diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index b7281687ad710..612abd197517a 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -34806,7 +34806,9 @@ export function createTypeChecker(host: TypeCheckerHost): TypeChecker {
                 if (candidate.typeParameters) {
                     // If we are *inside the body of candidate*, we need to create a clone of `candidate` with differing type parameter identities,
                     // so our inference results for this call doesn't pollute expression types referencing the outer type parameter!
-                    if (candidate.declaration && findAncestor(node, a => a === candidate.declaration)) {
+                    const paramLocation = candidate.typeParameters[0].symbol.declarations?.[0]?.parent;
+                    const candidateParameterContext = paramLocation || (candidate.declaration && isConstructorDeclaration(candidate.declaration) ? candidate.declaration.parent : candidate.declaration);
+                    if (candidateParameterContext && findAncestor(node, a => a === candidateParameterContext)) {
                         candidate = getImplementationSignature(candidate);
                     }
                     let typeArgumentTypes: readonly Type[] | undefined;
diff --git a/tests/baselines/reference/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.js b/tests/baselines/reference/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.js
new file mode 100644
index 0000000000000..e407a66f3f087
--- /dev/null
+++ b/tests/baselines/reference/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.js
@@ -0,0 +1,73 @@
+//// [tests/cases/compiler/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts] ////
+
+//// [inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts]
+// simple example
+export class Test<A, B> {
+    constructor(public a: A, public b: B) { }
+
+    test<C>(c: C): Test<B, C> {
+        return new Test(this.b, c);
+    }
+}
+
+// complicated one
+interface Supervisor<out T> {
+    zip<A>(right: Supervisor<A>): Supervisor<[T, A]>;
+}
+
+export class Zip<out T0, out T1> implements Supervisor<readonly [T0, T1]> {
+    constructor(
+        readonly left: Supervisor<T0>,
+        readonly right: Supervisor<T1>,
+    ) { }
+
+    zip<A>(right: Supervisor<A>): Supervisor<[[T0, T1], A]> {
+        return new Zip(this, right);
+    }
+}
+
+// indirect
+type Assign<T, U> = Omit<T, keyof U> & U;
+
+class Base<T> {
+    constructor(public t: T) { }
+}
+
+export class Foo<T> extends Base<T> {
+    update(): Foo<Assign<T, { x: number }>> {
+        const v: Assign<T, { x: number }> = Object.assign(this.t, { x: 1 });
+        return new Foo(v);
+    }
+}
+
+//// [inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.js]
+// simple example
+export class Test {
+    constructor(a, b) {
+        this.a = a;
+        this.b = b;
+    }
+    test(c) {
+        return new Test(this.b, c);
+    }
+}
+export class Zip {
+    constructor(left, right) {
+        this.left = left;
+        this.right = right;
+    }
+    zip(right) {
+        return new Zip(this, right);
+    }
+}
+class Base {
+    constructor(t) {
+        this.t = t;
+    }
+}
+export class Foo extends Base {
+    update() {
+        const v = Object.assign(this.t, { x: 1 });
+        return new Foo(v);
+    }
+}
diff --git a/tests/baselines/reference/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.symbols b/tests/baselines/reference/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.symbols
new file mode 100644
index 0000000000000..5eff036d33422
--- /dev/null
+++ b/tests/baselines/reference/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.symbols
@@ -0,0 +1,138 @@
+//// [tests/cases/compiler/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts] ////
+
+=== inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts ===
+// simple example
+export class Test<A, B> {
+>Test : Symbol(Test, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 0, 0))
+>A : Symbol(A, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 1, 18))
+>B : Symbol(B, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 1, 20))
+
+    constructor(public a: A, public b: B) { }
+>a : Symbol(Test.a, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 2, 16))
+>A : Symbol(A, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 1, 18))
+>b : Symbol(Test.b, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 2, 28))
+>B : Symbol(B, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 1, 20))
