diff --git a/mypy/checker.py b/mypy/checker.py
index a01098bad96a..e64cea7b4cd1 100644
--- a/mypy/checker.py
+++ b/mypy/checker.py
@@ -199,6 +199,7 @@
     UnboundType,
     UninhabitedType,
     UnionType,
+    flatten_nested_unions,
     get_proper_type,
     get_proper_types,
     is_literal_type,
@@ -206,7 +207,6 @@
     is_optional,
     remove_optional,
     strip_type,
-    union_items,
 )
 from mypy.typetraverser import TypeTraverserVisitor
 from mypy.typevars import fill_typevars, fill_typevars_with_any, has_no_typevars
@@ -1464,7 +1464,8 @@ def check_overlapping_op_methods(
         # inheritance. (This is consistent with how we handle overloads: we also
         # do not try checking unsafe overlaps due to multiple inheritance there.)
 
-        for forward_item in union_items(forward_type):
+        for forward_item in flatten_nested_unions([forward_type]):
+            forward_item = get_proper_type(forward_item)
             if isinstance(forward_item, CallableType):
                 if self.is_unsafe_overlapping_op(forward_item, forward_base, reverse_type):
                     self.msg.operator_method_signatures_overlap(
@@ -5320,8 +5321,8 @@ def replay_lookup(new_parent_type: ProperType) -> Optional[Type]:
             # Take each element in the parent union and replay the original lookup procedure
             # to figure out which parents are compatible.
             new_parent_types = []
-            for item in union_items(parent_type):
-                member_type = replay_lookup(item)
+            for item in flatten_nested_unions(parent_type.items):
+                member_type = replay_lookup(get_proper_type(item))
                 if member_type is None:
                     # We were unable to obtain the member type. So, we give up on refining this
                     # parent type entirely and abort.
diff --git a/mypy/plugins/ctypes.py b/mypy/plugins/ctypes.py
index 357b28a48385..9c59f210194f 100644
--- a/mypy/plugins/ctypes.py
+++ b/mypy/plugins/ctypes.py
@@ -18,8 +18,8 @@
     Type,
     TypeOfAny,
     UnionType,
+    flatten_nested_unions,
     get_proper_type,
-    union_items,
 )
 
 
@@ -54,7 +54,8 @@ def _autoconvertible_to_cdata(tp: Type, api: "mypy.plugin.CheckerPluginInterface
     # items. This is not quite correct - strictly speaking, only types convertible to *all* of the
     # union items should be allowed. This may be worth changing in the future, but the more
     # correct algorithm could be too strict to be useful.
-    for t in union_items(tp):
+    for t in flatten_nested_unions([tp]):
+        t = get_proper_type(t)
         # Every type can be converted from itself (obviously).
         allowed_types.append(t)
         if isinstance(t, Instance):
@@ -197,7 +198,8 @@ def array_value_callback(ctx: "mypy.plugin.AttributeContext") -> Type:
     et = _get_array_element_type(ctx.type)
     if et is not None:
         types: List[Type] = []
-        for tp in union_items(et):
+        for tp in flatten_nested_unions([et]):
+            tp = get_proper_type(tp)
             if isinstance(tp, AnyType):
                 types.append(AnyType(TypeOfAny.from_another_any, source_any=tp))
             elif isinstance(tp, Instance) and tp.type.fullname == "ctypes.c_char":
@@ -219,7 +221,8 @@ def array_raw_callback(ctx: "mypy.plugin.AttributeContext") -> Type:
     et = _get_array_element_type(ctx.type)
     if et is not None:
         types: List[Type] = []
-        for tp in union_items(et):
+        for tp in flatten_nested_unions([et]):
+            tp = get_proper_type(tp)
             if (
                 isinstance(tp, AnyType)
                 or isinstance(tp, Instance)
diff --git a/mypy/typeanal.py b/mypy/typeanal.py
index ebec16e5e171..f85df803053f 100644
--- a/mypy/typeanal.py
+++ b/mypy/typeanal.py
@@ -83,8 +83,8 @@
     UnpackType,
     bad_type_type_item,
     callable_with_ellipsis,
+    flatten_nested_unions,
     get_proper_type,
-    union_items,
 )
 from mypy.typetraverser import TypeTraverserVisitor
 
