diff --git a/analysis/low-level-api-fir/testData/contextCollector/typeParameters/declaredInClass_fromNested_typeBound.kt b/analysis/low-level-api-fir/testData/contextCollector/typeParameters/declaredInClass_fromNested_typeBound.kt
index fe045ddd678..e29c71dc7f5 100644
--- a/analysis/low-level-api-fir/testData/contextCollector/typeParameters/declaredInClass_fromNested_typeBound.kt
+++ b/analysis/low-level-api-fir/testData/contextCollector/typeParameters/declaredInClass_fromNested_typeBound.kt
@@ -1,6 +1,5 @@
 package test
 
 class Outer<MyParam> {
-    // TODO this test has an error, MyParam should not be resolved here. See KT-61959
     class Nested<T : <expr>MyParam</expr>>
 }
\ No newline at end of file
diff --git a/analysis/low-level-api-fir/testData/contextCollector/typeParameters/declaredInClass_fromNested_typeBound.txt b/analysis/low-level-api-fir/testData/contextCollector/typeParameters/declaredInClass_fromNested_typeBound.txt
index 58008e513ef..69fc2ccc2f9 100644
--- a/analysis/low-level-api-fir/testData/contextCollector/typeParameters/declaredInClass_fromNested_typeBound.txt
+++ b/analysis/low-level-api-fir/testData/contextCollector/typeParameters/declaredInClass_fromNested_typeBound.txt
@@ -20,7 +20,7 @@ Tower Data Context:
     Element 8
         Scope: FirNestedClassifierScopeImpl
             Classifiers:
-                FirRegularClassSymbol public final class Nested<T : R|MyParam|> : R|kotlin/Any|
+                FirRegularClassSymbol public final class Nested<T : <ERROR TYPE REF: Symbol not found for MyParam>> : R|kotlin/Any|
     Element 9
         Implicit receiver:
             FirRegularClassSymbol public final class Outer<MyParam> : R|kotlin/Any|
@@ -28,7 +28,7 @@ Tower Data Context:
     Element 10
         Scope: FirMemberTypeParameterScope
             Classifiers:
-                FirTypeParameterSymbol T : R|MyParam|
+                FirTypeParameterSymbol T : <ERROR TYPE REF: Symbol not found for MyParam>
 
 FILE: [ResolvedTo(IMPORTS)] declaredInClass_fromNested_typeBound.kt
     public final [ResolvedTo(STATUS)] class Outer<[ResolvedTo(STATUS)] MyParam> : R|kotlin/Any| {
@@ -36,8 +36,8 @@ FILE: [ResolvedTo(IMPORTS)] declaredInClass_fromNested_typeBound.kt
             super<R|kotlin/Any|>()
         }
 
-        public final [ResolvedTo(STATUS)] class Nested<[ResolvedTo(STATUS)] T : R|MyParam|> : R|kotlin/Any| {
-            public [ResolvedTo(BODY_RESOLVE)] constructor<[ResolvedTo(STATUS)] T : R|MyParam|>(): R|test/Outer.Nested<T>| {
+        public final [ResolvedTo(STATUS)] class Nested<[ResolvedTo(STATUS)] T : <ERROR TYPE REF: Symbol not found for MyParam>> : R|kotlin/Any| {
+            public [ResolvedTo(BODY_RESOLVE)] constructor<[ResolvedTo(STATUS)] T : <ERROR TYPE REF: Symbol not found for MyParam>>(): R|test/Outer.Nested<T>| {
                 super<R|kotlin/Any|>()
             }
 
diff --git a/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/transformers/FirTypeResolveTransformer.kt b/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/transformers/FirTypeResolveTransformer.kt
index 2bc49027919..ef605afe2bf 100644
--- a/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/transformers/FirTypeResolveTransformer.kt
+++ b/compiler/fir/resolve/src/org/jetbrains/kotlin/fir/resolve/transformers/FirTypeResolveTransformer.kt
@@ -125,6 +125,10 @@ open class FirTypeResolveTransformer(
 
