diff --git a/compiler/fir/resolve/tests/org/jetbrains/kotlin/fir/FirOldFrontendDiagnosticsTestGenerated.java b/compiler/fir/resolve/tests/org/jetbrains/kotlin/fir/FirOldFrontendDiagnosticsTestGenerated.java
index 7d7cc50e39e..9ac22d573d1 100644
--- a/compiler/fir/resolve/tests/org/jetbrains/kotlin/fir/FirOldFrontendDiagnosticsTestGenerated.java
+++ b/compiler/fir/resolve/tests/org/jetbrains/kotlin/fir/FirOldFrontendDiagnosticsTestGenerated.java
@@ -18079,6 +18079,11 @@ public class FirOldFrontendDiagnosticsTestGenerated extends AbstractFirOldFronte
             runTest("compiler/testData/diagnostics/tests/regressions/kt35668.kt");
         }
 
+        @TestMetadata("kt36222.kt")
+        public void testKt36222() throws Exception {
+            runTest("compiler/testData/diagnostics/tests/regressions/kt36222.kt");
+        }
+
         @TestMetadata("kt3647.kt")
         public void testKt3647() throws Exception {
             runTest("compiler/testData/diagnostics/tests/regressions/kt3647.kt");
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/DiagnosticReporterByTrackingStrategy.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/DiagnosticReporterByTrackingStrategy.kt
index a3047b46541..5e7f867b679 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/DiagnosticReporterByTrackingStrategy.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/DiagnosticReporterByTrackingStrategy.kt
@@ -33,6 +33,8 @@ import org.jetbrains.kotlin.resolve.descriptorUtil.module
 import org.jetbrains.kotlin.resolve.scopes.receivers.ExpressionReceiver
 import org.jetbrains.kotlin.types.KotlinType
 import org.jetbrains.kotlin.types.expressions.ControlStructureTypingUtils
+import org.jetbrains.kotlin.types.typeUtil.isNullableNothing
+import org.jetbrains.kotlin.types.typeUtil.makeNullable
 import org.jetbrains.kotlin.utils.addToStdlib.cast
 import org.jetbrains.kotlin.utils.addToStdlib.safeAs
 
@@ -333,12 +335,15 @@ class DiagnosticReporterByTrackingStrategy(
 
                 (position as? ExpectedTypeConstraintPosition)?.let {
                     val call = it.topLevelCall.psiKotlinCall.psiCall.callElement.safeAs<KtExpression>()
+                    val inferredType =
+                        if (!constraintError.lowerKotlinType.isNullableNothing()) constraintError.lowerKotlinType
+                        else constraintError.upperKotlinType.makeNullable()
                     reportIfNonNull(call) {
                         trace.report(
                             Errors.TYPE_MISMATCH.on(
                                 it,
                                 constraintError.upperKotlinType,
-                                constraintError.lowerKotlinType
+                                inferredType
                             )
                         )
                     }
diff --git a/compiler/testData/diagnostics/tests/regressions/kt36222.fir.kt b/compiler/testData/diagnostics/tests/regressions/kt36222.fir.kt
new file mode 100644
index 00000000000..d7a23988aaa
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/regressions/kt36222.fir.kt
@@ -0,0 +1,9 @@
+// !LANGUAGE: +NewInference
+// !DIAGNOSTICS: -UNUSED_PARAMETER
+
+fun foo(f: () -> String) {}
+fun <K> select(x: K, y: K): K = x
+
+fun test() {
+    foo { select("non-null", null) } // inferred String? but String is expected
+}
diff --git a/compiler/testData/diagnostics/tests/regressions/kt36222.kt b/compiler/testData/diagnostics/tests/regressions/kt36222.kt
new file mode 100644
index 00000000000..e62d0c00d6d
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/regressions/kt36222.kt
@@ -0,0 +1,10 @@
+// !LANGUAGE: +NewInference
+// !DIAGNOSTICS: -UNUSED_PARAMETER
+
+fun foo(f: () -> String) {}
+fun <K> select(x: K, y: K): K = x
+
+fun test() {
+    foo { <!TYPE_MISMATCH!>select("non-null", null)<!> } // inferred String? but String is expected
+}
+
diff --git a/compiler/testData/diagnostics/tests/regressions/kt36222.txt b/compiler/testData/diagnostics/tests/regressions/kt36222.txt
new file mode 100644
index 00000000000..eea1c57527d
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/regressions/kt36222.txt
@@ -0,0 +1,5 @@
+package
+
+public fun foo(/*0*/ f: () -> kotlin.String): kotlin.Unit
+public fun </*0*/ K> select(/*0*/ x: K, /*1*/ y: K): K
+public fun test(): kotlin.Unit
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
index 4b971012f9c..ddddc19fe4d 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
@@ -18091,6 +18091,11 @@ public class DiagnosticsTestGenerated extends AbstractDiagnosticsTestWithFirVali
                 runTest("compiler/testData/diagnostics/tests/regressions/kt35668.kt");
             }
 
+            @TestMetadata("kt36222.kt")
+            public void testKt36222() throws Exception {
+                runTest("compiler/testData/diagnostics/tests/regressions/kt36222.kt");
+            }
+
             @TestMetadata("kt3647.kt")
             public void testKt3647() throws Exception {
                 runTest("compiler/testData/diagnostics/tests/regressions/kt3647.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
index 041d85739ec..b15c013594b 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
@@ -18081,6 +18081,11 @@ public class DiagnosticsUsingJavacTestGenerated extends AbstractDiagnosticsUsing
                 runTest("compiler/testData/diagnostics/tests/regressions/kt35668.kt");
             }
 
+            @TestMetadata("kt36222.kt")
+            public void testKt36222() throws Exception {
+                runTest("compiler/testData/diagnostics/tests/regressions/kt36222.kt");
+            }
+
             @TestMetadata("kt3647.kt")
             public void testKt3647() throws Exception {
                 runTest("compiler/testData/diagnostics/tests/regressions/kt3647.kt");