@@ -1739,11 +1739,16 @@ def make_optional_type(t: Type) -> Type:
     is called during semantic analysis and simplification only works during
     type checking.
     """
-    t = get_proper_type(t)
-    if isinstance(t, NoneType):
+    p_t = get_proper_type(t)
+    if isinstance(p_t, NoneType):
         return t
-    elif isinstance(t, UnionType):
-        items = [item for item in union_items(t) if not isinstance(item, NoneType)]
+    elif isinstance(p_t, UnionType):
+        # Eagerly expanding aliases is not safe during semantic analysis.
+        items = [
+            item
+            for item in flatten_nested_unions(p_t.items, handle_type_alias_type=False)
+            if not isinstance(get_proper_type(item), NoneType)
+        ]
         return UnionType(items + [NoneType()], t.line, t.column)
     else:
         return UnionType([t, NoneType()], t.line, t.column)
diff --git a/mypy/types.py b/mypy/types.py
index 60e33df40fbb..51de39aec9d7 100644
--- a/mypy/types.py
+++ b/mypy/types.py
@@ -2524,7 +2524,7 @@ def relevant_items(self) -> List[Type]:
         if state.strict_optional:
             return self.items
         else:
-            return [i for i in get_proper_types(self.items) if not isinstance(i, NoneType)]
+            return [i for i in self.items if not isinstance(get_proper_type(i), NoneType)]
 
     def serialize(self) -> JsonDict:
         return {".class": "UnionType", "items": [t.serialize() for t in self.items]}
@@ -3178,21 +3178,6 @@ def flatten_nested_unions(
     return flat_items
 
 
-def union_items(typ: Type) -> List[ProperType]:
-    """Return the flattened items of a union type.
-
-    For non-union types, return a list containing just the argument.
-    """
-    typ = get_proper_type(typ)
-    if isinstance(typ, UnionType):
-        items = []
-        for item in typ.items:
-            items.extend(union_items(item))
-        return items
-    else:
-        return [typ]
-
-
 def invalid_recursive_alias(seen_nodes: Set[mypy.nodes.TypeAlias], target: Type) -> bool:
     """Flag aliases like A = Union[int, A] (and similar mutual aliases).
 
diff --git a/test-data/unit/check-recursive-types.test b/test-data/unit/check-recursive-types.test
index 28adb827bc08..e8b223d08fd9 100644
--- a/test-data/unit/check-recursive-types.test
+++ b/test-data/unit/check-recursive-types.test
@@ -389,6 +389,14 @@ reveal_type(bar(lla))  # N: Revealed type is "__main__.A"
 reveal_type(bar(llla))  # N: Revealed type is "__main__.A"
 [builtins fixtures/isinstancelist.pyi]
 
+[case testRecursiveAliasesWithOptional]
+# flags: --enable-recursive-aliases
+from typing import Optional, Sequence
+
+A = Sequence[Optional[A]]
+x: A
+y: str = x[0]  # E: Incompatible types in assignment (expression has type "Optional[A]", variable has type "str")
+
 [case testRecursiveAliasesProhibitBadAliases]
 # flags: --enable-recursive-aliases
 from typing import Union, Type, List, TypeVar
diff --git a/test-data/unit/check-typeguard.test b/test-data/unit/check-typeguard.test
index 64fc7ea695cb..cf72e7033087 100644
--- a/test-data/unit/check-typeguard.test
+++ b/test-data/unit/check-typeguard.test
@@ -421,7 +421,7 @@ def foobar(items: List[object]):
     c: List[Bar] = [x for x in items if is_foo(x)]  # E: List comprehension has incompatible type List[Foo]; expected List[Bar]
 [builtins fixtures/tuple.pyi]
 
-[case testTypeGuardNestedRestrictionUnionIsInstance-xfail]
+[case testTypeGuardNestedRestrictionUnionIsInstance]
 from typing_extensions import TypeGuard
 from typing import Any, List