I'm not 100% sure this is a bug, but it's certainly surprising. If I add an unused function to my module:

#ifdef FOO
rigidTests :: Maybe (Maybe [YesNo])
rigidTests =
 mkTest [Elem "No"  []] (Just [No])
#endif

(mkTest has a type signature, and all the datatypes are plain old Haskell 98) then the behaviour of the program changes:

Without the function:

$ tar -zxf unused_bind_bug.tar.gz
$ cd unused_bind_bug
$ ghc -cpp --make Main
[1 of 6] Compiling SYBWC.Context    ( SYBWC/Context.hs, SYBWC/Context.o )
[2 of 6] Compiling SYBWC.Basics     ( SYBWC/Basics.hs, SYBWC/Basics.o )
[3 of 6] Compiling SYBWC.Instances  ( SYBWC/Instances.hs, SYBWC/Instances.o )
[4 of 6] Compiling State            ( State.hs, State.o )
[5 of 6] Compiling Xml              ( Xml.hs, Xml.o )
[6 of 6] Compiling Main             ( Main.hs, Main.o )
Linking Main ...
$ ./Main
Nothing

With the function:

$ tar -zxf unused_bind_bug.tar.gz
$ cd unused_bind_bug
$ ghc -cpp -DFOO --make Main
[1 of 6] Compiling SYBWC.Context    ( SYBWC/Context.hs, SYBWC/Context.o )
[2 of 6] Compiling SYBWC.Basics     ( SYBWC/Basics.hs, SYBWC/Basics.o )
[3 of 6] Compiling SYBWC.Instances  ( SYBWC/Instances.hs, SYBWC/Instances.o )
[4 of 6] Compiling State            ( State.hs, State.o )
[5 of 6] Compiling Xml              ( Xml.hs, Xml.o )
[6 of 6] Compiling Main             ( Main.hs, Main.o )
Linking Main ...
$ ./Main
Stack space overflow: current size 8388608 bytes.
Use `+RTS -Ksize' to increase it.

I suspect that the stack overflow is caused by my

instance (Xml a, Xml [a]) => Xml [a] where

hack to get around #1470 (closed) (and if so, that bug is more important to me).

This is with

$ ghc --version
The Glorious Glasgow Haskell Compilation System, version 6.8.0.20070923

but I had the same problem with 6.6.1.

Standalone testcase attached.