diff --git a/compiler/backend/src/org/jetbrains/kotlin/codegen/optimization/RedundantNopsCleanupMethodTransformer.kt b/compiler/backend/src/org/jetbrains/kotlin/codegen/optimization/RedundantNopsCleanupMethodTransformer.kt
index fb564b5425a..2ddaf41959c 100644
--- a/compiler/backend/src/org/jetbrains/kotlin/codegen/optimization/RedundantNopsCleanupMethodTransformer.kt
+++ b/compiler/backend/src/org/jetbrains/kotlin/codegen/optimization/RedundantNopsCleanupMethodTransformer.kt
@@ -16,7 +16,6 @@
 
 package org.jetbrains.kotlin.codegen.optimization
 
-import org.jetbrains.kotlin.codegen.optimization.common.InsnSequence
 import org.jetbrains.kotlin.codegen.optimization.common.findNextOrNull
 import org.jetbrains.kotlin.codegen.optimization.common.isMeaningful
 import org.jetbrains.kotlin.codegen.optimization.transformer.MethodTransformer
@@ -53,41 +52,35 @@ class RedundantNopsCleanupMethodTransformer : MethodTransformer() {
     }
 
     private fun recordNopsRequiredForDebugger(methodNode: MethodNode, requiredNops: MutableSet<AbstractInsnNode>) {
-        // We two subsets of labels that are "special" for the debugger:
+        // We consider two subsets of labels that are special for the debugger:
+        //
         //  1) Labels for line numbers.
         //  2) Labels for observable local variables lifetimes.
         //     NB this includes synthetic variables denoting inlined function bodies and arguments
         //     (see JvmAbi.LOCAL_VARIABLE_NAME_PREFIX_INLINE_FUNCTION, JvmAbi.LOCAL_VARIABLE_NAME_PREFIX_INLINE_ARGUMENT).
         //
-        // If we enumerate labels in a given subset in order of occurrence in the method code:
-        //      L[0], L[1], ..., L[n-1], L[n]
-        // then for each k, 1 <= k <= n-1:
-        // an instruction interval I[k] = [L[k]; L[k+1]) should contain at least one bytecode instruction (which can be a NOP).
-
-        for (insn in methodNode.instructions) {
-            if (insn is LineNumberNode) {
-                val nextLineNumber = insn.findNextOrNull { it is LineNumberNode && it.line != insn.line }
-                requiredNops.addIfNotNull(getRequiredNopInRange(insn, nextLineNumber))
-            }
-        }
-
-        val localVariableLabels = run {
-            val labels = hashSetOf<LabelNode>().apply {
+        // We must not remove nops if that leads to a line number having no instructions before the next line number
+        // or a linenumber crossing a local variable lifetime boundary.
+        //
+        // We enumerate all special labels, and make sure to leave nops if they are the only real
+        // instruction between a line number label and any other special label.
+        val specialLabels = run {
+            val localVarLables = hashSetOf<LabelNode>().apply {
                 for (localVariable in methodNode.localVariables) {
                     add(localVariable.start)
                     add(localVariable.end)
                 }
             }
 
-            methodNode.instructions.toArray().filter { labels.contains(it) }
+            methodNode.instructions.toArray().filter { localVarLables.contains(it) || it is LineNumberNode }
         }
 
-
-        for (i in 0..localVariableLabels.size - 2) {
-            val begin = localVariableLabels[i]
-            val end = localVariableLabels[i + 1]
-            if (InsnSequence(begin, end).any { it in requiredNops }) continue
-            requiredNops.addIfNotNull(getRequiredNopInRange(begin, end))
+        for (i in 0..specialLabels.size - 2) {
+            val begin = specialLabels[i]
+            val end = specialLabels[i + 1]
+            if (begin is LineNumberNode) {
+                requiredNops.addIfNotNull(getRequiredNopInRange(begin, end))
+            }
         }
     }
 
diff --git a/compiler/testData/codegen/bytecodeText/coercionToUnitOptimization/nopInlineFuns.kt b/compiler/testData/codegen/bytecodeText/coercionToUnitOptimization/nopInlineFuns.kt
index 17d8063be40..8632b28e9dc 100644
--- a/compiler/testData/codegen/bytecodeText/coercionToUnitOptimization/nopInlineFuns.kt
+++ b/compiler/testData/codegen/bytecodeText/coercionToUnitOptimization/nopInlineFuns.kt
@@ -23,4 +23,4 @@ fun simpleFunVoid(f: () -> Unit): Unit {
     return f()
 }
 
