diff --git a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/inference/CoroutineInferenceSession.kt b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/inference/CoroutineInferenceSession.kt
index 45fd2302e07..9893438e467 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/inference/CoroutineInferenceSession.kt
+++ b/compiler/frontend/src/org/jetbrains/kotlin/resolve/calls/inference/CoroutineInferenceSession.kt
@@ -242,7 +242,10 @@ class CoroutineInferenceSession(
         val resultingSubstitutor =
             NewTypeSubstitutorByConstructorMap((resultingCallSubstitutor + nonFixedTypesToResult).cast()) // TODO: SUB
 
-        val atomCompleter = createResolvedAtomCompleter(resultingSubstitutor, completedCall.context)
+        val atomCompleter = createResolvedAtomCompleter(
+            resultingSubstitutor,
+            completedCall.context.replaceBindingTrace(topLevelCallContext.trace)
+        )
 
         completeCall(completedCall, atomCompleter)
     }
diff --git a/compiler/testData/diagnostics/testsWithStdLib/coroutines/inference/kt33542.kt b/compiler/testData/diagnostics/testsWithStdLib/coroutines/inference/kt33542.kt
new file mode 100644
index 00000000000..04e3715546e
--- /dev/null
+++ b/compiler/testData/diagnostics/testsWithStdLib/coroutines/inference/kt33542.kt
@@ -0,0 +1,26 @@
+// !LANGUAGE: +NewInference
+
+import kotlin.experimental.ExperimentalTypeInference
+
+interface In<in E> {
+    fun send(element: E)
+}
+
+class InImpl<E> : In<E> {
+    override fun send(element: E) {}
+}
+
+@<!DEPRECATION, EXPERIMENTAL_IS_NOT_ENABLED!>UseExperimental<!>(ExperimentalTypeInference::class)
+public fun <T> builder(@BuilderInference block: In<T>.() -> Unit) {
+    InImpl<T>().block()
+}
+
+suspend fun yield() {}
+
+fun test() {
+    builder {
+        send(run {
+            <!ILLEGAL_SUSPEND_FUNCTION_CALL!>yield<!>() // No error but `yield` is not inside "suspension" context actually
+        })
+    }
+}
diff --git a/compiler/testData/diagnostics/testsWithStdLib/coroutines/inference/kt33542.txt b/compiler/testData/diagnostics/testsWithStdLib/coroutines/inference/kt33542.txt
new file mode 100644
index 00000000000..afd49498b41
--- /dev/null
+++ b/compiler/testData/diagnostics/testsWithStdLib/coroutines/inference/kt33542.txt
@@ -0,0 +1,20 @@
+package
+
+@kotlin.UseExperimental(markerClass = {kotlin.experimental.ExperimentalTypeInference::class}) public fun </*0*/ T> builder(/*0*/ @kotlin.BuilderInference block: In<T>.() -> kotlin.Unit): kotlin.Unit
+public fun test(): kotlin.Unit
+public suspend fun yield(): kotlin.Unit
+
+public interface In</*0*/ in E> {
+    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 abstract fun send(/*0*/ element: E): kotlin.Unit
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
+
+public final class InImpl</*0*/ E> : In<E> {
+    public constructor InImpl</*0*/ E>()
+    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*/ fun send(/*0*/ element: E): kotlin.Unit
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestWithStdLibGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestWithStdLibGenerated.java
index 659627a8ece..c37500a8003 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestWithStdLibGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestWithStdLibGenerated.java
@@ -1962,6 +1962,11 @@ public class DiagnosticsTestWithStdLibGenerated extends AbstractDiagnosticsTestW
                 runTest("compiler/testData/diagnostics/testsWithStdLib/coroutines/inference/kt32271.kt");
             }
 
+            @TestMetadata("kt33542.kt")
+            public void testKt33542() throws Exception {
+                runTest("compiler/testData/diagnostics/testsWithStdLib/coroutines/inference/kt33542.kt");
+            }
+
             @TestMetadata("kt35684.kt")
             public void testKt35684() throws Exception {
                 runTest("compiler/testData/diagnostics/testsWithStdLib/coroutines/inference/kt35684.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsTestWithStdLibUsingJavacGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsTestWithStdLibUsingJavacGenerated.java
index 930073647a1..dbd2113fa58 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsTestWithStdLibUsingJavacGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsTestWithStdLibUsingJavacGenerated.java
@@ -1962,6 +1962,11 @@ public class DiagnosticsTestWithStdLibUsingJavacGenerated extends AbstractDiagno
                 runTest("compiler/testData/diagnostics/testsWithStdLib/coroutines/inference/kt32271.kt");
             }
 
+            @TestMetadata("kt33542.kt")
+            public void testKt33542() throws Exception {
+                runTest("compiler/testData/diagnostics/testsWithStdLib/coroutines/inference/kt33542.kt");
+            }
+
             @TestMetadata("kt35684.kt")
             public void testKt35684() throws Exception {
                 runTest("compiler/testData/diagnostics/testsWithStdLib/coroutines/inference/kt35684.kt");