+
+    test<C>(c: C): Test<B, C> {
+>test : Symbol(Test.test, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 2, 45))
+>C : Symbol(C, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 4, 9))
+>c : Symbol(c, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 4, 12))
+>C : Symbol(C, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 4, 9))
+>Test : Symbol(Test, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 0, 0))
+>B : Symbol(B, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 1, 20))
+>C : Symbol(C, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 4, 9))
+
+        return new Test(this.b, c);
+>Test : Symbol(Test, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 0, 0))
+>this.b : Symbol(Test.b, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 2, 28))
+>this : Symbol(Test, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 0, 0))
+>b : Symbol(Test.b, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 2, 28))
+>c : Symbol(c, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 4, 12))
+    }
+}
+
+// complicated one
+interface Supervisor<out T> {
+>Supervisor : Symbol(Supervisor, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 7, 1))
+>T : Symbol(T, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 10, 21))
+
+    zip<A>(right: Supervisor<A>): Supervisor<[T, A]>;
+>zip : Symbol(Supervisor.zip, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 10, 29))
+>A : Symbol(A, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 11, 8))
+>right : Symbol(right, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 11, 11))
+>Supervisor : Symbol(Supervisor, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 7, 1))
+>A : Symbol(A, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 11, 8))
+>Supervisor : Symbol(Supervisor, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 7, 1))
+>T : Symbol(T, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 10, 21))
+>A : Symbol(A, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 11, 8))
+}
+
+export class Zip<out T0, out T1> implements Supervisor<readonly [T0, T1]> {
+>Zip : Symbol(Zip, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 12, 1))
+>T0 : Symbol(T0, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 14, 17))
+>T1 : Symbol(T1, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 14, 24))
+>Supervisor : Symbol(Supervisor, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 7, 1))
+>T0 : Symbol(T0, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 14, 17))
+>T1 : Symbol(T1, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 14, 24))
+
+    constructor(
+        readonly left: Supervisor<T0>,
+>left : Symbol(Zip.left, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 15, 16))
+>Supervisor : Symbol(Supervisor, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 7, 1))
+>T0 : Symbol(T0, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 14, 17))
+
+        readonly right: Supervisor<T1>,
+>right : Symbol(Zip.right, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 16, 38))
+>Supervisor : Symbol(Supervisor, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 7, 1))
+>T1 : Symbol(T1, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 14, 24))
+
+    ) { }
+
+    zip<A>(right: Supervisor<A>): Supervisor<[[T0, T1], A]> {
+>zip : Symbol(Zip.zip, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 18, 9))
+>A : Symbol(A, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 20, 8))
+>right : Symbol(right, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 20, 11))
+>Supervisor : Symbol(Supervisor, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 7, 1))
+>A : Symbol(A, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 20, 8))
+>Supervisor : Symbol(Supervisor, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 7, 1))
+>T0 : Symbol(T0, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 14, 17))
+>T1 : Symbol(T1, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 14, 24))
+>A : Symbol(A, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 20, 8))
+
+        return new Zip(this, right);
+>Zip : Symbol(Zip, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 12, 1))
+>this : Symbol(Zip, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 12, 1))
+>right : Symbol(right, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 20, 11))
+    }
+}
+
+// indirect
+type Assign<T, U> = Omit<T, keyof U> & U;
+>Assign : Symbol(Assign, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 23, 1))
