Infinite typechecker loop in GHC 8.6

The following program loops infinitely during typechecking with GHC 8.6.1 and HEAD:

{-# LANGUAGE TypeFamilies #-}
{-# LANGUAGE TypeInType #-}
{-# LANGUAGE TypeOperators #-}
module Bug where

import Data.Kind

class Generic a where
  type Rep a :: Type

class PGeneric a where
  type To a (x :: Rep a) :: a

type family MDefault (x :: a) :: a where
  MDefault x = To (M x)

class C a where
  type M (x :: a) :: a
  type M (x :: a) = MDefault x

In GHC 8.4.3, however this fails with a proper error:

$ /opt/ghc/8.4.3/bin/ghc Bug.hs
[1 of 1] Compiling Bug              ( Bug.hs, Bug.o )

Bug.hs:15:16: error:
    • Occurs check: cannot construct the infinite kind:
        a ~ Rep (M x) -> M x
    • In the type ‘To (M x)’
      In the type family declaration for ‘MDefault’
    • Type variable kinds: x :: a
   |
15 |   MDefault x = To (M x)
   |                ^^^^^^^^

Trac metadata

Trac field	Value
Version	8.4.3
Type	Bug
TypeOfFailure	OtherFailure
Priority	high
Resolution	Unresolved
Component	Compiler (Type checker)
Test case
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Operating system
Architecture