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If I say

{-# LANGUAGE MultiParamTypeClasses, FlexibleContexts #-}

module Bug where

class C a b where
  op :: a -> b -> ()

-- foo :: (C a Integer) => a -> ()
foo x = op x 3

then GHC complains that the variable b0 in the type of foo is ambiguous, because it tries to produce C a b => a -> () as the type of foo. Instead, it shouldn't quantify b, letting it default to Integer.

The solution is to use oclose instead of growThetaTyVars in decideQuantifiedTyVars. This will respect functional dependencies, quantifying over b only when a fundep exists from a to b.

I will fix in ongoing work (in the wip/derived-refactor branch).