     fun transformClassTypeParameters(regularClass: FirRegularClass, data: Any?) {
         withScopeCleanup {
+            // Remove type parameter scopes for classes that are neither inner nor local
+            if (removeOuterTypeParameterScope(regularClass)) {
+                this.scopes = staticScopes
+            }
             addTypeParametersScope(regularClass)
             regularClass.typeParameters.forEach {
                 it.accept(this, data)
diff --git a/compiler/testData/diagnostics/tests/inference/recursiveTypes/nestedClassesWithSelfTypes.fir.kt b/compiler/testData/diagnostics/tests/inference/recursiveTypes/nestedClassesWithSelfTypes.fir.kt
deleted file mode 100644
index d0194354cfe..00000000000
--- a/compiler/testData/diagnostics/tests/inference/recursiveTypes/nestedClassesWithSelfTypes.fir.kt
+++ /dev/null
@@ -1,22 +0,0 @@
-// ISSUE: KT-61459
-
-interface Alarm {
-    interface Builder<Self : Builder<Self>> {
-        fun build(): Alarm
-    }
-}
-
-abstract class AbstractAlarm<Self : AbstractAlarm<Self, Builder>, Builder : AbstractAlarm.Builder<Builder, Self>>(
-    val identifier: String,
-) : Alarm {
-    abstract class Builder<Self : Builder<!TYPE_ARGUMENTS_NOT_ALLOWED!><Self, Built><!>, Built : AbstractAlarm<Built, <!UPPER_BOUND_VIOLATED!>Self<!>>> : Alarm.Builder<<!UPPER_BOUND_VIOLATED!>Self<!>> {
-        private var identifier: String = ""
-
-        fun setIdentifier(text: String): Self {
-            this.identifier = text
-            return this <!UNCHECKED_CAST!>as Self<!>
-        }
-
-        final override fun build(): Built = TODO()
-    }
-}
diff --git a/compiler/testData/diagnostics/tests/inference/recursiveTypes/nestedClassesWithSelfTypes.kt b/compiler/testData/diagnostics/tests/inference/recursiveTypes/nestedClassesWithSelfTypes.kt
index 57caabf91ae..e976034bf16 100644
--- a/compiler/testData/diagnostics/tests/inference/recursiveTypes/nestedClassesWithSelfTypes.kt
+++ b/compiler/testData/diagnostics/tests/inference/recursiveTypes/nestedClassesWithSelfTypes.kt
@@ -1,3 +1,4 @@
+// FIR_IDENTICAL
 // ISSUE: KT-61459
 
 interface Alarm {
diff --git a/compiler/testData/diagnostics/tests/typeParameters/outerTypeParameterAsBound.fir.kt b/compiler/testData/diagnostics/tests/typeParameters/outerTypeParameterAsBound.fir.kt
deleted file mode 100644
index 323ffac9e4d..00000000000
--- a/compiler/testData/diagnostics/tests/typeParameters/outerTypeParameterAsBound.fir.kt
+++ /dev/null
@@ -1,13 +0,0 @@
-// ISSUE: KT-61959
-
-package test
-
-interface OuterParam
-
-class Outer<OuterParam> {
-    class Nested<NestedParam : OuterParam>
-}
-
-fun main() {
-    Outer.Nested<<!UPPER_BOUND_VIOLATED!>OuterParam<!>>()
-}
diff --git a/compiler/testData/diagnostics/tests/typeParameters/outerTypeParameterAsBound.kt b/compiler/testData/diagnostics/tests/typeParameters/outerTypeParameterAsBound.kt
index fe0900afad9..58a871f76b3 100644
--- a/compiler/testData/diagnostics/tests/typeParameters/outerTypeParameterAsBound.kt
+++ b/compiler/testData/diagnostics/tests/typeParameters/outerTypeParameterAsBound.kt
@@ -1,3 +1,4 @@
+// FIR_IDENTICAL
 // ISSUE: KT-61959
 
 package test