diff --git a/compiler/src/dotty/tools/dotc/core/tasty/TreeUnpickler.scala b/compiler/src/dotty/tools/dotc/core/tasty/TreeUnpickler.scala
index 6dca21f68b26..ddf3ef7ed765 100644
--- a/compiler/src/dotty/tools/dotc/core/tasty/TreeUnpickler.scala
+++ b/compiler/src/dotty/tools/dotc/core/tasty/TreeUnpickler.scala
@@ -1142,14 +1142,10 @@ class TreeUnpickler(reader: TastyReader,
       val splice = splices(idx)
       val reifiedArgs = args.map(arg => if (arg.isTerm) new TreeExpr(arg) else new TreeType(arg))
       if (isType) {
-        val quotedType =
-          if (reifiedArgs.isEmpty) splice.asInstanceOf[quoted.Type[_]]
-          else splice.asInstanceOf[Seq[Any] => quoted.Type[_]](reifiedArgs)
+        val quotedType = splice.asInstanceOf[Seq[Any] => quoted.Type[_]](reifiedArgs)
         PickledQuotes.quotedTypeToTree(quotedType)
       } else {
-        val quotedExpr =
-          if (reifiedArgs.isEmpty) splice.asInstanceOf[quoted.Expr[_]]
-          else splice.asInstanceOf[Seq[Any] => quoted.Expr[_]](reifiedArgs)
+        val quotedExpr = splice.asInstanceOf[Seq[Any] => quoted.Expr[_]](reifiedArgs)
         PickledQuotes.quotedExprToTree(quotedExpr)
       }
     }
diff --git a/compiler/src/dotty/tools/dotc/transform/ReifyQuotes.scala b/compiler/src/dotty/tools/dotc/transform/ReifyQuotes.scala
index ae6cb049ef4f..32149a6ddaba 100644
--- a/compiler/src/dotty/tools/dotc/transform/ReifyQuotes.scala
+++ b/compiler/src/dotty/tools/dotc/transform/ReifyQuotes.scala
@@ -32,7 +32,6 @@ import dotty.tools.dotc.core.quoted._
  *      val x2 = ???
  *      ...
  *      ~{ ... '{ ... x1 ... x2 ...} ... }
- *      ~{ ... /* no references to xi */ ... }
  *      ...
  *    }
  *    ```
@@ -45,7 +44,6 @@ import dotty.tools.dotc.core.quoted._
  *         val x2 = ???
  *         ...
  *         Hole(0 | x1, x2)
- *         Hole(1 | )
  *         ...
  *       ]],
  *       List(
@@ -54,8 +52,7 @@ import dotty.tools.dotc.core.quoted._
  *           val x2$1 = args(1).asInstanceOf[Expr[T]] // can be asInstanceOf[Type[T]]
  *           ...
  *           { ... '{ ... x1$1.unary_~ ... x2$1.unary_~ ...} ... }
- *         },
- *         { ... /* no references to xi */ ... } // optimized to not create lambda
+ *         }
  *       )
  *     )
  *    ```
@@ -69,12 +66,12 @@ import dotty.tools.dotc.core.quoted._
  *    ```
  *  to
  *    ```
- *    inline def foo[T1, ...](inline x1: X, ..., y1: Y, ....): Object = { (args: Seq[Any]) => {
+ *    inline def foo[T1, ...](inline x1: X, ..., y1: Y, ....): Seq[Any] => Object = { (args: Seq[Any]) => {
  *      val T1$1 = args(0).asInstanceOf[Type[T1]]
  *      ...
- *      val x1$1 = args(..).asInstanceOf[X]
+ *      val x1$1 = args(0).asInstanceOf[X]
  *      ...
- *      val y1$1 = args(..).asInstanceOf[Expr[Y]]
+ *      val y1$1 = args(1).asInstanceOf[Expr[Y]]
  *      ...
