diff --git a/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirOldFrontendDiagnosticsTestGenerated.java b/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirOldFrontendDiagnosticsTestGenerated.java
index b3adf471d4f..c8b89d6c9bd 100644
--- a/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirOldFrontendDiagnosticsTestGenerated.java
+++ b/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirOldFrontendDiagnosticsTestGenerated.java
@@ -16979,6 +16979,12 @@ public class FirOldFrontendDiagnosticsTestGenerated extends AbstractFirDiagnosti
                     runTest("compiler/testData/diagnostics/tests/inference/substitutions/hideLocalTypeForReturnTypeOfSingleExpressionFunction.kt");
                 }
 
+                @Test
+                @TestMetadata("hideNullableLocalTypeInPublicPosition.kt")
+                public void testHideNullableLocalTypeInPublicPosition() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/substitutions/hideNullableLocalTypeInPublicPosition.kt");
+                }
+
                 @Test
                 @TestMetadata("kt32189returnTypeWithTypealiasSubtitution.kt")
                 public void testKt32189returnTypeWithTypealiasSubtitution() throws Exception {
diff --git a/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirOldFrontendDiagnosticsWithLightTreeTestGenerated.java b/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirOldFrontendDiagnosticsWithLightTreeTestGenerated.java
index 95fefeec855..1300366e942 100644
--- a/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirOldFrontendDiagnosticsWithLightTreeTestGenerated.java
+++ b/compiler/fir/analysis-tests/tests-gen/org/jetbrains/kotlin/test/runners/FirOldFrontendDiagnosticsWithLightTreeTestGenerated.java
@@ -16979,6 +16979,12 @@ public class FirOldFrontendDiagnosticsWithLightTreeTestGenerated extends Abstrac
                     runTest("compiler/testData/diagnostics/tests/inference/substitutions/hideLocalTypeForReturnTypeOfSingleExpressionFunction.kt");
                 }
 
+                @Test
+                @TestMetadata("hideNullableLocalTypeInPublicPosition.kt")
+                public void testHideNullableLocalTypeInPublicPosition() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/substitutions/hideNullableLocalTypeInPublicPosition.kt");
+                }
+
                 @Test
                 @TestMetadata("kt32189returnTypeWithTypealiasSubtitution.kt")
                 public void testKt32189returnTypeWithTypealiasSubtitution() throws Exception {
diff --git a/compiler/fir/providers/src/org/jetbrains/kotlin/fir/types/TypeUtils.kt b/compiler/fir/providers/src/org/jetbrains/kotlin/fir/types/TypeUtils.kt
index 88c8ca0ee62..2b47145cb41 100644
--- a/compiler/fir/providers/src/org/jetbrains/kotlin/fir/types/TypeUtils.kt
+++ b/compiler/fir/providers/src/org/jetbrains/kotlin/fir/types/TypeUtils.kt
@@ -383,11 +383,8 @@ private fun FirTypeRef.hideLocalTypeIfNeeded(
 ): FirTypeRef {
     if (!shouldHideLocalType(containingCallableVisibility, isInlineFunction)) return this
 
-    val firClass =
-        (((this as? FirResolvedTypeRef)
-            ?.type as? ConeClassLikeType)
-            ?.lookupTag as? ConeClassLookupTagWithFixedSymbol)
-            ?.symbol?.fir
+    val coneType = coneTypeSafe<ConeClassLikeType>() ?: return this
+    val firClass = (coneType.lookupTag as? ConeClassLookupTagWithFixedSymbol)?.symbol?.fir
     if (firClass !is FirAnonymousObject) {
         // NB: local classes are acceptable here, but reported by EXPOSED_* checkers as errors
         return this
@@ -402,6 +399,7 @@ private fun FirTypeRef.hideLocalTypeIfNeeded(
         var result = superType
         val resultTypeArguments = result.type.typeArguments
 