+>T : Symbol(T, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 26, 12))
+>U : Symbol(U, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 26, 14))
+>Omit : Symbol(Omit, Decl(lib.es5.d.ts, --, --))
+>T : Symbol(T, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 26, 12))
+>U : Symbol(U, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 26, 14))
+>U : Symbol(U, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 26, 14))
+
+class Base<T> {
+>Base : Symbol(Base, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 26, 41))
+>T : Symbol(T, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 28, 11))
+
+    constructor(public t: T) { }
+>t : Symbol(Base.t, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 29, 16))
+>T : Symbol(T, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 28, 11))
+}
+
+export class Foo<T> extends Base<T> {
+>Foo : Symbol(Foo, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 30, 1))
+>T : Symbol(T, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 32, 17))
+>Base : Symbol(Base, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 26, 41))
+>T : Symbol(T, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 32, 17))
+
+    update(): Foo<Assign<T, { x: number }>> {
+>update : Symbol(Foo.update, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 32, 37))
+>Foo : Symbol(Foo, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 30, 1))
+>Assign : Symbol(Assign, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 23, 1))
+>T : Symbol(T, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 32, 17))
+>x : Symbol(x, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 33, 29))
+
+        const v: Assign<T, { x: number }> = Object.assign(this.t, { x: 1 });
+>v : Symbol(v, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 34, 13))
+>Assign : Symbol(Assign, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 23, 1))
+>T : Symbol(T, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 32, 17))
+>x : Symbol(x, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 34, 28))
+>Object.assign : Symbol(ObjectConstructor.assign, Decl(lib.es2015.core.d.ts, --, --), Decl(lib.es2015.core.d.ts, --, --), Decl(lib.es2015.core.d.ts, --, --), Decl(lib.es2015.core.d.ts, --, --))
+>Object : Symbol(Object, Decl(lib.es5.d.ts, --, --), Decl(lib.es5.d.ts, --, --))
+>assign : Symbol(ObjectConstructor.assign, Decl(lib.es2015.core.d.ts, --, --), Decl(lib.es2015.core.d.ts, --, --), Decl(lib.es2015.core.d.ts, --, --), Decl(lib.es2015.core.d.ts, --, --))
+>this.t : Symbol(Base.t, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 29, 16))
+>this : Symbol(Foo, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 30, 1))
+>t : Symbol(Base.t, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 29, 16))
+>x : Symbol(x, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 34, 67))
+
+        return new Foo(v);
+>Foo : Symbol(Foo, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 30, 1))
+>v : Symbol(v, Decl(inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts, 34, 13))
+    }
+}
diff --git a/tests/baselines/reference/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.types b/tests/baselines/reference/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.types
new file mode 100644
index 0000000000000..fd159c4a51979
--- /dev/null
+++ b/tests/baselines/reference/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.types
@@ -0,0 +1,139 @@
+//// [tests/cases/compiler/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts] ////
+
+=== inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts ===
+// simple example
+export class Test<A, B> {
+>Test : Test<A, B>
+>     : ^^^^^^^^^^
+
+    constructor(public a: A, public b: B) { }
+>a : A
+>  : ^
+>b : B
+>  : ^
+
+    test<C>(c: C): Test<B, C> {
+>test : <C>(c: C) => Test<B, C>
+>     : ^ ^^ ^^ ^^^^^          
+>c : C
+>  : ^
+
+        return new Test(this.b, c);
+>new Test(this.b, c) : Test<B, C>
+>                    : ^^^^^^^^^^
+>Test : typeof Test
+>     : ^^^^^^^^^^^
+>this.b : B
+>       : ^
+>this : this
+>     : ^^^^
+>b : B
+>  : ^
+>c : C
+>  : ^
+    }
+}
+
+// complicated one
+interface Supervisor<out T> {
+    zip<A>(right: Supervisor<A>): Supervisor<[T, A]>;
+>zip : <A>(right: Supervisor<A>) => Supervisor<[T, A]>
+>    : ^ ^^     ^^             ^^^^^                  
+>right : Supervisor<A>
+>      : ^^^^^^^^^^^^^
+}
+
+export class Zip<out T0, out T1> implements Supervisor<readonly [T0, T1]> {
