Handle feature interaction between subtyping or types and hk types

Author: odersky

src/dotty/tools/dotc/core/TypeComparer.scala

@@ -324,8 +324,18 @@ class TypeComparer(initctx: Context) extends DotClass with ConstraintHandling {
     case AndType(tp11, tp12) =>
       if (tp11.stripTypeVar eq tp12.stripTypeVar) isSubType(tp11, tp2)
       else thirdTry(tp1, tp2)
-    case OrType(tp11, tp12) =>
-      isSubType(tp11, tp2) && isSubType(tp12, tp2)
+    case tp1 @ OrType(tp11, tp12) =>
+      def joinOK = tp2.dealias match {
+        case tp12: HKApply =>
+          // If we apply the default algorithm for `A[X] | B[Y] <: C[Z]` where `C` is a
+          // type parameter, we will instantiate `C` to `A` and then fail when comparing
+          // with `B[Y]`. To do the right thing, we need to instantiate `C` to the
+          // common superclass of `A` and `B`.
+          isSubType(tp1.join, tp2)
+        case _ =>
+          false
+      }
+      joinOK || isSubType(tp11, tp2) && isSubType(tp12, tp2)
     case ErrorType =>
       true
     case _ =>