+        result = result.withReplacedConeType(result.type.withNullability(coneType.nullability, session.typeContext))
         if (resultTypeArguments.isNotEmpty() && resultTypeArguments.size == coneType.typeArguments.size) {
             val substitution = mutableMapOf<FirTypeParameterSymbol, ConeKotlinType>()
             for (index in resultTypeArguments.indices) {
@@ -410,9 +408,7 @@ private fun FirTypeRef.hideLocalTypeIfNeeded(
                 val symbol = (key as? ConeTypeParameterType)?.lookupTag?.typeParameterSymbol ?: continue
                 substitution[symbol] = value.type!!
             }
-
-            val substituted = ConeSubstitutorByMap(substitution, session).substituteOrSelf(result.type)
-            result = substituted.toFirResolvedTypeRef(superType.source, superType.delegatedTypeRef)
+            result = result.withReplacedConeType(ConeSubstitutorByMap(substitution, session).substituteOrSelf(result.type))
         }
 
         return if (newKind is KtFakeSourceElementKind) result.copyWithNewSourceKind(newKind) else result
diff --git a/compiler/testData/diagnostics/tests/inference/substitutions/hideNullableLocalTypeInPublicPosition.fir.kt b/compiler/testData/diagnostics/tests/inference/substitutions/hideNullableLocalTypeInPublicPosition.fir.kt
new file mode 100644
index 00000000000..fbc2c17e3db
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/substitutions/hideNullableLocalTypeInPublicPosition.fir.kt
@@ -0,0 +1,18 @@
+// ISSUE: KT-30054
+interface I {
+    fun foo(): String
+}
+
+fun bar(condition: Boolean) /*: I? */ =
+    if (condition)
+        object : I {
+            override fun foo() = "should check for null first"
+            fun baz() = "invisible"
+        }
+    else null
+
+fun main() {
+    bar(false).<!UNRESOLVED_REFERENCE!>baz<!>()
+    bar(false)<!UNSAFE_CALL!>.<!>foo()
+    bar(false)?.foo()
+}
diff --git a/compiler/testData/diagnostics/tests/inference/substitutions/hideNullableLocalTypeInPublicPosition.kt b/compiler/testData/diagnostics/tests/inference/substitutions/hideNullableLocalTypeInPublicPosition.kt
new file mode 100644
index 00000000000..2e4e5e03f3a
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/substitutions/hideNullableLocalTypeInPublicPosition.kt
@@ -0,0 +1,18 @@
+// ISSUE: KT-30054
+interface I {
+    fun foo(): String
+}
+
+fun bar(condition: Boolean) /*: I? */ =
+    if (condition)
+        object : I {
+            override fun foo() = "should check for null first"
+            fun baz() = "invisible"
+        }
+    else null
+
+fun main() {
+    bar(false).<!UNRESOLVED_REFERENCE!>baz<!>()
+    bar(false).foo()
+    bar(false)<!UNNECESSARY_SAFE_CALL!>?.<!>foo()
+}
diff --git a/compiler/testData/diagnostics/tests/inference/substitutions/hideNullableLocalTypeInPublicPosition.txt b/compiler/testData/diagnostics/tests/inference/substitutions/hideNullableLocalTypeInPublicPosition.txt
new file mode 100644
index 00000000000..e619714080d
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/substitutions/hideNullableLocalTypeInPublicPosition.txt
@@ -0,0 +1,11 @@
+package
+
+public fun bar(/*0*/ condition: kotlin.Boolean): I
+public fun main(): kotlin.Unit
+
+public interface I {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract fun foo(): kotlin.String
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
diff --git a/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/DiagnosticTestGenerated.java b/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/DiagnosticTestGenerated.java
index ae6d2e6c1ae..46969ac3e13 100644
--- a/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/DiagnosticTestGenerated.java
+++ b/compiler/tests-common-new/tests-gen/org/jetbrains/kotlin/test/runners/DiagnosticTestGenerated.java
@@ -16985,6 +16985,12 @@ public class DiagnosticTestGenerated extends AbstractDiagnosticTest {
                     runTest("compiler/testData/diagnostics/tests/inference/substitutions/hideLocalTypeForReturnTypeOfSingleExpressionFunction.kt");
                 }
 
+                @Test
+                @TestMetadata("hideNullableLocalTypeInPublicPosition.kt")
+                public void testHideNullableLocalTypeInPublicPosition() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/substitutions/hideNullableLocalTypeInPublicPosition.kt");
+                }
+
                 @Test
                 @TestMetadata("kt32189returnTypeWithTypealiasSubtitution.kt")
                 public void testKt32189returnTypeWithTypealiasSubtitution() throws Exception {