Heal type within quote internal encoding

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

@@ -37,8 +37,8 @@ import scala.annotation.constructorOnly
  *
  *  Type healing consists in transforming a phase inconsistent type `T` into a splice of `${summon[Type[T]]}`.
  *
- *  As references to types do not necessarily have an assosiated tree it is not always possible to replace the types directly.
- *  Instead we always generate a type alias for it and palce it at the start of the surounding quote. This also avoids duplication.
+ *  As references to types do not necessarily have an associated tree it is not always possible to replace the types directly.
+ *  Instead we always generate a type alias for it and place it at the start of the surrounding quote. This also avoids duplication.
  *  For example:
  *    '{
  *      val x: List[T] = List[T]()
@@ -118,7 +118,13 @@ class PCPCheckAndHeal(@constructorOnly ictx: Context) extends TreeMapWithStages(
         case Nil  => body1
         case tags => tpd.Block(tags, body1).withSpan(body.span)
 
-    super.transformQuotation(body2, quote)
+    quote match {
+      case Apply(fn1 @ TypeApply(fn0, targs), _) =>
+        val targs1 = targs.map(targ => TypeTree(healTypeOfTerm(fn1.srcPos)(targ.tpe)))
+        cpy.Apply(quote)(cpy.TypeApply(fn1)(fn0, targs1), body2 :: Nil)
+      case quote: TypeApply =>
+        cpy.TypeApply(quote)(quote.fun, body2 :: Nil)
+    }
   }
 
   /** Transform splice
@@ -168,8 +174,8 @@ class PCPCheckAndHeal(@constructorOnly ictx: Context) extends TreeMapWithStages(
   /** If the type refers to a locally defined symbol (either directly, or in a pickled type),
    *  check that its staging level matches the current level.
    *  - Static types and term are allowed at any level.
-   *  - If a type reference is used a higher level, then it is insosistent. Will atempt to heal before failing.
-   *  - If a term reference is used a different level, then it is insosistent.
+   *  - If a type reference is used a higher level, then it is inconsistent. Will attempt to heal before failing.
+   *  - If a term reference is used a different level, then it is inconsistent.
    *
    *  If `T` is a reference to a type at the wrong level, try to heal it by replacing it with
    *  a type tag of type `quoted.Type[T]`.
@@ -207,7 +213,7 @@ class PCPCheckAndHeal(@constructorOnly ictx: Context) extends TreeMapWithStages(
           mapOver(tp)
   }
 
-  /** Check phase consistency of terms and heal incosistent type references. */
+  /** Check phase consistency of terms and heal inconsistent type references. */
   private def healTypeOfTerm(pos: SrcPos)(using Context) = new TypeMap {
     def apply(tp: Type): Type =
       tp match
@@ -217,14 +223,16 @@ class PCPCheckAndHeal(@constructorOnly ictx: Context) extends TreeMapWithStages(
           levelError(tp.symbol, tp, pos)
         case tp: ThisType if level != -1 && level != levelOf(tp.cls) =>
           levelError(tp.cls, tp, pos)
+        case tp: AnnotatedType =>
+          derivedAnnotatedType(tp, apply(tp.parent), tp.annot)
         case _ =>
           if tp.typeSymbol.is(Package) then tp
           else mapOver(tp)
   }
 
   /** Try to heal reference to type `T` used in a higher level than its definition.
    *  Returns a reference to a type tag generated by `QuoteTypeTags` that contains a
-   *  refercence to a type alias containing the equivalent of `${summon[quoted.Type[T]]}`.
+   *  reference to a type alias containing the equivalent of `${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 = {

tests/pos-macros/i11587.scala

@@ -0,0 +1,15 @@
+import scala.quoted._
+class Foo:
+  def foo[T: Type](using Quotes): Unit = '{ // level 1
+    given Quotes = ???
+
+    Type.of[T]
+
+    '{ ??? : T } // level 2
+
+    '{ // level 2
+      given Quotes = ???
+      Type.of[T]
+      '{ ??? : T } // level 3
+    }
+  }