diff --git a/compiler/fir/analysis-tests/tests/org/jetbrains/kotlin/fir/FirOldFrontendDiagnosticsTestWithStdlibGenerated.java b/compiler/fir/analysis-tests/tests/org/jetbrains/kotlin/fir/FirOldFrontendDiagnosticsTestWithStdlibGenerated.java
index 63ae5a9a417..c4e4ca48d69 100644
--- a/compiler/fir/analysis-tests/tests/org/jetbrains/kotlin/fir/FirOldFrontendDiagnosticsTestWithStdlibGenerated.java
+++ b/compiler/fir/analysis-tests/tests/org/jetbrains/kotlin/fir/FirOldFrontendDiagnosticsTestWithStdlibGenerated.java
@@ -1921,6 +1921,11 @@ public class FirOldFrontendDiagnosticsTestWithStdlibGenerated extends AbstractFi
             runTest("compiler/testData/diagnostics/testsWithStdLib/inference/kt37627.kt");
         }
 
+        @TestMetadata("kt38143.kt")
+        public void testKt38143() throws Exception {
+            runTest("compiler/testData/diagnostics/testsWithStdLib/inference/kt38143.kt");
+        }
+
         @TestMetadata("kt4975.kt")
         public void testKt4975() throws Exception {
             runTest("compiler/testData/diagnostics/testsWithStdLib/inference/kt4975.kt");
diff --git a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/inference/components/ConstraintInjector.kt b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/inference/components/ConstraintInjector.kt
index 18903fe4fa0..b8689a1b7a2 100644
--- a/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/inference/components/ConstraintInjector.kt
+++ b/compiler/resolution/src/org/jetbrains/kotlin/resolve/calls/inference/components/ConstraintInjector.kt
@@ -79,13 +79,14 @@ class ConstraintInjector(
             possibleNewConstraints!!.add(typeVar to constraint)
         }
         typeCheckerContext.runIsSubtypeOf(lowerType, upperType)
+        var constraintsFromIsSubtype = true
 
         while (possibleNewConstraints != null) {
 
             val constraintsToProcess = possibleNewConstraints
             possibleNewConstraints = null
             for ((typeVariable, constraint) in constraintsToProcess!!) {
-                if (c.shouldWeSkipConstraint(typeVariable, constraint)) continue
+                if (c.shouldWeSkipConstraint(typeVariable, constraint, constraintsFromIsSubtype)) continue
 
                 val constraints =
                     c.notFixedTypeVariables[typeVariable.freshTypeConstructor(c)] ?: typeCheckerContext.fixedTypeVariable(typeVariable)
@@ -108,6 +109,7 @@ class ConstraintInjector(
             ) {
                 break
             }
+            constraintsFromIsSubtype = false
         }
     }
 
@@ -115,11 +117,17 @@ class ConstraintInjector(
         c.maxTypeDepthFromInitialConstraints = max(c.maxTypeDepthFromInitialConstraints, initialType.typeDepth())
     }
 
-    private fun Context.shouldWeSkipConstraint(typeVariable: TypeVariableMarker, constraint: Constraint): Boolean {
+    private fun Context.shouldWeSkipConstraint(
+        typeVariable: TypeVariableMarker,
+        constraint: Constraint,
+        constraintsFromIsSubtype: Boolean
+    ): Boolean {
         assert(constraint.kind != ConstraintKind.EQUALITY)
 
         val constraintType = constraint.type
-        if (!isAllowedType(constraintType)) return true
+        // TODO: seems these coditions never met, at least in the tests, we need either to find a test for it or drop the check
+        if (!constraintsFromIsSubtype && !isAllowedType(constraintType))
+            return true
 
