diff --git a/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/DiagnosisCompilerTestFE10TestdataTestGenerated.java b/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/DiagnosisCompilerTestFE10TestdataTestGenerated.java
index b3e68f01d65..fb2646cdd0f 100644
--- a/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/DiagnosisCompilerTestFE10TestdataTestGenerated.java
+++ b/analysis/low-level-api-fir/tests/org/jetbrains/kotlin/analysis/low/level/api/fir/diagnostic/compiler/based/DiagnosisCompilerTestFE10TestdataTestGenerated.java
@@ -13670,6 +13670,12 @@ public class DiagnosisCompilerTestFE10TestdataTestGenerated extends AbstractDiag
                 runTest("compiler/testData/diagnostics/tests/inference/discardInapplicableCandidateWithNotSatisfyingSelfType.kt");
             }
 
+            @Test
+            @TestMetadata("dontThrowEmptyIntersectionException.kt")
+            public void testDontThrowEmptyIntersectionException() throws Exception {
+                runTest("compiler/testData/diagnostics/tests/inference/dontThrowEmptyIntersectionException.kt");
+            }
+
             @Test
             @TestMetadata("equalitySubstitutionInsideNonInvariantType.kt")
             public void testEqualitySubstitutionInsideNonInvariantType() throws Exception {
@@ -14327,6 +14333,12 @@ public class DiagnosisCompilerTestFE10TestdataTestGenerated extends AbstractDiag
                     runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_4.kt");
                 }
 
+                @Test
+                @TestMetadata("kt48031.kt")
+                public void testKt48031() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt48031.kt");
+                }
+
                 @Test
                 @TestMetadata("kt49285.kt")
                 public void testKt49285() throws Exception {
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 af8283a2190..c2a623de926 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
@@ -14333,6 +14333,12 @@ public class FirOldFrontendDiagnosticsTestGenerated extends AbstractFirDiagnosti
                     runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_4.kt");
                 }
 
+                @Test
+                @TestMetadata("kt48031.kt")
+                public void testKt48031() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt48031.kt");
+                }
+
                 @Test
                 @TestMetadata("kt49285.kt")
                 public void testKt49285() 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 560120ff045..cefaed3433d 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
@@ -14333,6 +14333,12 @@ public class FirOldFrontendDiagnosticsWithLightTreeTestGenerated extends Abstrac
                     runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_4.kt");
                 }
 
+                @Test
+                @TestMetadata("kt48031.kt")
+                public void testKt48031() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt48031.kt");
+                }
+
                 @Test
                 @TestMetadata("kt49285.kt")
                 public void testKt49285() throws Exception {
diff --git a/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/ResolveUtils.kt b/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/ResolveUtils.kt
index 0a565914b3c..b7614d9468e 100644
--- a/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/ResolveUtils.kt
+++ b/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/ResolveUtils.kt
@@ -53,6 +53,7 @@ import org.jetbrains.kotlin.resolve.ForbiddenNamedArgumentsTarget
 import org.jetbrains.kotlin.resolve.calls.tower.CandidateApplicability
 import org.jetbrains.kotlin.types.ConstantValueKind
 import org.jetbrains.kotlin.types.SmartcastStability
+import org.jetbrains.kotlin.types.model.safeSubstitute
 import org.jetbrains.kotlin.utils.addIfNotNull
 import org.jetbrains.kotlin.utils.addToStdlib.safeAs
 import kotlin.contracts.ExperimentalContracts
@@ -488,7 +489,9 @@ fun BodyResolveComponents.initialTypeOfCandidate(candidate: Candidate): ConeKotl
 }
 
 private fun initialTypeOfCandidate(candidate: Candidate, typeRef: FirResolvedTypeRef): ConeKotlinType {
-    return candidate.substitutor.substituteOrSelf(typeRef.type)
+    val system = candidate.system
+    val resultingSubstitutor = system.buildCurrentSubstitutor()
+    return resultingSubstitutor.safeSubstitute(system, candidate.substitutor.substituteOrSelf(typeRef.type)) as ConeKotlinType
 }
 
 fun FirCallableDeclaration.getContainingClass(session: FirSession): FirRegularClass? =
diff --git a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/KotlinCallCompleter.kt b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/KotlinCallCompleter.kt
index 139e7d82a74..45740d7a621 100644
--- a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/KotlinCallCompleter.kt
+++ b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/KotlinCallCompleter.kt
@@ -15,9 +15,7 @@ import org.jetbrains.kotlin.resolve.calls.components.candidate.CallableReference
 import org.jetbrains.kotlin.resolve.calls.components.candidate.SimpleResolutionCandidate
 import org.jetbrains.kotlin.resolve.calls.inference.NewConstraintSystem
 import org.jetbrains.kotlin.resolve.calls.inference.addEqualityConstraintIfCompatible
-import org.jetbrains.kotlin.resolve.calls.inference.components.KotlinConstraintSystemCompleter
-import org.jetbrains.kotlin.resolve.calls.inference.components.ConstraintSystemCompletionMode
-import org.jetbrains.kotlin.resolve.calls.inference.components.TrivialConstraintTypeInferenceOracle
+import org.jetbrains.kotlin.resolve.calls.inference.components.*
 import org.jetbrains.kotlin.resolve.calls.inference.model.ConstraintStorage.Empty.hasContradiction
 import org.jetbrains.kotlin.resolve.calls.inference.model.ExpectedTypeConstraintPositionImpl
 import org.jetbrains.kotlin.resolve.calls.model.*
@@ -304,7 +302,10 @@ class KotlinCallCompleter(
 
