Infinite compile time with type inference union-typed implicit

[propensive]

The following appears to send the compiler into an infinite loop, but only when the return type of x is used to infer the type parameter of the call to y:

object C {
  trait X[T]
  implicit def u[A, B]: X[A | B] = new X[A | B] {}
  def y[T](implicit x: X[T]): T = ???
  val x: 1 & 2 | 2 & 3 = y
}

My guess is that the interaction between the type inference of y's parameter T and implicit search is underconstrained. The type expression (1 & 2 | 2 & 3) must contain at least one repeated type (here, 2).