QuantifiedConstraints: Odd superclass constraint

This code works

{-# Language QuantifiedConstraints, RankNTypes, PolyKinds, ConstraintKinds, UndecidableInstances #-}

import Data.Semigroup

newtype Free cls a = Free ()

instance (forall xx. cls xx => Semigroup xx) => Semigroup (Free cls a) where
  (<>)    = undefined 
  stimes  = undefined
  sconcat = undefined

-- instance (forall xx. cls xx => Semigroup xx) => Monoid (Free cls a) where
--   mempty = undefined 

but uncomment the Monoid instance and we get

$ ghci -ignore-dot-ghci /tmp/I.hs
GHCi, version 8.5.20180128: http://www.haskell.org/ghc/  :? for help
[1 of 1] Compiling Main             ( /tmp/I.hs, interpreted )

/tmp/I.hs:12:10: error:
    • Could not deduce: cls (Free cls a)
        arising from the superclasses of an instance declaration
      from the context: forall xx. cls xx => Semigroup xx
        bound by the instance declaration at /tmp/I.hs:12:10-67
    • In the instance declaration for ‘Monoid (Free cls a)’
   |
12 | instance (forall xx. cls xx => Semigroup xx) => Monoid (Free cls a) where
   |          ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Failed, no modules loaded.
Prelude> 

Is this correct behavior?

Trac metadata

Trac field	Value
Version	8.5
Type	Bug
TypeOfFailure	OtherFailure
Priority	normal
Resolution	Unresolved
Component	Compiler
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