I was perplexed about why an arity-related WARN was tripping. It took 
me _day_ (sigh) to find that it was because SimplEnv.substExpr was taking
a short cut when the substitution was empty, thereby not subsituting for
Ids in scope, which must be done (CoreSubst Note [Extending the Subst]).

The fix is a matter of deleting the "optimisation".  Same with
CoreSubst.substSpec, although I don't know if that actually caused a
probem.