Here's what I did in GHCi to trigger the panic:

$ inplace/bin/ghc-stage2 --interactive
GHCi, version 8.1.20160101: http://www.haskell.org/ghc/  :? for help
λ> :set -XDataKinds
λ> :m Data.Typeable Data.Functor.Compose
λ> typeOf (Proxy :: Proxy 'Compose)
ghc-stage2: panic! (the 'impossible' happened)
  (GHC version 8.1.20160101 for x86_64-unknown-linux):
        piResultTy
  *
  TYPE 'Lifted *

Please report this as a GHC bug:  http://www.haskell.org/ghc/reportabug

Enabling -XPolyKinds doesn't trigger the error, though; #10343 (closed) will be triggered instead:

λ> :set -XPolyKinds
λ> typeOf (Proxy :: Proxy 'Compose)

<interactive>:5:1: error:
    • No instance for (Typeable a0) arising from a use of ‘typeOf’
    • In the expression: typeOf (Proxy :: Proxy Compose)
      In an equation for ‘it’: it = typeOf (Proxy :: Proxy Compose)