Fix scala#7512: Normalize arguments before instantiation

The newly added test is blacklisted for pickling tests because the after
pickler code path doesn't go thought TypeApplications and keeps types
un-normalized, albeit equivalant to their before pickling counterparts.

Author: OlivierBlanvillain

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

@@ -342,7 +342,7 @@ class TypeApplications(val self: Type) extends AnyVal {
             }
             if ((dealiased eq stripped) || followAlias)
               try {
-                val instantiated = dealiased.instantiate(args)
+                val instantiated = dealiased.instantiate(args.map(_.simplified))
                 if (followAlias) instantiated.normalized else instantiated
               }
               catch { case ex: IndexOutOfBoundsException => AppliedType(self, args) }

compiler/test/dotc/pos-test-pickling.blacklist

@@ -39,6 +39,7 @@ i9999.scala
 9757.scala
 9890.scala
 13491.scala
+7512.scala
 
 # Opaque type
 i5720.scala

tests/pos/7512.scala

@@ -0,0 +1,24 @@
+import scala.compiletime.ops.int.S
+
+object InfiniteLoopMatchType {
+    def main(args: Array[String]): Unit = {
+        testProd(2, 5)
+    }
+
+    def testProd(a: Int, b: Int)(using ev: (a.type * b.type) =:= (b.type * a.type)) = true
+
+    type *[A <: Int, B <: Int] <: Int = A match {
+        case 0 => 0
+        case _ => MultiplyLoop[A, B, 0]
+    }
+
+    type MultiplyLoop[A <: Int, B <: Int, Acc <: Int] <: Int = A match {
+        case 0 => Acc
+        case S[aMinusOne] => MultiplyLoop[aMinusOne, B, B + Acc]
+    }
+
+    type +[A <: Int, B <: Int] <: Int = A match {
+        case 0 => B
+        case S[aMinusOne] => aMinusOne + S[B]
+    }
+}