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 012838bf62a..26fecc4b0cb 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
@@ -14219,6 +14219,30 @@ public class DiagnosisCompilerTestFE10TestdataTestGenerated extends AbstractDiag
                     runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47744.kt");
                 }
 
+                @Test
+                @TestMetadata("kt47986.kt")
+                public void testKt47986() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986.kt");
+                }
+
+                @Test
+                @TestMetadata("kt47986_2.kt")
+                public void testKt47986_2() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_2.kt");
+                }
+
+                @Test
+                @TestMetadata("kt47986_3.kt")
+                public void testKt47986_3() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_3.kt");
+                }
+
+                @Test
+                @TestMetadata("kt47986_4.kt")
+                public void testKt47986_4() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_4.kt");
+                }
+
                 @Test
                 @TestMetadata("kt49285.kt")
                 public void testKt49285() throws Exception {
@@ -14255,6 +14279,12 @@ public class DiagnosisCompilerTestFE10TestdataTestGenerated extends AbstractDiag
                     runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt51148.kt");
                 }
 
+                @Test
+                @TestMetadata("kt51464.kt")
+                public void testKt51464() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt51464.kt");
+                }
+
                 @Test
                 @TestMetadata("labaledCall.kt")
                 public void testLabaledCall() 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 7d742f23647..2de5921e43a 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
@@ -14219,6 +14219,30 @@ public class FirOldFrontendDiagnosticsTestGenerated extends AbstractFirDiagnosti
                     runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47744.kt");
                 }
 
+                @Test
+                @TestMetadata("kt47986.kt")
+                public void testKt47986() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986.kt");
+                }
+
+                @Test
+                @TestMetadata("kt47986_2.kt")
+                public void testKt47986_2() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_2.kt");
+                }
+
+                @Test
+                @TestMetadata("kt47986_3.kt")
+                public void testKt47986_3() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_3.kt");
+                }
+
+                @Test
+                @TestMetadata("kt47986_4.kt")
+                public void testKt47986_4() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_4.kt");
+                }
+
                 @Test
                 @TestMetadata("kt49285.kt")
                 public void testKt49285() throws Exception {
@@ -14255,6 +14279,12 @@ public class FirOldFrontendDiagnosticsTestGenerated extends AbstractFirDiagnosti
                     runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt51148.kt");
                 }
 
+                @Test
+                @TestMetadata("kt51464.kt")
+                public void testKt51464() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt51464.kt");
+                }
+
                 @Test
                 @TestMetadata("labaledCall.kt")
                 public void testLabaledCall() 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 4578948dc2f..417263fc525 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
@@ -14219,6 +14219,30 @@ public class FirOldFrontendDiagnosticsWithLightTreeTestGenerated extends Abstrac
                     runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47744.kt");
                 }
 
+                @Test
+                @TestMetadata("kt47986.kt")
+                public void testKt47986() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986.kt");
+                }
+
+                @Test
+                @TestMetadata("kt47986_2.kt")
+                public void testKt47986_2() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_2.kt");
+                }
+
+                @Test
+                @TestMetadata("kt47986_3.kt")
+                public void testKt47986_3() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_3.kt");
+                }
+
+                @Test
+                @TestMetadata("kt47986_4.kt")
+                public void testKt47986_4() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_4.kt");
+                }
+
                 @Test
                 @TestMetadata("kt49285.kt")
                 public void testKt49285() throws Exception {
@@ -14255,6 +14279,12 @@ public class FirOldFrontendDiagnosticsWithLightTreeTestGenerated extends Abstrac
                     runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt51148.kt");
                 }
 
+                @Test
+                @TestMetadata("kt51464.kt")
+                public void testKt51464() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt51464.kt");
+                }
+
                 @Test
                 @TestMetadata("labaledCall.kt")
                 public void testLabaledCall() throws Exception {
diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/inference/BuilderInferenceSession.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/inference/BuilderInferenceSession.kt
index de0f2332942..fc285ce22ea 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/inference/BuilderInferenceSession.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/inference/BuilderInferenceSession.kt
@@ -589,11 +589,17 @@ class BuilderInferenceSession(
 
         if (lowerSubstituted == a && upperSubstituted == b) return this
 
+        val resultingPosition = if (upperSubstituted == b && position is DeclaredUpperBoundConstraintPosition<*>) {
+            position
+        } else {
+            BuilderInferenceSubstitutionConstraintPositionImpl(lambdaArgument, this)
+        }
+
         return InitialConstraint(
             lowerSubstituted,
             upperSubstituted,
             constraintKind,
-            BuilderInferenceSubstitutionConstraintPositionImpl(lambdaArgument, this)
+            resultingPosition
         )
     }
 
