Captured type might be substituted in an opposite projection

out Captured (in Int) = out Int
 in Captured (out Int) = in Int

compiler/testData/diagnostics/tests/inference/capturedTypes/capturedTypeSubstitutedIntoOppositeProjection.kt

@@ -0,0 +1,14 @@
+// !DIAGNOSTICS: -UNUSED_PARAMETER
+// !CHECK_TYPE
+
+fun <T> foo1(a1: Array<in T>, a2: Array<T>): T = null!!
+
+fun test1(a1: Array<Int>, a2: Array<out Int>) {
+    foo1(a1, a2) checkType { it : _<Int> }
+}
+
+fun <T> foo2(a1: Array<T>, a2: Array<out T>): T = null!!
+
+fun test2(a1: Array<in Int>, a2: Array<Int>) {
+    foo2(a1, a2) checkType { it : _<Any?>}
+}

compiler/testData/diagnostics/tests/inference/capturedTypes/capturedTypeSubstitutedIntoOppositeProjection.txt

@@ -0,0 +1,6 @@
+package
+
+internal fun </*0*/ T> foo1(/*0*/ a1: kotlin.Array<in T>, /*1*/ a2: kotlin.Array<T>): T
+internal fun </*0*/ T> foo2(/*0*/ a1: kotlin.Array<T>, /*1*/ a2: kotlin.Array<out T>): T
+internal fun test1(/*0*/ a1: kotlin.Array<kotlin.Int>, /*1*/ a2: kotlin.Array<out kotlin.Int>): kotlin.Unit
+internal fun test2(/*0*/ a1: kotlin.Array<in kotlin.Int>, /*1*/ a2: kotlin.Array<kotlin.Int>): kotlin.Unit

compiler/tests/org/jetbrains/jet/checkers/JetDiagnosticsTestGenerated.java

@@ -5136,6 +5136,12 @@ public class JetDiagnosticsTestGenerated extends AbstractJetDiagnosticsTest {
                     doTest(fileName);
                 }
 
+                @TestMetadata("capturedTypeSubstitutedIntoOppositeProjection.kt")
+                public void testCapturedTypeSubstitutedIntoOppositeProjection() throws Exception {
+                    String fileName = JetTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/inference/capturedTypes/capturedTypeSubstitutedIntoOppositeProjection.kt");
+                    doTest(fileName);
+                }
+
                 @TestMetadata("kt2570.kt")
                 public void testKt2570() throws Exception {
                     String fileName = JetTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/inference/capturedTypes/kt2570.kt");

core/descriptors/src/org/jetbrains/jet/lang/types/TypeSubstitutor.java

@@ -19,6 +19,7 @@ package org.jetbrains.jet.lang.types;
 import org.jetbrains.annotations.NotNull;
 import org.jetbrains.annotations.Nullable;
 import org.jetbrains.jet.lang.descriptors.TypeParameterDescriptor;
+import org.jetbrains.jet.lang.resolve.calls.inference.InferencePackage;
 import org.jetbrains.jet.lang.resolve.scopes.SubstitutingScope;
 import org.jetbrains.jet.lang.types.lang.KotlinBuiltIns;
 import org.jetbrains.jet.lang.types.typeUtil.TypeUtilPackage;
@@ -186,28 +187,36 @@ public class TypeSubstitutor {
         TypeProjection replacement = substitution.get(type.getConstructor());
 
         if (replacement != null) {
-            switch (conflictType(originalProjectionKind, replacement.getProjectionKind())) {
-                case OUT_IN_IN_POSITION:
-                    throw new SubstitutionException("Out-projection in in-position");
-                case IN_IN_OUT_POSITION:
-                    // todo use the right type parameter variance and upper bound
-                    return new TypeProjectionImpl(Variance.OUT_VARIANCE, KotlinBuiltIns.getInstance().getNullableAnyType());
-                case NO_CONFLICT:
-                    JetType substitutedType;
-                    CustomTypeVariable typeVariable = TypesPackage.getCustomTypeVariable(type);
-                    if (typeVariable != null) {
-                        substitutedType = typeVariable.substitutionResult(replacement.getType());
-                    }
-                    else {
-                        // this is a simple type T or T?: if it's T, we should just take replacement, if T? - we make replacement nullable
-                        substitutedType = TypeUtils.makeNullableIfNeeded(replacement.getType(), type.isMarkedNullable());
-                    }
+            VarianceConflictType varianceConflict = conflictType(originalProjectionKind, replacement.getProjectionKind());
 
-                    Variance resultingProjectionKind = combine(originalProjectionKind, replacement.getProjectionKind());
-                    return new TypeProjectionImpl(resultingProjectionKind, substitutedType);
-                default:
-                    throw new IllegalStateException();
+            // Captured type might be substituted in an opposite projection:
+            // out 'Captured (in Int)' = out Int
+            // in 'Captured (out Int)' = in Int
+            boolean allowVarianceConflict = InferencePackage.isCaptured(type);
+            if (!allowVarianceConflict) {
+                //noinspection EnumSwitchStatementWhichMissesCases
+                switch (varianceConflict) {
+                    case OUT_IN_IN_POSITION:
+                        throw new SubstitutionException("Out-projection in in-position");
+                    case IN_IN_OUT_POSITION:
+                        // todo use the right type parameter variance and upper bound
+                        return new TypeProjectionImpl(Variance.OUT_VARIANCE, KotlinBuiltIns.getInstance().getNullableAnyType());
+                }
             }
+            JetType substitutedType;
+            CustomTypeVariable typeVariable = TypesPackage.getCustomTypeVariable(type);
+            if (typeVariable != null) {
+                substitutedType = typeVariable.substitutionResult(replacement.getType());
+            }
+            else {
+                // this is a simple type T or T?: if it's T, we should just take replacement, if T? - we make replacement nullable
+                substitutedType = TypeUtils.makeNullableIfNeeded(replacement.getType(), type.isMarkedNullable());
+            }
+
+            Variance resultingProjectionKind = varianceConflict == VarianceConflictType.NO_CONFLICT
+                                               ? combine(originalProjectionKind, replacement.getProjectionKind())
+                                               : originalProjectionKind;
+            return new TypeProjectionImpl(resultingProjectionKind, substitutedType);
         }
         // The type is not within the substitution range, i.e. Foo, Bar<T> etc.
         return substituteCompoundType(originalProjection, recursionDepth);