A slightly more conservative version of #14218 (#18352)

Author: dwijnand

compiler/src/dotty/tools/dotc/core/Types.scala

@@ -251,6 +251,11 @@ object Types {
       case _ => false
     }
 
+    /** Is this type exactly `Any`, or a type lambda ending in `Any`? */
+    def isTopOfSomeKind(using Context): Boolean = dealias match
+      case tp: TypeLambda => tp.resType.isTopOfSomeKind
+      case _ => isExactlyAny
+
     def isBottomType(using Context): Boolean =
       if ctx.mode.is(Mode.SafeNulls) && !ctx.phase.erasedTypes then hasClassSymbol(defn.NothingClass)
       else isBottomTypeAfterErasure
@@ -4896,7 +4901,7 @@ object Types {
     def hasLowerBound(using Context): Boolean = !currentEntry.loBound.isExactlyNothing
 
     /** For uninstantiated type variables: Is the upper bound different from Any? */
-    def hasUpperBound(using Context): Boolean = !currentEntry.hiBound.finalResultType.isExactlyAny
+    def hasUpperBound(using Context): Boolean = !currentEntry.hiBound.isTopOfSomeKind
 
     /** Unwrap to instance (if instantiated) or origin (if not), until result
      *  is no longer a TypeVar

compiler/src/dotty/tools/dotc/typer/Inferencing.scala

@@ -187,7 +187,11 @@ object Inferencing {
               // else hold off instantiating unbounded unconstrained variable
             else if direction != 0 then
               instantiate(tvar, fromBelow = direction < 0)
-            else if variance >= 0 && (force.ifBottom == IfBottom.ok && !tvar.hasUpperBound || tvar.hasLowerBound) then
+            else if variance >= 0 && tvar.hasLowerBound then
+              instantiate(tvar, fromBelow = true)
+            else if (variance > 0 || variance == 0 && !tvar.hasUpperBound)
+                && force.ifBottom == IfBottom.ok
+            then // if variance == 0, prefer upper bound if one is given
               instantiate(tvar, fromBelow = true)
             else if variance >= 0 && force.ifBottom == IfBottom.fail then
               fail = true