     private fun ResolutionCandidate.substitutedReturnType(): UnwrappedType? {
         val returnType = resolvedCall.candidateDescriptor.returnType?.unwrap() ?: return null
-        return resolvedCall.freshVariablesSubstitutor.safeSubstitute(returnType)
+        val substitutedReturnTypeWithVariables = resolvedCall.freshVariablesSubstitutor.safeSubstitute(returnType)
+        return (getResultingSubstitutor() as? NewTypeSubstitutorByConstructorMap)
+            ?.safeSubstitute(substitutedReturnTypeWithVariables)
+            ?: substitutedReturnTypeWithVariables
     }
 
     private fun ResolutionCandidate.addExpectedTypeConstraint(
diff --git a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/candidate/ResolutionCandidate.kt b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/candidate/ResolutionCandidate.kt
index 6c3c1bb7f17..63d9b32b075 100644
--- a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/candidate/ResolutionCandidate.kt
+++ b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/components/candidate/ResolutionCandidate.kt
@@ -15,6 +15,7 @@ import org.jetbrains.kotlin.resolve.calls.inference.model.NewConstraintSystemImp
 import org.jetbrains.kotlin.resolve.calls.model.*
 import org.jetbrains.kotlin.resolve.calls.tower.*
 import org.jetbrains.kotlin.types.TypeSubstitutor
+import org.jetbrains.kotlin.types.model.TypeSubstitutorMarker
 import java.util.ArrayList
 
 sealed class ResolutionCandidate : Candidate, KotlinDiagnosticsHolder {
@@ -55,6 +56,8 @@ sealed class ResolutionCandidate : Candidate, KotlinDiagnosticsHolder {
     private var newSystem: NewConstraintSystemImpl? = null
     private var currentApplicability: CandidateApplicability = CandidateApplicability.RESOLVED
 
+    fun getResultingSubstitutor(): TypeSubstitutorMarker? = newSystem?.buildCurrentSubstitutor()
+
     abstract fun getSubResolvedAtoms(): List<ResolvedAtom>
     abstract fun addResolvedKtPrimitive(resolvedAtom: ResolvedAtom)
 
diff --git a/compiler/testData/diagnostics/tests/inference/builderInference/kt48031.kt b/compiler/testData/diagnostics/tests/inference/builderInference/kt48031.kt
new file mode 100644
index 00000000000..40f5106b2af
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/builderInference/kt48031.kt
@@ -0,0 +1,15 @@
+// FIR_IDENTICAL
+// WITH_STDLIB
+
+class Flow<out T>
+
+@OverloadResolutionByLambdaReturnType
+@OptIn(kotlin.experimental.ExperimentalTypeInference::class)
+fun <T> Flow<T>.debounce(timeoutMillis: (T) -> Long): Flow<T> = this
+
+@JvmName("debounceDuration")
+@OptIn(kotlin.experimental.ExperimentalTypeInference::class)
+@OverloadResolutionByLambdaReturnType
+fun <T> Flow<T>.debounce(timeout: (T) -> String): Flow<T> = this
+
+fun invalidFlow(x: Flow<Int>): Flow<Int> = x.debounce { value -> 0 }
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/inference/builderInference/kt48031.txt b/compiler/testData/diagnostics/tests/inference/builderInference/kt48031.txt
new file mode 100644
index 00000000000..3ffc76144c2
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/builderInference/kt48031.txt
@@ -0,0 +1,12 @@
+package
+
+public fun invalidFlow(/*0*/ x: Flow<kotlin.Int>): Flow<kotlin.Int>
+@kotlin.OverloadResolutionByLambdaReturnType @kotlin.OptIn(markerClass = {kotlin.experimental.ExperimentalTypeInference::class}) public fun </*0*/ T> Flow<T>.debounce(/*0*/ timeoutMillis: (T) -> kotlin.Long): Flow<T>
+@kotlin.jvm.JvmName(name = "debounceDuration") @kotlin.OptIn(markerClass = {kotlin.experimental.ExperimentalTypeInference::class}) @kotlin.OverloadResolutionByLambdaReturnType public fun </*0*/ T> Flow<T>.debounce(/*0*/ timeout: (T) -> kotlin.String): Flow<T>
+
+public final class Flow</*0*/ out T> {
+    public constructor Flow</*0*/ out T>()
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    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 6b5bdda878d..81add57ff9e 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
@@ -14339,6 +14339,12 @@ public class DiagnosticTestGenerated extends AbstractDiagnosticTest {
                     runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_4.kt");
                 }
 
+                @Test
+                @TestMetadata("kt48031.kt")
+                public void testKt48031() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt48031.kt");
+                }
+
                 @Test
                 @TestMetadata("kt49285.kt")
                 public void testKt49285() throws Exception {