diff --git a/compiler/fir/fir2ir/tests-gen/org/jetbrains/kotlin/test/runners/codegen/FirBlackBoxCodegenTestGenerated.java b/compiler/fir/fir2ir/tests-gen/org/jetbrains/kotlin/test/runners/codegen/FirBlackBoxCodegenTestGenerated.java
index 056ad73d115..3788486941a 100644
--- a/compiler/fir/fir2ir/tests-gen/org/jetbrains/kotlin/test/runners/codegen/FirBlackBoxCodegenTestGenerated.java
+++ b/compiler/fir/fir2ir/tests-gen/org/jetbrains/kotlin/test/runners/codegen/FirBlackBoxCodegenTestGenerated.java
@@ -143,7 +143,7 @@ public class FirBlackBoxCodegenTestGenerated extends AbstractFirBlackBoxCodegenT
         }
 
         @Test
-        @TestMetadata("javaAnnotationArrayValueDefault.kt")
+        @TestMetadata("javaAnnotatestInferenceWithTypeVariableInsideCapturedType tionArrayValueDefault.kt")
         public void testJavaAnnotationArrayValueDefault() throws Exception {
             runTest("compiler/testData/codegen/box/annotations/javaAnnotationArrayValueDefault.kt");
         }
diff --git a/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/inference/components/ConstraintIncorporator.kt b/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/inference/components/ConstraintIncorporator.kt
index 06045c7b653..92ead9ac340 100644
--- a/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/inference/components/ConstraintIncorporator.kt
+++ b/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/inference/components/ConstraintIncorporator.kt
@@ -94,7 +94,7 @@ class ConstraintIncorporator(
         val freshTypeConstructor = typeVariable.freshTypeConstructor()
         for (typeVariableWithConstraint in this@insideOtherConstraint.allTypeVariablesWithConstraints) {
             val constraintsWhichConstraintMyVariable = typeVariableWithConstraint.constraints.filter {
-                it.type.contains { it.typeConstructor() == freshTypeConstructor }
+                containsTypeVariable(it.type, freshTypeConstructor)
             }
             constraintsWhichConstraintMyVariable.forEach {
                 generateNewConstraint(typeVariableWithConstraint.typeVariable, it, typeVariable, constraint)
@@ -130,7 +130,7 @@ class ConstraintIncorporator(
         otherConstraint: Constraint
     ) {
         val isBaseGenericType = baseConstraint.type.argumentsCount() != 0
-        val isOtherCapturedType = otherConstraint.type.isCapturedType()
+        val isBaseOrOtherCapturedType = baseConstraint.type.isCapturedType() || otherConstraint.type.isCapturedType()
         val (type, needApproximation) = when (otherConstraint.kind) {
             ConstraintKind.EQUALITY -> {
                 otherConstraint.type to false
@@ -145,9 +145,9 @@ class ConstraintIncorporator(
                  *      incorporatedConstraint = Approx(CapturedType(out Number)) <: TypeVariable(A) => Nothing <: TypeVariable(A)
                  * TODO: implement this for generics and captured types
                  */
-                if (baseConstraint.kind == ConstraintKind.LOWER && !isBaseGenericType && !isOtherCapturedType) {
+                if (baseConstraint.kind == ConstraintKind.LOWER && !isBaseGenericType && !isBaseOrOtherCapturedType) {
                     nothingType() to false
-                } else if (baseConstraint.kind == ConstraintKind.UPPER && !isBaseGenericType && !isOtherCapturedType) {
+                } else if (baseConstraint.kind == ConstraintKind.UPPER && !isBaseGenericType && !isBaseOrOtherCapturedType) {
                     otherConstraint.type to false
                 } else {
                     createCapturedType(
@@ -168,9 +168,9 @@ class ConstraintIncorporator(
                  *      incorporatedConstraint = TypeVariable(A) <: Approx(CapturedType(in Number)) => TypeVariable(A) <: Any?
                  * TODO: implement this for generics and captured types
                  */
-                if (baseConstraint.kind == ConstraintKind.UPPER && !isBaseGenericType && !isOtherCapturedType) {
+                if (baseConstraint.kind == ConstraintKind.UPPER && !isBaseGenericType && !isBaseOrOtherCapturedType) {
                     nullableAnyType() to false
-                } else if (baseConstraint.kind == ConstraintKind.LOWER && !isBaseGenericType && !isOtherCapturedType) {
+                } else if (baseConstraint.kind == ConstraintKind.LOWER && !isBaseGenericType && !isBaseOrOtherCapturedType) {
                     otherConstraint.type to false
                 } else {
                     createCapturedType(
diff --git a/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/inference/components/VariableFixationFinder.kt b/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/inference/components/VariableFixationFinder.kt
index 3583da575f2..a81b764a5a1 100644
--- a/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/inference/components/VariableFixationFinder.kt
+++ b/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/inference/components/VariableFixationFinder.kt
@@ -168,17 +168,33 @@ class VariableFixationFinder(
     }
 }
 