-// 3 NOP
+// 0 NOP
diff --git a/idea/jvm-debugger/jvm-debugger-test/testData/stepping/stepOver/stepOverInlinedLambdaStdlib.out b/idea/jvm-debugger/jvm-debugger-test/testData/stepping/stepOver/stepOverInlinedLambdaStdlib.out
index e15020bb03c..a95524cfed5 100644
--- a/idea/jvm-debugger/jvm-debugger-test/testData/stepping/stepOver/stepOverInlinedLambdaStdlib.out
+++ b/idea/jvm-debugger/jvm-debugger-test/testData/stepping/stepOver/stepOverInlinedLambdaStdlib.out
@@ -1,4 +1,3 @@
-// IGNORE_BACKEND: JVM_IR
 LineBreakpoint created at stepOverInlinedLambdaStdlib.kt:5
 Run Java
 Connected to the target VM
diff --git a/tests/mute-common.csv b/tests/mute-common.csv
index 0e9d9b944c7..5ac6afd500b 100644
--- a/tests/mute-common.csv
+++ b/tests/mute-common.csv
@@ -48,7 +48,6 @@ org.jetbrains.kotlin.util.KotlinVersionsTest.testVersionsAreConsistent, KT-35567
 org.jetbrains.kotlin.jvm.compiler.CompileKotlinAgainstJavaTestGenerated.WithAPT.testClassWithTypeParameter, KT-36448,,
 org.jetbrains.kotlin.jvm.compiler.CompileKotlinAgainstJavaTestGenerated.WithoutAPT.testClassWithTypeParameter, KT-36448,,
 org.jetbrains.kotlin.idea.debugger.test.AsyncStackTraceTestGenerated.testAsyncLambdas, redesign test AsyncStackTraces,,
-org.jetbrains.kotlin.idea.debugger.test.KotlinSteppingTestGenerated.StepOver.testStepOverInlinedLambdaStdlib, fails after advancing bootstrap KT-37879,,
 org.jetbrains.kotlin.incremental.IncrementalJsKlibCompilerRunnerTestGenerated.ClassHierarchyAffected.testMethodRemoved, full fledged FO in klib required,,
 org.jetbrains.kotlin.idea.quickfix.QuickFixTestGenerated.ConvertToAnonymousObject.testHasConcreateMember2, Unprocessed,,
 org.jetbrains.uast.test.kotlin.KotlinUastTypesTest.testEa101715, Unprocessed,,
@@ -83,4 +82,4 @@ org.jetbrains.kotlin.asJava.classes.UltraLightClassSanityTestGenerated.testAnnot
 org.jetbrains.kotlin.idea.caches.resolve.IdeLightClassTestGenerated.Facades.testSingleJvmClassName, Invalid behavior of old lightclasses in common tests,,
 org.jetbrains.kotlin.idea.caches.resolve.IdeLightClassTestGenerated.CompilationErrors.testActualTypeAliasCustomJvmPackageName, Invalid behavior of old lightclasses in common tests,,
 org.jetbrains.kotlin.idea.caches.resolve.IdeLightClassTestGenerated.CompilationErrors.testJvmPackageName, Invalid behavior of old lightclasses in common tests,,
-org.jetbrains.uast.test.kotlin.SimpleKotlinRenderLogTest.testReceiverFun, Analysing of facade annotation with receiver site is broken (connected with KT-40403),,
\ No newline at end of file
+org.jetbrains.uast.test.kotlin.SimpleKotlinRenderLogTest.testReceiverFun, Analysing of facade annotation with receiver site is broken (connected with KT-40403),,