         if (constraintType.typeConstructor() == typeVariable.freshTypeConstructor()) {
             if (constraintType.lowerBoundIfFlexible().isMarkedNullable() && constraint.kind == LOWER) return false // T? <: T
diff --git a/compiler/testData/diagnostics/testsWithStdLib/inference/kt38143.kt b/compiler/testData/diagnostics/testsWithStdLib/inference/kt38143.kt
new file mode 100644
index 00000000000..81594d30c95
--- /dev/null
+++ b/compiler/testData/diagnostics/testsWithStdLib/inference/kt38143.kt
@@ -0,0 +1,37 @@
+// FIR_IDENTICAL
+// !LANGUAGE: +NewInference
+// !DIAGNOSTICS: -UNUSED_PARAMETER -UNUSED_VARIABLE
+
+// Generic interface, nothing interesting here
+interface UseCase<in I, out O> {
+    fun execute(input: I): O
+}
+
+// We don't want to call use cases without input with explicit Unit argument, so we create this handy extension
+fun <O> UseCase<Unit, O>.execute(): O = execute(Unit)
+
+class Foo : UseCase<Unit, List<List<List<String>>>> {
+    override fun execute(input: Unit) = listOf(listOf(listOf("foo")))
+}
+
+class Bar : UseCase<Unit, List<List<String>>> {
+    override fun execute(input: Unit) = listOf(listOf("bar"))
+}
+
+class Baz : UseCase<Unit, List<List<List<List<List<List<String>>>>>>> {
+    override fun execute(input: Unit) = listOf(listOf(listOf(listOf(listOf(listOf("foo"))))))
+}
+
+fun main() {
+    val foo = Foo()
+    foo.execute(Unit) // Member: OK both versions
+    foo.execute() // Extension: OI - OK, NI - was error: "Not enough information to infer type variable O"
+
+    val bar = Bar()
+    bar.execute(Unit) // Member: OK both versions
+    bar.execute() // Extension: OK both versions
+
+    val baz = Baz()
+    baz.execute(Unit)
+    baz.execute()
+}
diff --git a/compiler/testData/diagnostics/testsWithStdLib/inference/kt38143.txt b/compiler/testData/diagnostics/testsWithStdLib/inference/kt38143.txt
new file mode 100644
index 00000000000..5d407aac21a
--- /dev/null
+++ b/compiler/testData/diagnostics/testsWithStdLib/inference/kt38143.txt
@@ -0,0 +1,35 @@
+package
+
+public fun main(): kotlin.Unit
+public fun </*0*/ O> UseCase<kotlin.Unit, O>.execute(): O
+
+public final class Bar : UseCase<kotlin.Unit, kotlin.collections.List<kotlin.collections.List<kotlin.String>>> {
+    public constructor Bar()
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ fun execute(/*0*/ input: kotlin.Unit): kotlin.collections.List<kotlin.collections.List<kotlin.String>>
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public final class Baz : UseCase<kotlin.Unit, kotlin.collections.List<kotlin.collections.List<kotlin.collections.List<kotlin.collections.List<kotlin.collections.List<kotlin.collections.List<kotlin.String>>>>>>> {
+    public constructor Baz()
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ fun execute(/*0*/ input: kotlin.Unit): kotlin.collections.List<kotlin.collections.List<kotlin.collections.List<kotlin.collections.List<kotlin.collections.List<kotlin.collections.List<kotlin.String>>>>>>
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public final class Foo : UseCase<kotlin.Unit, kotlin.collections.List<kotlin.collections.List<kotlin.collections.List<kotlin.String>>>> {
+    public constructor Foo()
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*1*/ fun execute(/*0*/ input: kotlin.Unit): kotlin.collections.List<kotlin.collections.List<kotlin.collections.List<kotlin.String>>>
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public interface UseCase</*0*/ in I, /*1*/ out O> {
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public abstract fun execute(/*0*/ input: I): O
+    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/org/jetbrains/kotlin/checkers/DiagnosticsTestWithStdLibGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestWithStdLibGenerated.java
index 71e14fe7e30..11de66aa3f4 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestWithStdLibGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestWithStdLibGenerated.java
@@ -2931,6 +2931,11 @@ public class DiagnosticsTestWithStdLibGenerated extends AbstractDiagnosticsTestW
             runTest("compiler/testData/diagnostics/testsWithStdLib/inference/kt37627.kt");
         }
 
+        @TestMetadata("kt38143.kt")
+        public void testKt38143() throws Exception {
+            runTest("compiler/testData/diagnostics/testsWithStdLib/inference/kt38143.kt");
+        }
+
         @TestMetadata("kt4975.kt")
         public void testKt4975() throws Exception {
             runTest("compiler/testData/diagnostics/testsWithStdLib/inference/kt4975.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsTestWithStdLibUsingJavacGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsTestWithStdLibUsingJavacGenerated.java
index 9543f138b7d..5742ead30a2 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsTestWithStdLibUsingJavacGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsTestWithStdLibUsingJavacGenerated.java
@@ -2931,6 +2931,11 @@ public class DiagnosticsTestWithStdLibUsingJavacGenerated extends AbstractDiagno
             runTest("compiler/testData/diagnostics/testsWithStdLib/inference/kt37627.kt");
         }
 
+        @TestMetadata("kt38143.kt")
+        public void testKt38143() throws Exception {
+            runTest("compiler/testData/diagnostics/testsWithStdLib/inference/kt38143.kt");
+        }
+
         @TestMetadata("kt4975.kt")
         public void testKt4975() throws Exception {
             runTest("compiler/testData/diagnostics/testsWithStdLib/inference/kt4975.kt");