diff --git a/compiler/src/dotty/tools/dotc/core/OrderingConstraint.scala b/compiler/src/dotty/tools/dotc/core/OrderingConstraint.scala
index d6971027682b..406ec58b9846 100644
--- a/compiler/src/dotty/tools/dotc/core/OrderingConstraint.scala
+++ b/compiler/src/dotty/tools/dotc/core/OrderingConstraint.scala
@@ -309,8 +309,11 @@ class OrderingConstraint(private val boundsMap: ParamBounds,
         val r1 = recur(tp.tp1, fromBelow)
         val r2 = recur(tp.tp2, fromBelow)
         if (r1 eq tp.tp1) && (r2 eq tp.tp2) then tp
-        else if tp.isAnd then r1 & r2
-        else r1 | r2
+        else tp.match
+          case tp: OrType =>
+            TypeComparer.lub(r1, r2, isSoft = tp.isSoft)
+          case _ =>
+            r1 & r2
       case tp: TypeParamRef =>
         if tp eq param then
           if fromBelow then defn.NothingType else defn.AnyType
diff --git a/compiler/src/dotty/tools/dotc/core/TypeComparer.scala b/compiler/src/dotty/tools/dotc/core/TypeComparer.scala
index 47f36255de81..66305a306daa 100644
--- a/compiler/src/dotty/tools/dotc/core/TypeComparer.scala
+++ b/compiler/src/dotty/tools/dotc/core/TypeComparer.scala
@@ -2018,12 +2018,12 @@ class TypeComparer(@constructorOnly initctx: Context) extends ConstraintHandling
               val tp2a = dropIfSuper(tp2, tp1)
               if tp2a ne tp2 then glb(tp1, tp2a)
               else tp2 match // normalize to disjunctive normal form if possible.
-                case OrType(tp21, tp22) =>
-                  tp1 & tp21 | tp1 & tp22
+                case tp2 @ OrType(tp21, tp22) =>
+                  lub(tp1 & tp21, tp1 & tp22, isSoft = tp2.isSoft)
                 case _ =>
                   tp1 match
-                    case OrType(tp11, tp12) =>
-                      tp11 & tp2 | tp12 & tp2
+                    case tp1 @ OrType(tp11, tp12) =>
+                      lub(tp11 & tp2, tp12 & tp2, isSoft = tp1.isSoft)
                     case tp1: ConstantType =>
                       tp2 match
                         case tp2: ConstantType =>
@@ -2045,9 +2045,10 @@ class TypeComparer(@constructorOnly initctx: Context) extends ConstraintHandling
 
   /** The least upper bound of two types
    *  @param canConstrain  If true, new constraints might be added to simplify the lub.
+   *  @param isSoft        If the lub is a union, this determines whether it's a soft union.
    *  @note  We do not admit singleton types in or-types as lubs.
    */
-  def lub(tp1: Type, tp2: Type, canConstrain: Boolean = false): Type = /*>|>*/ trace(s"lub(${tp1.show}, ${tp2.show}, canConstrain=$canConstrain)", subtyping, show = true) /*<|<*/ {
+  def lub(tp1: Type, tp2: Type, canConstrain: Boolean = false, isSoft: Boolean = true): Type = /*>|>*/ trace(s"lub(${tp1.show}, ${tp2.show}, canConstrain=$canConstrain, isSoft=$isSoft)", subtyping, show = true) /*<|<*/ {
     if (tp1 eq tp2) tp1
     else if (!tp1.exists) tp1
     else if (!tp2.exists) tp2
@@ -2073,8 +2074,8 @@ class TypeComparer(@constructorOnly initctx: Context) extends ConstraintHandling
         def widen(tp: Type) = if (widenInUnions) tp.widen else tp.widenIfUnstable
         val tp1w = widen(tp1)
         val tp2w = widen(tp2)
-        if ((tp1 ne tp1w) || (tp2 ne tp2w)) lub(tp1w, tp2w, canConstrain)
-        else orType(tp1w, tp2w) // no need to check subtypes again
+        if ((tp1 ne tp1w) || (tp2 ne tp2w)) lub(tp1w, tp2w, canConstrain = canConstrain, isSoft = isSoft)
+        else orType(tp1w, tp2w, isSoft = isSoft) // no need to check subtypes again
       }
       mergedLub(tp1.stripLazyRef, tp2.stripLazyRef)
   }
@@ -2183,11 +2184,11 @@ class TypeComparer(@constructorOnly initctx: Context) extends ConstraintHandling
       case tp2 @ OrType(tp21, tp22) =>
         val higher1 = mergeIfSuper(tp1, tp21, canConstrain)
         if (higher1 eq tp21) tp2
-        else if (higher1.exists) higher1 | tp22
+        else if (higher1.exists) lub(higher1, tp22, isSoft = tp2.isSoft)
         else {
           val higher2 = mergeIfSuper(tp1, tp22, canConstrain)
           if (higher2 eq tp22) tp2
-          else if (higher2.exists) tp21 | higher2
+          else if (higher2.exists) lub(tp21, higher2, isSoft = tp2.isSoft)
           else NoType
         }
       case _ =>
@@ -2235,17 +2236,18 @@ class TypeComparer(@constructorOnly initctx: Context) extends ConstraintHandling
    *  ExprType, LambdaType). Also, when forming an `|`,
    *  instantiated TypeVars are dereferenced and annotations are stripped.
    *
+   *  @param isSoft   If the result is a union, this determines whether it's a soft union.
    *  @param isErased Apply erasure semantics. If erased is true, instead of creating
    *                  an OrType, the lub will be computed using TypeCreator#erasedLub.
    */
-  final def orType(tp1: Type, tp2: Type, isErased: Boolean = ctx.erasedTypes): Type = {
-    val t1 = distributeOr(tp1, tp2)
+  final def orType(tp1: Type, tp2: Type, isSoft: Boolean = true, isErased: Boolean = ctx.erasedTypes): Type = {
+    val t1 = distributeOr(tp1, tp2, isSoft)
     if (t1.exists) t1
     else {
-      val t2 = distributeOr(tp2, tp1)
+      val t2 = distributeOr(tp2, tp1, isSoft)
       if (t2.exists) t2
       else if (isErased) erasedLub(tp1, tp2)
-      else liftIfHK(tp1, tp2, OrType(_, _, soft = true), _ | _, _ & _)
+      else liftIfHK(tp1, tp2, OrType(_, _, soft = isSoft), _ | _, _ & _)
     }
   }
 
