diff --git a/compiler/testData/diagnostics/tests/generics/starProjections/invalid.kt b/compiler/testData/diagnostics/tests/generics/starProjections/invalid.kt
index cf29f51d3a9..55910af194f 100644
--- a/compiler/testData/diagnostics/tests/generics/starProjections/invalid.kt
+++ b/compiler/testData/diagnostics/tests/generics/starProjections/invalid.kt
@@ -17,7 +17,8 @@ fun main(a: A<*>, j: JavaClass<*>, i2: Inv2<*>) {
     j.foo() checkType { <!NI;DEBUG_INFO_UNRESOLVED_WITH_TARGET, NI;UNRESOLVED_REFERENCE_WRONG_RECEIVER!>_<!><Any?>() }
     i2.x checkType { <!NI;DEBUG_INFO_UNRESOLVED_WITH_TARGET, NI;UNRESOLVED_REFERENCE_WRONG_RECEIVER!>_<!><Any?>() }
 
-    j.<!OI;MEMBER_PROJECTED_OUT!>bar<!>(<!NI;CONSTANT_EXPECTED_TYPE_MISMATCH!>1<!>, <!NI;CONSTANT_EXPECTED_TYPE_MISMATCH!>2<!>, <!NI;TYPE_MISMATCH!>Any()<!>)
+    j.bar(<!NI;CONSTANT_EXPECTED_TYPE_MISMATCH, OI;CONSTANT_EXPECTED_TYPE_MISMATCH!>1<!>, <!NI;CONSTANT_EXPECTED_TYPE_MISMATCH, OI;CONSTANT_EXPECTED_TYPE_MISMATCH!>2<!>, <!NI;TYPE_MISMATCH, OI;TYPE_MISMATCH_DUE_TO_TYPE_PROJECTIONS!>Any()<!>)
+    j.bar(null)
 }
 
 // FILE: JavaClass.java
diff --git a/compiler/testData/diagnostics/tests/j+k/flexibleNothing.kt b/compiler/testData/diagnostics/tests/j+k/flexibleNothing.kt
new file mode 100644
index 00000000000..f5596d04f2e
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/j+k/flexibleNothing.kt
@@ -0,0 +1,17 @@
+// FILE: TestClass.java
+import org.jetbrains.annotations.Nullable;
+public class TestClass {
+    public <T> T set(@Nullable String key, @Nullable T t) {
+        return t;
+    }
+}
+
+// FILE: main.kt
+fun run() {
+    val testClass = TestClass()
+    // inferred as `set<Nothing>()`, return type is Nothing!
+    testClass.set("test", null)
+
+    // Should not be unreachable
+    run()
+}
diff --git a/compiler/testData/diagnostics/tests/j+k/flexibleNothing.txt b/compiler/testData/diagnostics/tests/j+k/flexibleNothing.txt
new file mode 100644
index 00000000000..c387c1715fd
--- /dev/null
+++ b/compiler/testData/diagnostics/tests/j+k/flexibleNothing.txt
@@ -0,0 +1,11 @@
+package
+
+public fun run(): kotlin.Unit
+
+public open class TestClass {
+    public constructor TestClass()
+    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 operator fun </*0*/ T : kotlin.Any!> set(/*0*/ @org.jetbrains.annotations.Nullable key: kotlin.String?, /*1*/ @org.jetbrains.annotations.Nullable t: T?): T!
+    public open override /*1*/ /*fake_override*/ fun toString(): kotlin.String
+}
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
index 7cf880c9895..b4ac5a32e40 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/DiagnosticsTestGenerated.java
@@ -12578,6 +12578,12 @@ public class DiagnosticsTestGenerated extends AbstractDiagnosticsTest {
                 doTest(fileName);
             }
 
+            @TestMetadata("flexibleNothing.kt")
+            public void testFlexibleNothing() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/j+k/flexibleNothing.kt");
+                doTest(fileName);
+            }
+
             @TestMetadata("genericConstructorWithMultipleBounds.kt")
             public void testGenericConstructorWithMultipleBounds() throws Exception {
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/j+k/genericConstructorWithMultipleBounds.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
index 7ee70dc9738..0834d174a21 100644
--- a/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/checkers/javac/DiagnosticsUsingJavacTestGenerated.java
@@ -12578,6 +12578,12 @@ public class DiagnosticsUsingJavacTestGenerated extends AbstractDiagnosticsUsing
                 doTest(fileName);
             }
 
+            @TestMetadata("flexibleNothing.kt")
+            public void testFlexibleNothing() throws Exception {
+                String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/j+k/flexibleNothing.kt");
+                doTest(fileName);
+            }
+
             @TestMetadata("genericConstructorWithMultipleBounds.kt")
             public void testGenericConstructorWithMultipleBounds() throws Exception {
                 String fileName = KotlinTestUtils.navigationMetadata("compiler/testData/diagnostics/tests/j+k/genericConstructorWithMultipleBounds.kt");
diff --git a/core/descriptors/src/org/jetbrains/kotlin/builtins/KotlinBuiltIns.java b/core/descriptors/src/org/jetbrains/kotlin/builtins/KotlinBuiltIns.java
index 1b934443a33..ba388478f59 100644
--- a/core/descriptors/src/org/jetbrains/kotlin/builtins/KotlinBuiltIns.java
+++ b/core/descriptors/src/org/jetbrains/kotlin/builtins/KotlinBuiltIns.java
@@ -976,12 +976,12 @@ public abstract class KotlinBuiltIns {
 
     public static boolean isNothing(@NotNull KotlinType type) {
         return isNothingOrNullableNothing(type)
-               && !type.isMarkedNullable();
+               && !TypeUtils.isNullableType(type);
     }
 
     public static boolean isNullableNothing(@NotNull KotlinType type) {
         return isNothingOrNullableNothing(type)
-               && type.isMarkedNullable();
+               && TypeUtils.isNullableType(type);
     }
 
     public static boolean isNothingOrNullableNothing(@NotNull KotlinType type) {