GHC 8.2.1 regression when combining GND with TypeError (solveDerivEqns: probable loop)

This code panics on GHC 8.2.1 and later:

{-# LANGUAGE DataKinds #-}
{-# LANGUAGE GeneralizedNewtypeDeriving #-}
{-# LANGUAGE UndecidableInstances #-}
module Bug where

import GHC.TypeLits

newtype Baz = Baz Foo
  deriving Bar

newtype Foo = Foo Int

class Bar a where
  bar :: a

instance (TypeError (Text "Boo")) => Bar Foo where
  bar = undefined

$ /opt/ghc/8.2.1/bin/ghci Bug.hs
GHCi, version 8.2.1: http://www.haskell.org/ghc/  :? for help
Loaded GHCi configuration from /home/rgscott/.ghci
[1 of 1] Compiling Bug              ( Bug.hs, interpreted )
ghc: panic! (the 'impossible' happened)
  (GHC version 8.2.1 for x86_64-unknown-linux):
        solveDerivEqns: probable loop
  DerivSpec
    ds_loc       = Bug.hs:9:12-14
    ds_name      = $fBarBaz
    ds_tvs       = []
    ds_cls       = Bar
    ds_tys       = [Baz]
    ds_theta     = [ThetaOrigin
                      to_tvs            = []
                      to_givens         = []
                      to_wanted_origins = [Bar Foo, (Foo :: *) ~R# (Baz :: *)]]
    ds_mechanism = newtype
  [[s0_a1D7[fuv:0]]]
  Call stack:
      CallStack (from HasCallStack):
        prettyCurrentCallStack, called at compiler/utils/Outputable.hs:1133:58 in ghc:Outputable
        callStackDoc, called at compiler/utils/Outputable.hs:1137:37 in ghc:Outputable
        pprPanic, called at compiler/typecheck/TcDerivInfer.hs:515:9 in ghc:TcDerivInfer

This is a regression since GHC 8.0.2, in which it does compile successfully.

Trac metadata

Trac field	Value
Version	8.2.1
Type	Bug
TypeOfFailure	OtherFailure
Priority	high
Resolution	Unresolved
Component	Compiler (Type checker)
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