Don't approximate abbreviation during substitution it as it can't be projected at top-level

^KT-42036 Fixed

core/descriptors/src/org/jetbrains/kotlin/resolve/calls/inference/CapturedTypeConstructor.kt

@@ -122,7 +122,7 @@ fun TypeSubstitution.wrapWithCapturingSubstitution(needApproximation: Boolean =
             this.arguments.zip(this.parameters).map {
                 it.first.createCapturedIfNeeded(it.second)
             }.toTypedArray(),
-            approximateCapturedTypes = needApproximation
+            approximateContravariantCapturedTypes = needApproximation
         )
     else
         object : DelegatedTypeSubstitution(this@wrapWithCapturingSubstitution) {

core/descriptors/src/org/jetbrains/kotlin/types/TypeSubstitution.kt

@@ -88,7 +88,7 @@ abstract class TypeConstructorSubstitution : TypeSubstitution() {
 class IndexedParametersSubstitution(
     val parameters: Array<TypeParameterDescriptor>,
     val arguments: Array<TypeProjection>,
-    private val approximateCapturedTypes: Boolean = false
+    private val approximateContravariantCapturedTypes: Boolean = false
 ) : TypeSubstitution() {
     init {
         assert(parameters.size <= arguments.size) {
@@ -103,7 +103,7 @@ class IndexedParametersSubstitution(
 
     override fun isEmpty(): Boolean = arguments.isEmpty()
 
-    override fun approximateContravariantCapturedTypes() = approximateCapturedTypes
+    override fun approximateContravariantCapturedTypes() = approximateContravariantCapturedTypes
 
     override fun get(key: KotlinType): TypeProjection? {
         val parameter = key.constructor.declarationDescriptor as? TypeParameterDescriptor ?: return null

core/descriptors/src/org/jetbrains/kotlin/types/TypeSubstitutor.java

@@ -54,6 +54,19 @@ public class TypeSubstitutor implements TypeSubstitutorMarker {
         return new TypeSubstitutor(substitution);
     }
 
+    @NotNull
+    public TypeSubstitutor replaceWithNonApproximatingSubstitution() {
+        if (!(substitution instanceof IndexedParametersSubstitution) || !substitution.approximateContravariantCapturedTypes()) return this;
+
+        return new TypeSubstitutor(
+                new IndexedParametersSubstitution(
+                        ((IndexedParametersSubstitution) substitution).getParameters(),
+                        ((IndexedParametersSubstitution) substitution).getArguments(),
+                        false
+                )
+        );
+    }
+
     @NotNull
     public static TypeSubstitutor createChainedSubstitutor(@NotNull TypeSubstitution first, @NotNull TypeSubstitution second) {
         return create(DisjointKeysUnionTypeSubstitution.create(first, second));
@@ -302,7 +315,9 @@ public class TypeSubstitutor implements TypeSubstitutorMarker {
         KotlinType substitutedAbbreviation = null;
         SimpleType abbreviation = SpecialTypesKt.getAbbreviation(type);
         if (abbreviation != null) {
-            substitutedAbbreviation = substitute(abbreviation, Variance.INVARIANT);
+            // We shouldn't approximate abbreviation at the top-level as they can't be projected: below we substitute this always as invariant
+            TypeSubstitutor substitutorForAbbreviation = replaceWithNonApproximatingSubstitution();
+            substitutedAbbreviation = substitutorForAbbreviation.substitute(abbreviation, Variance.INVARIANT);
         }
 
         List<TypeProjection> substitutedArguments = substituteTypeArguments(