current constraint */
+        def hardenTypeVars(tp2: Type): Unit = tp2.dealiasKeepRefiningAnnots match
+          case tvar: TypeVar if constraint.contains(tvar.origin) =>
+            constraint = constraint.withHard(tvar)
+          case tp2: TypeParamRef if constraint.contains(tp2) =>
+            hardenTypeVars(constraint.typeVarOfParam(tp2))
+          case tp2: AndOrType =>
+            hardenTypeVars(tp2.tp1)
+            hardenTypeVars(tp2.tp2)
+          case _ =>
 
-        widenOK
-        || joinOK
-        || (tp1.isSoft || constrainRHSVars(tp2)) && recur(tp11, tp2) && recur(tp12, tp2)
-        || containsAnd(tp1)
-            && !joined
-            && {
-              joined = true
-              try inFrozenGadt(recur(tp1.join, tp2))
-              finally joined = false
-            }
-            // An & on the left side loses information. We compensate by also trying the join.
-            // This is less ad-hoc than it looks since we produce joins in type inference,
-            // and then need to check that they are indeed supertypes of the original types
-            // under -Ycheck. Test case is i7965.scala.
-            // On the other hand, we could get a combinatorial explosion by applying such joins
-            // recursively, so we do it only once. See i14870.scala as a test case, which would
-            // loop for a very long time without the recursion brake.
+        val res = widenOK || joinOK
+          || recur(tp11, tp2) && recur(tp12, tp2)
+          || containsAnd(tp1)
+              && !joined
+              && {
+                joined = true
+                try inFrozenGadt(recur(tp1.join, tp2))
+                finally joined = false
+              }
+              // An & on the left side loses information. We compensate by also trying the join.
+              // This is less ad-hoc than it looks since we produce joins in type inference,
+              // and then need to check that they are indeed supertypes of the original types
+              // under -Ycheck. Test case is i7965.scala.
+              // On the other hand, we could get a combinatorial explosion by applying such joins
+              // recursively, so we do it only once. See i14870.scala as a test case, which would
+              // loop for a very long time without the recursion brake.
+
+        if res && !tp1.isSoft && state.isCommittable then
+          // We use a heuristic here where every toplevel type variable on the right hand side
+          // is marked so that it converts all soft unions in its lower bound to hard unions
+          // before it is instantiated. The reason is that the variable's instance type will
+          // be a supertype of (decomposed and reconstituted) `tp1`.
+          hardenTypeVars(tp2)
+
+        res
 
       case CapturingType(parent1, refs1) =>
         if subCaptures(refs1, tp2.captureSet, frozenConstraint).isOK && sameBoxed(tp1, tp2, refs1)
@@ -2960,8 +2969,8 @@ object TypeComparer {
   def subtypeCheckInProgress(using Context): Boolean =
     comparing(_.subtypeCheckInProgress)
 
-  def instanceType(param: TypeParamRef, fromBelow: Boolean, maxLevel: Int = Int.MaxValue)(using Context): Type =
-    comparing(_.instanceType(param, fromBelow, maxLevel))
+  def instanceType(param: TypeParamRef, fromBelow: Boolean, widenUnions: Boolean, maxLevel: Int = Int.MaxValue)(using Context): Type =
+    comparing(_.instanceType(param, fromBelow, widenUnions, maxLevel))
 
   def approximation(param: TypeParamRef, fromBelow: Boolean, maxLevel: Int = Int.MaxValue)(using Context): Type =
     comparing(_.approximation(param, fromBelow, maxLevel))
@@ -2981,8 +2990,8 @@ object TypeComparer {
   def addToConstraint(tl: TypeLambda, tvars: List[TypeVar])(using Context): Boolean =
     comparing(_.addToConstraint(tl, tvars))
 
-  def widenInferred(inst: Type, bound: Type)(using Context): Type =
-    comparing(_.widenInferred(inst, bound))
+  def widenInferred(inst: Type, bound: Type, widenUnions: Boolean)(using Context): Type =
+    comparing(_.widenInferred(inst, bound, widenUnions))
 
   def dropTransparentTraits(tp: Type, bound: Type)(using Context): Type =
     comparing(_.dropTransparentTraits(tp, bound))
diff --git a/compiler/src/dotty/tools/dotc/core/TypeOps.scala b/compiler/src/dotty/tools/dotc/core/TypeOps.scala
index c087aac83cb8..35afab770259 100644
--- a/compiler/src/dotty/tools/dotc/core/TypeOps.scala
+++ b/compiler/src/dotty/tools/dotc/core/TypeOps.scala
@@ -537,7 +537,9 @@ object TypeOps:
       override def apply(tp: Type): Type = tp match
         case tp: TypeVar if mapCtx.typerState.constraint.contains(tp) =>
           val lo = TypeComparer.instanceType(
-            tp.origin, fromBelow = variance > 0 || variance == 0 && tp.hasLowerBound)(using mapCtx)
+            tp.origin,
+            fromBelow = variance > 0 || variance == 0 && tp.hasLowerBound,
+            widenUnions = tp.widenUnions)(using mapCtx)
           val lo1 = apply(lo)
           if (lo1 ne lo) lo1 else tp
         case _ =>
diff --git a/compiler/src/dotty/tools/dotc/core/TyperState.scala b/compiler/src/dotty/tools/dotc/core/TyperState.scala
index 81b60c608e28..d2df2a2aebef 100644
--- a/compiler/src/dotty/tools/dotc/core/TyperState.scala
+++ b/compiler/src/dotty/tools/dotc/core/TyperState.scala
@@ -229,11 +229,14 @@ class TyperState() {
         constraint.contains(tl) || other.isRemovable(tl) || {
           val tvars = tl.paramRefs.map(other.typeVarOfParam(_)).collect { case tv: TypeVar => tv }
           if this.isCommittable then
-            tvars.foreach(tvar => if !tvar.inst.exists && !isOwnedAnywhere(this, tvar) then includeVar(tvar))
+            tvars.foreach(tvar =>
+              if !tvar.inst.exists && !isOwnedAnywhere(this, tvar) then includeVar(tvar))
           typeComparer.addToConstraint(tl, tvars)
         }) &&
         // Integrate the additional constraints on type variables from `other`
+        // and merge hardness markers
         constraint.uninstVars.forall(tv =>
+          if other.isHard(tv) then constraint = constraint.withHard(tv)
           val p = tv.origin
           val otherLos = other.lower(p)
           val otherHis = other.upper(p)
diff --git a/compiler/src/dotty/tools/dotc/core/Types.scala b/compiler/src/dotty/tools/dotc/core/Types.scala
index 935d22d14de2..0df3fa368d5a 100644
--- a/compiler/src/dotty/tools/dotc/core/Types.scala
+++ b/compiler/src/dotty/tools/dotc/core/Types.scala
@@ -4714,12 +4714,15 @@ object Types {
      *  is also a singleton type.
      */
     def instantiate(fromBelow: Boolean)(using Context): Type =
-      val tp = TypeComparer.instanceType(origin, fromBelow, nestingLevel)
+      val tp = TypeComparer.instanceType(origin, fromBelow, widenUnions, nestingLevel)
       if myInst.exists then // The line above might have triggered instantiation of the current type variable
         myInst
       else
         instantiateWith(tp)
 