+>Zip : Zip<T0, T1>
+>    : ^^^^^^^^^^^
+
+    constructor(
+        readonly left: Supervisor<T0>,
+>left : Supervisor<T0>
+>     : ^^^^^^^^^^^^^^
+
+        readonly right: Supervisor<T1>,
+>right : Supervisor<T1>
+>      : ^^^^^^^^^^^^^^
+
+    ) { }
+
+    zip<A>(right: Supervisor<A>): Supervisor<[[T0, T1], A]> {
+>zip : <A>(right: Supervisor<A>) => Supervisor<[[T0, T1], A]>
+>    : ^ ^^     ^^             ^^^^^                         
+>right : Supervisor<A>
+>      : ^^^^^^^^^^^^^
+
+        return new Zip(this, right);
+>new Zip(this, right) : Zip<[T0, T1], A>
+>                     : ^^^^^^^^^^^^^^^^
+>Zip : typeof Zip
+>    : ^^^^^^^^^^
+>this : this
+>     : ^^^^
+>right : Supervisor<A>
+>      : ^^^^^^^^^^^^^
+    }
+}
+
+// indirect
+type Assign<T, U> = Omit<T, keyof U> & U;
+>Assign : Assign<T, U>
+>       : ^^^^^^^^^^^^
+
+class Base<T> {
+>Base : Base<T>
+>     : ^^^^^^^
+
+    constructor(public t: T) { }
+>t : T
+>  : ^
+}
+
+export class Foo<T> extends Base<T> {
+>Foo : Foo<T>
+>    : ^^^^^^
+>Base : Base<T>
+>     : ^^^^^^^
+
+    update(): Foo<Assign<T, { x: number }>> {
+>update : () => Foo<Assign<T, { x: number; }>>
+>       : ^^^^^^                              
+>x : number
+>  : ^^^^^^
+
+        const v: Assign<T, { x: number }> = Object.assign(this.t, { x: 1 });
+>v : Assign<T, { x: number; }>
+>  : ^^^^^^^^^^^^^^^      ^^^^
+>x : number
+>  : ^^^^^^
+>Object.assign(this.t, { x: 1 }) : T & { x: number; }
+>                                : ^^^^^^^^^^^^^^^^^^
+>Object.assign : { <T_1 extends {}, U>(target: T_1, source: U): T_1 & U; <T_2 extends {}, U_1, V>(target: T_2, source1: U_1, source2: V): T_2 & U_1 & V; <T_3 extends {}, U_2, V_1, W>(target: T_3, source1: U_2, source2: V_1, source3: W): T_3 & U_2 & V_1 & W; (target: object, ...sources: any[]): any; }
+>              : ^^^   ^^^^^^^^^^^^^ ^^      ^^   ^^      ^^ ^^^^^^^^^^^^^   ^^^^^^^^^  ^^   ^^ ^^      ^^   ^^       ^^   ^^       ^^ ^^^^^^^^^^^^^^^^^^^   ^^^^^^^^^  ^^   ^^   ^^ ^^      ^^   ^^       ^^   ^^       ^^   ^^       ^^ ^^^^^^^^^^^^^^^^^^^^^^^^^      ^^      ^^^^^       ^^     ^^^^^^^^^
+>Object : ObjectConstructor
+>       : ^^^^^^^^^^^^^^^^^
+>assign : { <T_1 extends {}, U>(target: T_1, source: U): T_1 & U; <T_2 extends {}, U_1, V>(target: T_2, source1: U_1, source2: V): T_2 & U_1 & V; <T_3 extends {}, U_2, V_1, W>(target: T_3, source1: U_2, source2: V_1, source3: W): T_3 & U_2 & V_1 & W; (target: object, ...sources: any[]): any; }
+>       : ^^^   ^^^^^^^^^^^^^ ^^      ^^   ^^      ^^ ^^^^^^^^^^^^^   ^^^^^^^^^  ^^   ^^ ^^      ^^   ^^       ^^   ^^       ^^ ^^^^^^^^^^^^^^^^^^^   ^^^^^^^^^  ^^   ^^   ^^ ^^      ^^   ^^       ^^   ^^       ^^   ^^       ^^ ^^^^^^^^^^^^^^^^^^^^^^^^^      ^^      ^^^^^       ^^     ^^^^^^^^^
+>this.t : T
+>       : ^
+>this : this
+>     : ^^^^
+>t : T
+>  : ^
+>{ x: 1 } : { x: number; }
+>         : ^^^^^^^^^^^^^^
+>x : number
+>  : ^^^^^^
+>1 : 1
+>  : ^
+
+        return new Foo(v);
+>new Foo(v) : Foo<Assign<T, { x: number; }>>
+>           : ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
+>Foo : typeof Foo
+>    : ^^^^^^^^^^
+>v : Assign<T, { x: number; }>
+>  : ^^^^^^^^^^^^^^^^^^^^^^^^^
+    }
+}
diff --git a/tests/cases/compiler/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts b/tests/cases/compiler/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts
new file mode 100644
index 0000000000000..f35f4bf0d4610
--- /dev/null
+++ b/tests/cases/compiler/inferenceOuterResultNotIncorrectlyInstantiatedWithInnerResult.ts
@@ -0,0 +1,39 @@
+// @target: es6
+// simple example
+export class Test<A, B> {
+    constructor(public a: A, public b: B) { }
+
+    test<C>(c: C): Test<B, C> {
+        return new Test(this.b, c);
+    }
+}
+
+// complicated one
+interface Supervisor<out T> {
+    zip<A>(right: Supervisor<A>): Supervisor<[T, A]>;
+}
+
+export class Zip<out T0, out T1> implements Supervisor<readonly [T0, T1]> {
+    constructor(
+        readonly left: Supervisor<T0>,
+        readonly right: Supervisor<T1>,
+    ) { }
+
+    zip<A>(right: Supervisor<A>): Supervisor<[[T0, T1], A]> {
+        return new Zip(this, right);
+    }
+}
+
+// indirect
+type Assign<T, U> = Omit<T, keyof U> & U;
+
+class Base<T> {
+    constructor(public t: T) { }
+}
+
+export class Foo<T> extends Base<T> {
+    update(): Foo<Assign<T, { x: number }>> {
+        const v: Assign<T, { x: number }> = Object.assign(this.t, { x: 1 });
+        return new Foo(v);
+    }
+}
\ No newline at end of file