in_scope ASSERT failure when desugaring GADT record update

The following module causes an ASSERT failure on HEAD:

{-# LANGUAGE GADTs #-}
{-# LANGUAGE PolyKinds #-}
{-# LANGUAGE ScopedTypeVariables #-}
{-# LANGUAGE StandaloneKindSignatures #-}

module RepPolyGADTRecordUpdate where

import Data.Kind
import GHC.Exts

type X :: TYPE rep -> Type
data X a where
  MkX :: { fld1 :: a, fld2 :: Int } -> X a

upd :: forall rep (a :: TYPE rep). X a -> X a
upd x = x { fld2 = 3 }

ghc: panic! (the 'impossible' happened)
  GHC version 9.3.20210824:
       ASSERT failed!
  in_scope InScope {rep_azw a_azx}
  tenv [aiR :-> a_azx, awI :-> rep_azw]
  cenv []
  tys [rep_awI ~# 'BoxedRep 'Lifted, a_aiR ~# a_X0]
  cos []
  needInScope {a_X0}
  Call stack:
      CallStack (from HasCallStack):
        assertPpr, called at compiler/GHC/Core/TyCo/Subst.hs:<line>:<column> in <package-id>:GHC.Core.TyCo.Subst
        checkValidSubst, called at compiler/GHC/Core/TyCo/Subst.hs:<line>:<column> in <package-id>:GHC.Core.TyCo.Subst
        substTys, called at compiler/GHC/Core/TyCo/Subst.hs:<line>:<column> in <package-id>:GHC.Core.TyCo.Subst
        substTheta, called at compiler/GHC/HsToCore/Expr.hs:<line>:<column> in <package-id>:GHC.HsToCore.Expr

The callstack indicates that this happens in a call to substTheta in the RecordUpd case of GHC.HsToCore.Expr.dsExpr, which indeed desugars GADT record upates.