+    /** Widen unions when instantiating this variable in the current context? */
+    def widenUnions(using Context): Boolean = !ctx.typerState.constraint.isHard(this)
+
     /** For uninstantiated type variables: the entry in the constraint (either bounds or
      *  provisional instance value)
      */
diff --git a/compiler/src/dotty/tools/dotc/typer/Namer.scala b/compiler/src/dotty/tools/dotc/typer/Namer.scala
index e6426cc54cd5..ad8d0e50d348 100644
--- a/compiler/src/dotty/tools/dotc/typer/Namer.scala
+++ b/compiler/src/dotty/tools/dotc/typer/Namer.scala
@@ -1888,7 +1888,7 @@ class Namer { typer: Typer =>
         TypeOps.simplify(tp.widenTermRefExpr,
             if defaultTp.exists then TypeOps.SimplifyKeepUnchecked() else null) match
           case ctp: ConstantType if sym.isInlineVal => ctp
-          case tp => TypeComparer.widenInferred(tp, pt)
+          case tp => TypeComparer.widenInferred(tp, pt, widenUnions = true)
 
     // Replace aliases to Unit by Unit itself. If we leave the alias in
     // it would be erased to BoxedUnit.
diff --git a/compiler/src/dotty/tools/dotc/typer/Synthesizer.scala b/compiler/src/dotty/tools/dotc/typer/Synthesizer.scala
index 2e49e0c8bb58..e3f5382ecad7 100644
--- a/compiler/src/dotty/tools/dotc/typer/Synthesizer.scala
+++ b/compiler/src/dotty/tools/dotc/typer/Synthesizer.scala
@@ -514,7 +514,7 @@ class Synthesizer(typer: Typer)(using @constructorOnly c: Context):
                   val tparams = poly.paramRefs
                   val variances = childClass.typeParams.map(_.paramVarianceSign)
                   val instanceTypes = tparams.lazyZip(variances).map((tparam, variance) =>
-                    TypeComparer.instanceType(tparam, fromBelow = variance < 0)
+                    TypeComparer.instanceType(tparam, fromBelow = variance < 0, widenUnions = true)
                   )
                   val instanceType = resType.substParams(poly, instanceTypes)
                   // this is broken in tests/run/i13332intersection.scala,
diff --git a/compiler/src/dotty/tools/dotc/typer/Typer.scala b/compiler/src/dotty/tools/dotc/typer/Typer.scala
index 36e600faefc6..d802ef0df973 100644
--- a/compiler/src/dotty/tools/dotc/typer/Typer.scala
+++ b/compiler/src/dotty/tools/dotc/typer/Typer.scala
@@ -2847,7 +2847,7 @@ class Typer(@constructorOnly nestingLevel: Int = 0) extends Namer
         if (ctx.mode.is(Mode.Pattern)) app1
         else {
           val elemTpes = elems.lazyZip(pts).map((elem, pt) =>
-            TypeComparer.widenInferred(elem.tpe, pt))
+            TypeComparer.widenInferred(elem.tpe, pt, widenUnions = true))
           val resTpe = TypeOps.nestedPairs(elemTpes)
           app1.cast(resTpe)
         }
diff --git a/tests/pos/i14770.scala b/tests/pos/i14770.scala
new file mode 100644
index 000000000000..182ccba21fdf
--- /dev/null
+++ b/tests/pos/i14770.scala
@@ -0,0 +1,25 @@
+type UndefOr[A] = A | Unit
+
+extension [A](maybe: UndefOr[A])
+  def foreach(f: A => Unit): Unit =
+    maybe match
+      case () => ()
+      case a: A => f(a)
+
+trait Foo
+trait Bar
+
+object Baz:
+  var booBap: Foo | Bar = _
+
+def z: UndefOr[Foo | Bar] = ???
+
+@main
+def main =
+  z.foreach(x => Baz.booBap = x)
+
+def test[A](v: A | Unit): A | Unit =  v
+val x1 = test(5: Int | Unit)
+val x2 = test(5: String | Int | Unit)
+val _: Int | Unit = x1
+val _: String | Int | Unit = x2