diff --git a/compiler/testData/diagnostics/tests/inference/builderInference/kt47986.kt b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986.kt
new file mode 100644
index 00000000000..5544b6bfa77
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986.kt
@@ -0,0 +1,12 @@
+// FIR_IDENTICAL
+class Foo<K>
+
+fun <K> buildFoo(builderAction: Foo<K>.() -> Unit): Foo<K> = Foo()
+
+fun <K> Foo<K>.bar(x: Int = 1) {}
+
+fun main() {
+    val x = <!NEW_INFERENCE_NO_INFORMATION_FOR_PARAMETER!>buildFoo<!> {
+        bar()
+    }
+}
diff --git a/compiler/testData/diagnostics/tests/inference/builderInference/kt47986.txt b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986.txt
new file mode 100644
index 00000000000..e524080b34f
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986.txt
@@ -0,0 +1,12 @@
+package
+
+public fun </*0*/ K> buildFoo(/*0*/ builderAction: Foo<K>.() -> kotlin.Unit): Foo<K>
+public fun main(): kotlin.Unit
+public fun </*0*/ K> Foo<K>.bar(/*0*/ x: kotlin.Int = ...): kotlin.Unit
+
+public final class Foo</*0*/ K> {
+    public constructor Foo</*0*/ K>()
+    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/testData/diagnostics/tests/inference/builderInference/kt47986_2.kt b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_2.kt
new file mode 100644
index 00000000000..a8a7f7f46d1
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_2.kt
@@ -0,0 +1,14 @@
+// FIR_IDENTICAL
+class Foo<K>
+
+fun <K> buildFoo(builderAction: Foo<K>.() -> Unit): Foo<K> = Foo()
+
+fun <L> Foo<L>.bar() {}
+
+fun <K> id(x: K) = x
+
+fun main() {
+    val x = <!NEW_INFERENCE_NO_INFORMATION_FOR_PARAMETER!>buildFoo<!> { // can't infer
+        val y = id(::bar)
+    }
+}
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_2.txt b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_2.txt
new file mode 100644
index 00000000000..9a3f241b665
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_2.txt
@@ -0,0 +1,13 @@
+package
+
+public fun </*0*/ K> buildFoo(/*0*/ builderAction: Foo<K>.() -> kotlin.Unit): Foo<K>
+public fun </*0*/ K> id(/*0*/ x: K): K
+public fun main(): kotlin.Unit
+public fun </*0*/ L> Foo<L>.bar(): kotlin.Unit
+
+public final class Foo</*0*/ K> {
+    public constructor Foo</*0*/ K>()
+    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/testData/diagnostics/tests/inference/builderInference/kt47986_3.kt b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_3.kt
new file mode 100644
index 00000000000..e096bb11f3e
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_3.kt
@@ -0,0 +1,12 @@
+// FIR_IDENTICAL
+class Foo<K>
+
+fun <K> buildFoo(builderAction: Foo<K>.() -> Unit): Foo<K> = Foo()
+
+fun <K: N, N> Foo<K>.bar(x: Int = 1) {}
+
+fun main() {
+    val x = <!NEW_INFERENCE_NO_INFORMATION_FOR_PARAMETER!>buildFoo<!> {
+        bar()
+    }
+}
diff --git a/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_3.txt b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_3.txt
new file mode 100644
index 00000000000..298988be6b1
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_3.txt
@@ -0,0 +1,12 @@
+package
+
+public fun </*0*/ K> buildFoo(/*0*/ builderAction: Foo<K>.() -> kotlin.Unit): Foo<K>
+public fun main(): kotlin.Unit
+public fun </*0*/ K : N, /*1*/ N> Foo<K>.bar(/*0*/ x: kotlin.Int = ...): kotlin.Unit
+
+public final class Foo</*0*/ K> {
+    public constructor Foo</*0*/ K>()
+    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/testData/diagnostics/tests/inference/builderInference/kt47986_4.kt b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_4.kt
new file mode 100644
index 00000000000..9c56154d65a
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_4.kt
@@ -0,0 +1,14 @@
+// FIR_IDENTICAL
+class Foo<K>
+
+fun <K> buildFoo(builderAction: Foo<K>.() -> Unit): Foo<K> = Foo()
+
+class Bar<K>
+
+fun <K: Bar<N>, N: Bar<K>> Foo<K>.bar(x: Int = 1) {}
+
+fun main() {
+    val x = <!NEW_INFERENCE_NO_INFORMATION_FOR_PARAMETER!>buildFoo<!> {
+        bar()
+    }
+}
diff --git a/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_4.txt b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_4.txt
new file mode 100644
index 00000000000..23f736d903b
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/builderInference/kt47986_4.txt
@@ -0,0 +1,19 @@
+package
+
+public fun </*0*/ K> buildFoo(/*0*/ builderAction: Foo<K>.() -> kotlin.Unit): Foo<K>
