Avoid creation of @SplicedType quote local refrences

The type declarations annotated with `@SplicedType` are only meant for
types that come from outside the quote. If the reference to the `Type[T]`
is to a definition within the quote (i.e. its level is grater than 0) we
can use it directly. The `@SplicedType` for that type will be generated
in a future compilation phase when the `Type[T]` definition reaches
level 0.

Fixes #17026

Author: nicolasstucki

compiler/src/dotty/tools/dotc/transform/PCPCheckAndHeal.scala

@@ -241,14 +241,15 @@ class PCPCheckAndHeal(@constructorOnly ictx: Context) extends TreeMapWithStages(
    *  reference to a type alias containing the equivalent of `${summon[quoted.Type[T]]}`.
    *  Emits and error if `T` cannot be healed and returns `T`.
    */
-  protected def tryHeal(sym: Symbol, tp: TypeRef, pos: SrcPos)(using Context): TypeRef = {
+  protected def tryHeal(sym: Symbol, tp: TypeRef, pos: SrcPos)(using Context): Type = {
     val reqType = defn.QuotedTypeClass.typeRef.appliedTo(tp)
     val tag = ctx.typer.inferImplicitArg(reqType, pos.span)
     tag.tpe match
 
       case tp: TermRef =>
         checkStable(tp, pos, "type witness")
-        getQuoteTypeTags.getTagRef(tp)
+        if levelOf(tp.symbol) > 0 then tp.select(tpnme.Underlying)
+        else getQuoteTypeTags.getTagRef(tp)
       case _: SearchFailureType =>
         report.error(
           ctx.typer.missingArgMsg(tag, reqType, "")

tests/pos-macros/i17026.scala

@@ -0,0 +1,3 @@
+import scala.quoted.*
+def macroImpl(using Quotes) =
+  '{ def weird[A: Type](using Quotes) = Type.of[A] }

tests/pos-macros/i17026b.scala

@@ -0,0 +1,7 @@
+import scala.quoted.*
+
+def macroImpl(using Quotes) =
+  '{
+    def weird[A: ToExpr: Type](a: A)(using quotes: Quotes) =
+      '{ Some(${ Expr(a) }) }
+  }