GeneralizedNewtypeDeriving should support classes with ambiguous types

The following module has a class with an ambiguous type:

{-# LANGUAGE AllowAmbiguousTypes #-}
{-# LANGUAGE GeneralizedNewtypeDeriving #-}
module Ambig where

class C a where
  c :: Int

data A = A

instance C A where c = 5

newtype B = B A deriving C

Thanks to TypeApplications, this typeclass is still usable. However, GeneralizedNewtypeDeriving fails on it:

Ambig.hs:12:26: error:
    • Ambiguous type variable ‘a0’ arising from a use of ‘c’
      prevents the constraint ‘(C a0)’ from being solved.
      Probable fix: use a type annotation to specify what ‘a0’ should be.
      These potential instances exist:
        instance C A -- Defined at Ambig.hs:10:10
        instance C B -- Defined at Ambig.hs:12:26
    • In the third argument of ‘GHC.Prim.coerce’, namely ‘c’
      In the expression: GHC.Prim.coerce @(Int) @(Int) c
      In an equation for ‘c’: c = GHC.Prim.coerce @(Int) @(Int) c
      When typechecking the code for ‘c’
        in a derived instance for ‘C B’:
        To see the code I am typechecking, use -ddump-deriv
   |
12 | newtype B = B A deriving C
   |        

It shouldn't.

Trac metadata

Trac field	Value
Version	8.6.1
Type	Bug
TypeOfFailure	OtherFailure
Priority	normal
Resolution	Unresolved
Component	Compiler
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