  *      { ... T1$1.unary_~ ... x ... '(y1$1.unary_~) ... }
  *    }
@@ -448,8 +445,6 @@ class ReifyQuotes extends MacroTransformWithImplicits with InfoTransformer {
      *       val y$1 = args(1).asInstanceOf[Expr[Any]] // or .asInstanceOf[Type[Any]]
      *       { ... '{ ... x$1.unary_~ ... y$1.unary_~ ... } ... }
      *     }
-     *  or if the spliced subexpression has no captures it will be transformed to
-     *    { ... '{ ... x$1.unary_~ ... y$1.unary_~ ... } ... }
      *
      *  See: `capture`
      *
@@ -462,19 +457,6 @@ class ReifyQuotes extends MacroTransformWithImplicits with InfoTransformer {
      *      }
      */
     private def makeLambda(tree: Tree)(implicit ctx: Context): Tree = {
-      var treeWithoutCaptures: Tree = null
-      def transformWithCapturer(tree: Tree)(capturer: mutable.Map[Symbol, Tree] => Tree => Tree)(implicit ctx: Context): Tree = {
-        val captured = mutable.LinkedHashMap.empty[Symbol, Tree]
-        val captured2 = capturer(captured)
-        outer.enteredSyms.foreach(s => capturers.put(s, captured2))
-        if (ctx.owner.owner.is(Macro))
-          outer.enteredSyms.reverse.foreach(s => captured2(ref(s)))
-        val tree2 = transform(tree)
-        capturers --= outer.enteredSyms
-        if (captured.isEmpty)
-          treeWithoutCaptures = tree2
-        seq(captured.result().valuesIterator.toList, tree2)
-      }
       def body(arg: Tree)(implicit ctx: Context): Tree = {
         var i = 0
         transformWithCapturer(tree)(
@@ -502,10 +484,18 @@ class ReifyQuotes extends MacroTransformWithImplicits with InfoTransformer {
       val lambdaOwner = ctx.owner.ownersIterator.find(o => levelOf.getOrElse(o, level) == level).get
       val tpe = MethodType(defn.SeqType.appliedTo(defn.AnyType) :: Nil, tree.tpe.widen)
       val meth = ctx.newSymbol(lambdaOwner, UniqueName.fresh(nme.ANON_FUN), Synthetic | Method, tpe)
-      val closure = Closure(meth, tss => body(tss.head.head)(ctx.withOwner(meth)).changeOwner(ctx.owner, meth))
+      Closure(meth, tss => body(tss.head.head)(ctx.withOwner(meth)).changeOwner(ctx.owner, meth))
+    }
 
-      if (treeWithoutCaptures == null || ctx.owner.is(Macro)) closure
-      else treeWithoutCaptures
+    private def transformWithCapturer(tree: Tree)(capturer: mutable.Map[Symbol, Tree] => Tree => Tree)(implicit ctx: Context): Tree = {
+      val captured = mutable.LinkedHashMap.empty[Symbol, Tree]
+      val captured2 = capturer(captured)
+      outer.enteredSyms.foreach(s => capturers.put(s, captured2))
+      if (ctx.owner.owner.is(Macro))
+        outer.enteredSyms.reverse.foreach(s => captured2(ref(s)))
+      val tree2 = transform(tree)
+      capturers --= outer.enteredSyms
+      seq(captured.result().valuesIterator.toList, tree2)
     }
 
     /** Returns true if this tree will be captured by `makeLambda` */
diff --git a/tests/pos/i4380a.scala b/tests/pos/i4380a.scala
new file mode 100644
index 000000000000..fefd5cc8b0f0
--- /dev/null
+++ b/tests/pos/i4380a.scala
@@ -0,0 +1,23 @@
+import scala.quoted._
+
+object Test {
+
+  trait Producer[A] { self =>
+    def step(k: (A => Expr[Unit])): Expr[Unit]
+  }
+
+  trait Foo[A]
+  case class Bar[A, B](producer: Producer[B], nestedf: B => Expr[Unit]) extends Foo[A]
+
+  def meth[A](stream: Foo[Expr[A]]): Producer[Expr[A]] = {
+    stream match {
+      case Bar(producer, nestedf) => {
+        new Producer[Expr[A]] {
+          def step(k: Expr[A] => Expr[Unit]): Expr[Unit] = '{
+            val adv: Unit => Unit = { _ => ~producer.step((el) => nestedf(el))}
+          }
+        }
+      }
+    }
+  }
+}
diff --git a/tests/pos/i4380b.scala b/tests/pos/i4380b.scala
new file mode 100644
index 000000000000..b305780e0843
--- /dev/null
+++ b/tests/pos/i4380b.scala
@@ -0,0 +1,8 @@
+import scala.quoted._
+
+object Test {
+  def step(k: (String => Expr[Unit])): Expr[Unit] = '()
+  def meth(): Unit = '{
+    (i: Int) => ~step(el => '() )
+  }
+}