Type<*> is inferred now if Type<A> and Type<B> common supertype is Type<X> and X is not within parameter upper bound. #KT-7585 Fixed. #EA-68943 Fixed.

It provides also a fix for KT-7585 (empty type intersection assertion).
A set of relevant tests, one fixed test

compiler/testData/diagnostics/testsWithStdLib/kt7585/delegate.kt

@@ -0,0 +1,73 @@
+// FILE: Base.java
+
+interface Base {}
+
+// FILE: Other.java
+
+interface Other {}
+
+// FILE: Derived.java
+
+final class Derived<T> implements Base, Other {}
+
+// FILE: Exotic.java
+
+final class Exotic implements Base, Other {
+
+    int x;
+
+    Exotic(int x) {
+        this.x = x;
+    }
+}
+
+// FILE: Properties.java
+
+import kotlin.jvm.functions.Function0;
+
+class Val<T> {
+
+    Function0<T> initializer;
+
+    Val(Function0<T> initializer) {
+        this.initializer = initializer;
+    }
+
+    T get(Object instance, Object metadata) {
+        return initializer.invoke();
+    }
+}
+
+class Properties {
+    static <T> Val<T> calcVal(Function0<T> initializer) {
+        return new Val<T>(initializer);
+    }
+}
+
+// FILE: My.kt
+
+open class Wrapper<out T: Base>(val v: T)
+
+class DerivedWrapper(v: Derived<*>): Wrapper<Derived<*>>(v)
+
+class ExoticWrapper(v: Exotic): Wrapper<Exotic>(v)
+
+object MyBase {
+
+    fun derived() = Derived<String>()
+    fun exotic(x: Int) = Exotic(x)
+
+    fun derivedWrapper() = DerivedWrapper(derived())
+    fun exoticWrapper(x: Int) = ExoticWrapper(exotic(x))
+}
+
+class My(val x: Int) {
+    val wrapper/*: Wrapper<*>*/ by Properties.calcVal {
+        val y = x + 1
+        when {
+            y > 0 -> MyBase.derivedWrapper()
+            x < 0 -> MyBase.exoticWrapper(x)
+            else  -> throw java.lang.NullPointerException("")
+        }
+    }
+}

compiler/testData/diagnostics/testsWithStdLib/kt7585/delegate.txt

@@ -0,0 +1,82 @@
+package
+
+public/*package*/ interface 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 open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public/*package*/ final class Derived</*0*/ T : kotlin.Any!> : Base, Other {
+    public/*package*/ constructor Derived</*0*/ T : kotlin.Any!>()
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+internal final class DerivedWrapper : Wrapper<Derived<*>> {
+    public constructor DerivedWrapper(/*0*/ v: Derived<*>)
+    internal final override /*1*/ /*fake_override*/ val v: Derived<*>
+    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
+}
+
+public/*package*/ final class Exotic : Base, Other {
+    public/*package*/ constructor Exotic(/*0*/ x: kotlin.Int)
+    public/*package*/ final var x: kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    public open override /*2*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*2*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+internal final class ExoticWrapper : Wrapper<Exotic> {
+    public constructor ExoticWrapper(/*0*/ v: Exotic)
+    internal final override /*1*/ /*fake_override*/ val v: Exotic
+    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
+}
+
+internal final class My {
+    public constructor My(/*0*/ x: kotlin.Int)
+    internal final val wrapper: Wrapper<*>!
+    internal final val x: kotlin.Int
+    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
+}
+
+internal object MyBase {
+    private constructor MyBase()
+    internal final fun derived(): Derived<kotlin.String>
+    internal final fun derivedWrapper(): DerivedWrapper
+    public open override /*1*/ /*fake_override*/ fun equals(/*0*/ other: kotlin.Any?): kotlin.Boolean
+    internal final fun exotic(/*0*/ x: kotlin.Int): Exotic
+    internal final fun exoticWrapper(/*0*/ x: kotlin.Int): ExoticWrapper
+    public open override /*1*/ /*fake_override*/ fun hashCode(): kotlin.Int
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public/*package*/ interface Other {
+    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
+}
+
+public/*package*/ open class Properties {
+    public/*package*/ constructor Properties()
+    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
+
+    // Static members
+    public/*package*/ open fun </*0*/ T : kotlin.Any!> calcVal(/*0*/ initializer: (() -> T!)!): Val<T!>!
+}
+
+internal open class Wrapper</*0*/ out T : Base> {
+    public constructor Wrapper</*0*/ out T : Base>(/*0*/ v: T)
+    internal final val v: 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
+}