+public fun main(): kotlin.Unit
+public fun </*0*/ K : Bar<N>, /*1*/ N : Bar<K>> Foo<K>.bar(/*0*/ x: kotlin.Int = ...): kotlin.Unit
+
+public final class Bar</*0*/ K> {
+    public constructor Bar</*0*/ K>()
+    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 final class Foo</*0*/ K> {
+    public constructor Foo</*0*/ K>()
+    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/testData/diagnostics/tests/inference/builderInference/kt51464.fir.kt b/compiler/testData/diagnostics/tests/inference/builderInference/kt51464.fir.kt
new file mode 100644
index 00000000000..47d5840a1e8
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/builderInference/kt51464.fir.kt
@@ -0,0 +1,14 @@
+import kotlinx.coroutines.flow.transform
+
+fun <T> flowOf(value: T): Flow<T> = TODO()
+
+interface FlowCollector<in T> {}
+
+interface Flow<out T>
+
+fun <T, R> Flow<T>.transform(transform: FlowCollector<R>.(T) -> Unit): Flow<R> = TODO()
+
+fun f() {
+    fun <T> doEmit(collector: FlowCollector<T>) {}
+    flowOf(1).<!NEW_INFERENCE_NO_INFORMATION_FOR_PARAMETER!>transform<!> { doEmit(this) }
+}
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/inference/builderInference/kt51464.kt b/compiler/testData/diagnostics/tests/inference/builderInference/kt51464.kt
new file mode 100644
index 00000000000..50ede69999f
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/builderInference/kt51464.kt
@@ -0,0 +1,12 @@
+fun <T> flowOf(value: T): Flow<T> = TODO()
+
+interface FlowCollector<in T> {}
+
+interface Flow<out T>
+
+fun <T, R> Flow<T>.transform(transform: FlowCollector<R>.(T) -> Unit): Flow<R> = TODO()
+
+fun f() {
+    fun <T> doEmit(collector: FlowCollector<T>) {}
+    flowOf(1).<!NEW_INFERENCE_NO_INFORMATION_FOR_PARAMETER!>transform<!> { doEmit(this) }
+}
\ No newline at end of file
diff --git a/compiler/testData/diagnostics/tests/inference/builderInference/kt51464.txt b/compiler/testData/diagnostics/tests/inference/builderInference/kt51464.txt
new file mode 100644
index 00000000000..bacf81a98bc
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/inference/builderInference/kt51464.txt
@@ -0,0 +1,17 @@
+package
+
+public fun f(): kotlin.Unit
+public fun </*0*/ T> flowOf(/*0*/ value: T): Flow<T>
+public fun </*0*/ T, /*1*/ R> Flow<T>.transform(/*0*/ transform: FlowCollector<R>.(T) -> kotlin.Unit): Flow<R>
+
+public interface 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
+}
+
+public interface FlowCollector</*0*/ in 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 3284e1f69d5..9338cdc879e 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
@@ -14225,6 +14225,30 @@ public class DiagnosticTestGenerated extends AbstractDiagnosticTest {
                     runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47744.kt");
                 }
 
+                @Test
+                @TestMetadata("kt47986.kt")
+                public void testKt47986() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986.kt");
+                }
+
+                @Test
+                @TestMetadata("kt47986_2.kt")
+                public void testKt47986_2() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_2.kt");
+                }
+
+                @Test
+                @TestMetadata("kt47986_3.kt")
+                public void testKt47986_3() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_3.kt");
+                }
+
+                @Test
+                @TestMetadata("kt47986_4.kt")
+                public void testKt47986_4() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt47986_4.kt");
+                }
+
                 @Test
                 @TestMetadata("kt49285.kt")
                 public void testKt49285() throws Exception {
@@ -14261,6 +14285,12 @@ public class DiagnosticTestGenerated extends AbstractDiagnosticTest {
                     runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt51148.kt");
                 }
 
+                @Test
+                @TestMetadata("kt51464.kt")
+                public void testKt51464() throws Exception {
+                    runTest("compiler/testData/diagnostics/tests/inference/builderInference/kt51464.kt");
+                }
+
                 @Test
                 @TestMetadata("labaledCall.kt")
                 public void testLabaledCall() throws Exception {