Don't approximate captured types while substitute them in upper bound position

compiler/testData/diagnostics/tests/generics/projectionsScope/typeParameterBounds.kt

@@ -12,15 +12,15 @@ class A<T> {
 }
 
 fun foo2(a: A<out CharSequence>, b: A<in CharSequence>) {
-    a.foo1(Out<CharSequence>())
-    a.foo1<Out<CharSequence>>(Out())
+    a.foo1(<!TYPE_MISMATCH!>Out<CharSequence>()<!>)
+    a.foo1<<!UPPER_BOUND_VIOLATED!>Out<CharSequence><!>>(Out())
 
     a.foo1(Out())
     a.foo1(Out<Nothing>())
 
     a.foo2(Inv())
-    a.foo2(Inv<CharSequence>())
-    a.foo2<Inv<CharSequence>>(Inv())
+    a.foo2(<!TYPE_MISMATCH!>Inv<CharSequence>()<!>)
+    a.foo2<<!UPPER_BOUND_VIOLATED!>Inv<CharSequence><!>>(<!TYPE_MISMATCH!>Inv()<!>)
 
     a.foo3(In())
     a.foo3(In<CharSequence>())
@@ -31,12 +31,12 @@ fun foo2(a: A<out CharSequence>, b: A<in CharSequence>) {
     b.foo1<Out<CharSequence>>(Out())
 
     b.foo2(Inv())
-    b.foo2(Inv<CharSequence>())
-    b.foo2<Inv<CharSequence>>(Inv())
+    b.foo2(<!TYPE_MISMATCH!>Inv<CharSequence>()<!>)
+    b.foo2<<!UPPER_BOUND_VIOLATED!>Inv<CharSequence><!>>(<!TYPE_MISMATCH!>Inv()<!>)
 
 
-    b.foo3(In<CharSequence>())
-    b.foo3<In<CharSequence>>(In())
+    b.foo3(<!TYPE_MISMATCH!>In<CharSequence>()<!>)
+    b.foo3<<!UPPER_BOUND_VIOLATED!>In<CharSequence><!>>(In())
 
     b.foo3(In<Any?>())
     b.foo3(In())

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

@@ -20,10 +20,12 @@ import kotlin.annotations.jvm.Mutable;
 import kotlin.annotations.jvm.ReadOnly;
 import org.jetbrains.annotations.NotNull;
 import org.jetbrains.annotations.Nullable;
+import org.jetbrains.kotlin.descriptors.ClassifierDescriptor;
 import org.jetbrains.kotlin.descriptors.DeclarationDescriptor;
 import org.jetbrains.kotlin.descriptors.SourceElement;
 import org.jetbrains.kotlin.descriptors.TypeParameterDescriptor;
 import org.jetbrains.kotlin.descriptors.impl.TypeParameterDescriptorImpl;
+import org.jetbrains.kotlin.types.typeUtil.TypeUtilsKt;
 
 import java.util.HashMap;
 import java.util.List;
@@ -55,7 +57,7 @@ public class DescriptorSubstitutor {
             @NotNull @Mutable List<TypeParameterDescriptor> result,
             @Nullable boolean[] wereChanges
     ) {
-        Map<TypeConstructor, TypeProjection> mutableSubstitution = new HashMap<TypeConstructor, TypeProjection>();
+        Map<TypeConstructor, TypeProjection> mutableSubstitutionMap = new HashMap<TypeConstructor, TypeProjection>();
 
         Map<TypeParameterDescriptor, TypeParameterDescriptorImpl> substitutedMap = new HashMap<TypeParameterDescriptor, TypeParameterDescriptorImpl>();
         int index = 0;
@@ -71,20 +73,26 @@ public class DescriptorSubstitutor {
                     descriptor.getStorageManager()
             );
 
-            mutableSubstitution.put(descriptor.getTypeConstructor(), new TypeProjectionImpl(substituted.getDefaultType()));
+            mutableSubstitutionMap.put(descriptor.getTypeConstructor(), new TypeProjectionImpl(substituted.getDefaultType()));
 
             substitutedMap.put(descriptor, substituted);
             result.add(substituted);
         }
 
-        TypeSubstitutor substitutor = TypeSubstitutor.createChainedSubstitutor(
-                originalSubstitution, TypeConstructorSubstitution.createByConstructorsMap(mutableSubstitution)
-        );
+        TypeConstructorSubstitution mutableSubstitution = TypeConstructorSubstitution.createByConstructorsMap(mutableSubstitutionMap);
+        TypeSubstitutor substitutor = TypeSubstitutor.createChainedSubstitutor(originalSubstitution, mutableSubstitution);
+        TypeSubstitutor nonApproximatingSubstitutor =
+                TypeSubstitutor.createChainedSubstitutor(originalSubstitution.replaceWithNonApproximating(), mutableSubstitution);
 
         for (TypeParameterDescriptor descriptor : typeParameters) {
             TypeParameterDescriptorImpl substituted = substitutedMap.get(descriptor);
             for (KotlinType upperBound : descriptor.getUpperBounds()) {
-                KotlinType substitutedBound = substitutor.substitute(upperBound, Variance.OUT_VARIANCE);
+                ClassifierDescriptor upperBoundDeclaration = upperBound.getConstructor().getDeclarationDescriptor();
+                TypeSubstitutor boundSubstitutor = upperBoundDeclaration instanceof TypeParameterDescriptor && TypeUtilsKt.hasTypeParameterRecursiveBounds((TypeParameterDescriptor) upperBoundDeclaration)
+                                                   ? substitutor
+                                                   : nonApproximatingSubstitutor;
+
+                KotlinType substitutedBound = boundSubstitutor.substitute(upperBound, Variance.OUT_VARIANCE);
                 if (substitutedBound == null) return null;
 
                 if (substitutedBound != upperBound && wereChanges != null) {

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

@@ -42,6 +42,16 @@ abstract class TypeSubstitution {
     open fun filterAnnotations(annotations: Annotations) = annotations
 
     fun buildSubstitutor(): TypeSubstitutor = TypeSubstitutor.create(this)
+
+    fun replaceWithNonApproximating() = object : TypeSubstitution() {
+        override fun get(key: KotlinType) = this@TypeSubstitution[key]
+        override fun approximateCapturedTypes() = false
+        override fun approximateContravariantCapturedTypes() = false
+        override fun filterAnnotations(annotations: Annotations) = this@TypeSubstitution.filterAnnotations(annotations)
+        override fun prepareTopLevelType(topLevelType: KotlinType, position: Variance) =
+            this@TypeSubstitution.prepareTopLevelType(topLevelType, position)
+        override fun isEmpty() = this@TypeSubstitution.isEmpty()
+    }
 }
 
 abstract class TypeConstructorSubstitution : TypeSubstitution() {

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

@@ -216,6 +216,7 @@ private fun KotlinType.extractTypeParametersFromUpperBounds(
     }
 }
 
+@JvmOverloads
 fun hasTypeParameterRecursiveBounds(
     typeParameter: TypeParameterDescriptor,
     selfConstructor: TypeConstructor? = null,