-inline fun TypeSystemInferenceExtensionContext.isProperTypeForFixation(
-    type: KotlinTypeMarker,
-    isProper: (KotlinTypeMarker) -> Boolean
-): Boolean {
-    if (!isProper(type)) return false
-    if (type.isCapturedType()) {
-        val projection = (type as? SimpleTypeMarker)?.asCapturedType()?.typeConstructorProjection() ?: return true
-        if (projection.isStarProjection()) return true
+inline fun TypeSystemInferenceExtensionContext.isProperTypeForFixation(type: KotlinTypeMarker, isProper: (KotlinTypeMarker) -> Boolean) =
+    isProper(type) && extractProjectionsForAllCapturedTypes(type).all(isProper)
 
-        if (!isProper(projection.getType())) return false
+@OptIn(ExperimentalStdlibApi::class)
+fun TypeSystemInferenceExtensionContext.extractProjectionsForAllCapturedTypes(baseType: KotlinTypeMarker): Set<KotlinTypeMarker> {
+    val simpleBaseType = baseType.asSimpleType()
+
+    return buildSet {
+        val projectionType = if (simpleBaseType is CapturedTypeMarker) {
+            val typeArgument = simpleBaseType.typeConstructorProjection().takeIf { !it.isStarProjection() } ?: return@buildSet
+            typeArgument.getType().also(::add)
+        } else baseType
+        val argumentsCount = projectionType.argumentsCount().takeIf { it != 0 } ?: return@buildSet
+
+        for (i in 0 until argumentsCount) {
+            val typeArgument = projectionType.getArgument(i).takeIf { !it.isStarProjection() } ?: continue
+            addAll(extractProjectionsForAllCapturedTypes(typeArgument.getType()))
+        }
+    }
+}
+
+fun TypeSystemInferenceExtensionContext.containsTypeVariable(type: KotlinTypeMarker, typeVariable: TypeConstructorMarker): Boolean {
+    if (type.contains { it.typeConstructor() == typeVariable }) return true
+
+    val typeProjections = extractProjectionsForAllCapturedTypes(type)
+
+    return typeProjections.any { typeProjectionsType ->
+        typeProjectionsType.contains { it.typeConstructor() == typeVariable }
     }
-
-    return true
 }
diff --git a/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/inference/model/NewConstraintSystemImpl.kt b/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/inference/model/NewConstraintSystemImpl.kt
index a8b6598eeaa..ba05158e1ff 100644
--- a/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/inference/model/NewConstraintSystemImpl.kt
+++ b/compiler/resolution.common/src/org/jetbrains/kotlin/resolve/calls/inference/model/NewConstraintSystemImpl.kt
@@ -336,9 +336,7 @@ class NewConstraintSystemImpl(
         val variableWithConstraints = notFixedTypeVariables.remove(freshTypeConstructor)
 
         for (otherVariableWithConstraints in notFixedTypeVariables.values) {
-            otherVariableWithConstraints.removeConstrains { otherConstraint ->
-                otherConstraint.type.contains { it.typeConstructor() == freshTypeConstructor }
-            }
+            otherVariableWithConstraints.removeConstrains { containsTypeVariable(it.type, freshTypeConstructor) }
         }
 
         storage.fixedTypeVariables[freshTypeConstructor] = resultType