diff --git a/compiler/src/dotty/tools/dotc/transform/ReifyQuotes.scala b/compiler/src/dotty/tools/dotc/transform/ReifyQuotes.scala
index 479e3e0fad5e..ae9d63c3c222 100644
--- a/compiler/src/dotty/tools/dotc/transform/ReifyQuotes.scala
+++ b/compiler/src/dotty/tools/dotc/transform/ReifyQuotes.scala
@@ -245,7 +245,7 @@ class ReifyQuotes extends MacroTransformWithImplicits with InfoTransformer {
         l == level ||
         sym.is(Inline) && sym.owner.is(Macro) && sym.info.isValueType && l - 1 == level
       case None =>
-        level == 0
+        !sym.is(Param) || levelOK(sym.owner)
     }
 
     /** Issue a "splice outside quote" error unless we ar in the body of an inline method */
diff --git a/tests/pos/i4396a.scala b/tests/pos/i4396a.scala
new file mode 100644
index 000000000000..0a69f685f986
--- /dev/null
+++ b/tests/pos/i4396a.scala
@@ -0,0 +1,3 @@
+class Test {
+  '(Option(4) match { case Some(a) => a; case None => 1 })
+}
\ No newline at end of file
diff --git a/tests/pos/i4396b.scala b/tests/pos/i4396b.scala
new file mode 100644
index 000000000000..ec327cfa61c1
--- /dev/null
+++ b/tests/pos/i4396b.scala
@@ -0,0 +1,3 @@
+class Test {
+  '{ case class Foo() }
+}
\ No newline at end of file