Strange Behavior with QuanitifiedConstraints, DerivingStrategies, and GND

Summary

Code that should compile whilst using a newtype deriving strategy fails to compile unless using Standalone deriving.

Steps to reproduce

The following program fails to compile:

{-# LANGUAGE DerivingStrategies #-}
{-# LANGUAGE FlexibleContexts #-}
{-# LANGUAGE FlexibleInstances #-}
{-# LANGUAGE GeneralizedNewtypeDeriving #-}
{-# LANGUAGE MonoLocalBinds #-}
{-# LANGUAGE QuantifiedConstraints #-}
{-# LANGUAGE StandaloneDeriving #-}
module Main where

import Control.Monad.Reader
import Data.Coerce

class (forall a b. Coercible a b => Coercible (f a) (f b)) => CoerceRole f
instance (forall a b. Coercible a b => Coercible (f a) (f b)) => CoerceRole f

data Env = Env
data Message = Message

class Run a where
  run :: forall m. (MonadReader Env m, CoerceRole m) => Message -> a -> m a

data Inner = Inner

instance Run Inner where
  run _ = pure

newtype Wrapper = Wrapper Inner
  deriving newtype Run

-- deriving newtype instance Run Wrapper

main :: IO ()
main = pure ()

The observed error is:

/private/tmp/CoerceBug/app/Main.hs:28:20-22: error:
    • Couldn't match representation of type ‘m Inner’
                               with that of ‘m Wrapper’
        arising from the coercion of the method ‘run’
          from type ‘forall (m :: * -> *).
                     (MonadReader Env m, CoerceRole m) =>
                     Message -> Inner -> m Inner’
            to type ‘forall (m :: * -> *).
                     (MonadReader Env m, CoerceRole m) =>
                     Message -> Wrapper -> m Wrapper’
      NB: We cannot know what roles the parameters to ‘m’ have;
        we must assume that the role is nominal
    • When deriving the instance for (Run Wrapper)
   |
28 |   deriving newtype Run
   |                    ^^^

However, commenting out deriving newtype Run and uncommenting deriving newtype instance Run Wrapper will cause compilation to succeed.

Expected behavior

Both programs should be considered valid programs.

Environment

• GHC version used: ghc-8.10.7

Optional:

• Operating System: macOS 11.6
• System Architecture: x86_64