diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/BodyResolver.java b/compiler/frontend/src/org/jetbrains/kotlin/resolve/BodyResolver.java
index c641bdb1636..c7fca35ba93 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/BodyResolver.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/BodyResolver.java
@@ -56,6 +56,7 @@ import org.jetbrains.kotlin.util.ReenteringLazyValueComputationException;
 
 import java.util.*;
 
+import static org.jetbrains.kotlin.config.LanguageFeature.FreedomForSealedClasses;
 import static org.jetbrains.kotlin.config.LanguageFeature.TopLevelSealedInheritance;
 import static org.jetbrains.kotlin.diagnostics.Errors.*;
 import static org.jetbrains.kotlin.resolve.BindingContext.*;
@@ -635,7 +636,12 @@ public class BodyResolver {
                         containingDescriptor = containingDescriptor.getContainingDeclaration();
                     }
                     if (containingDescriptor == null) {
-                        trace.report(SEALED_SUPERTYPE.on(typeReference));
+                        if (
+                            !languageVersionSettings.supportsFeature(FreedomForSealedClasses) ||
+                            DescriptorUtils.isLocal(supertypeOwner)
+                        ) {
+                            trace.report(SEALED_SUPERTYPE.on(typeReference));
+                        }
                     }
                     else {
                         trace.report(SEALED_SUPERTYPE_IN_LOCAL_CLASS.on(typeReference));
diff --git a/compiler/testData/diagnostics/tests/sealed/MultipleFiles_enabled.fir.kt b/compiler/testData/diagnostics/tests/sealed/MultipleFiles_enabled.fir.kt
index 062325d1383..a490bda54c5 100644
--- a/compiler/testData/diagnostics/tests/sealed/MultipleFiles_enabled.fir.kt
+++ b/compiler/testData/diagnostics/tests/sealed/MultipleFiles_enabled.fir.kt
@@ -18,6 +18,12 @@ class Container {
     class C : <!HIDDEN, SEALED_SUPERTYPE!>Base<!>()
 
     inner class D : <!HIDDEN, SEALED_SUPERTYPE!>Base<!>()
+
+    val anon = object : <!HIDDEN, SEALED_SUPERTYPE_IN_LOCAL_CLASS!>Base<!>() {} // Should be an error
+
+    fun someFun() {
+        class LocalClass : <!HIDDEN, SEALED_SUPERTYPE_IN_LOCAL_CLASS!>Base<!>() {} // Should be an error
+    }
 }
 
 // FILE: d.kt
@@ -26,5 +32,7 @@ fun test(base: Base) {
     val x = when (base) {
         is Base.A -> 1
         is B -> 2
+        is Container.C -> 3
+        is Container.D -> 4
     }
 }
diff --git a/compiler/testData/diagnostics/tests/sealed/MultipleFiles_enabled.kt b/compiler/testData/diagnostics/tests/sealed/MultipleFiles_enabled.kt
index 76ee023fea1..267ac83315a 100644
--- a/compiler/testData/diagnostics/tests/sealed/MultipleFiles_enabled.kt
+++ b/compiler/testData/diagnostics/tests/sealed/MultipleFiles_enabled.kt
@@ -15,9 +15,15 @@ class B : Base()
 // FILE: c.kt
 
 class Container {
-    class C : <!SEALED_SUPERTYPE!>Base<!>()
+    class C : Base()
 
-    inner class D : <!SEALED_SUPERTYPE!>Base<!>()
+    inner class D : Base()
+
+    val anon = object : <!SEALED_SUPERTYPE!>Base<!>() {} // Should be an error
+
+    fun someFun() {
+        class LocalClass : <!SEALED_SUPERTYPE!>Base<!>() {} // Should be an error
+    }
 }
 
 // FILE: d.kt
@@ -26,5 +32,7 @@ fun test(base: Base) {
     val x = when (base) {
         is Base.A -> 1
         is B -> 2
+        is Container.C -> 3
+        is Container.D -> 4
     }
 }
diff --git a/compiler/testData/diagnostics/tests/sealed/MultipleFiles_enabled.txt b/compiler/testData/diagnostics/tests/sealed/MultipleFiles_enabled.txt
index c03f125ae7a..0a71f3f94b6 100644
--- a/compiler/testData/diagnostics/tests/sealed/MultipleFiles_enabled.txt
+++ b/compiler/testData/diagnostics/tests/sealed/MultipleFiles_enabled.txt
@@ -25,8 +25,10 @@ public sealed class Base {
 
 public final class Container {
     public constructor Container()
+    public final val anon: Base
     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 final fun someFun(): kotlin.Unit
     public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
 
     public final class C : Base {