@@ -2333,18 +2335,18 @@ class TypeComparer(@constructorOnly initctx: Context) extends ConstraintHandling
    *
    *  The rhs is a proper supertype of the lhs.
    */
-  private def distributeOr(tp1: Type, tp2: Type): Type = tp1 match {
+  private def distributeOr(tp1: Type, tp2: Type, isSoft: Boolean = true): Type = tp1 match {
     case ExprType(rt1) =>
       tp2 match {
         case ExprType(rt2) =>
-          ExprType(rt1 | rt2)
+          ExprType(lub(rt1, rt2, isSoft = isSoft))
         case _ =>
           NoType
       }
     case tp1: TypeVar if tp1.isInstantiated =>
-      tp1.underlying | tp2
+      lub(tp1.underlying, tp2, isSoft = isSoft)
     case tp1: AnnotatedType if !tp1.isRefining =>
-      tp1.underlying | tp2
+      lub(tp1.underlying, tp2, isSoft = isSoft)
     case _ =>
       NoType
   }
@@ -2699,8 +2701,8 @@ object TypeComparer {
   def matchingMethodParams(tp1: MethodType, tp2: MethodType)(using Context): Boolean =
     comparing(_.matchingMethodParams(tp1, tp2))
 
-  def lub(tp1: Type, tp2: Type, canConstrain: Boolean = false)(using Context): Type =
-    comparing(_.lub(tp1, tp2, canConstrain))
+  def lub(tp1: Type, tp2: Type, canConstrain: Boolean = false, isSoft: Boolean = true)(using Context): Type =
+    comparing(_.lub(tp1, tp2, canConstrain = canConstrain, isSoft = isSoft))
 
   /** The least upper bound of a list of types */
   final def lub(tps: List[Type])(using Context): Type =
@@ -2716,8 +2718,8 @@ object TypeComparer {
   def glb(tps: List[Type])(using Context): Type =
     tps.foldLeft(defn.AnyType: Type)(glb)
 
-  def orType(using Context)(tp1: Type, tp2: Type, isErased: Boolean = ctx.erasedTypes): Type =
-    comparing(_.orType(tp1, tp2, isErased))
+  def orType(using Context)(tp1: Type, tp2: Type, isSoft: Boolean = true, isErased: Boolean = ctx.erasedTypes): Type =
+    comparing(_.orType(tp1, tp2, isSoft = isSoft, isErased = isErased))
 
   def andType(using Context)(tp1: Type, tp2: Type, isErased: Boolean = ctx.erasedTypes): Type =
     comparing(_.andType(tp1, tp2, isErased))
@@ -2946,9 +2948,9 @@ class ExplainingTypeComparer(initctx: Context) extends TypeComparer(initctx) {
       super.hasMatchingMember(name, tp1, tp2)
     }
 
-  override def lub(tp1: Type, tp2: Type, canConstrain: Boolean = false): Type =
-    traceIndented(s"lub(${show(tp1)}, ${show(tp2)}, canConstrain=$canConstrain)") {
-      super.lub(tp1, tp2, canConstrain)
+  override def lub(tp1: Type, tp2: Type, canConstrain: Boolean, isSoft: Boolean): Type =
+    traceIndented(s"lub(${show(tp1)}, ${show(tp2)}, canConstrain=$canConstrain, isSoft=$isSoft)") {
+      super.lub(tp1, tp2, canConstrain, isSoft)
     }
 
   override def glb(tp1: Type, tp2: Type): Type =
diff --git a/tests/pos/preserve-union.scala b/tests/pos/preserve-union.scala
new file mode 100644
index 000000000000..a56fcbef1b84
--- /dev/null
+++ b/tests/pos/preserve-union.scala
@@ -0,0 +1,7 @@
+class A {
+  val a: Int | String = 1
+  val b: AnyVal = 2
+
+  val c = List(a, b)
+  val c1: List[AnyVal | String] = c
+}