Core Lint errors : in result of Static argument

Causes a Core Lint error:

{-# Language DeriveAnyClass #-}
{-# Language DeriveGeneric  #-}
{-# Language DerivingVia    #-}
{-# Language TypeFamilies   #-}

{-# Options_GHC -O2 -fstatic-argument-transformation -dcore-lint -fobject-code #-}

import Data.Distributive
import Data.Functor.Rep
import GHC.Generics

data Moore a b = Moore b (a -> Moore a b)
  deriving
  stock Generic1

  deriving (Functor, Applicative, Monad)
  via Co (Moore a)

instance Representable (Moore a) where
  type Rep (Moore a) = [a]
  index = undefined
  tabulate = undefined

instance Distributive (Moore a) where
  distribute = distributeRep

    Mismatch in type between binder and occurrence
    Var: $cfmap_s71F
    Binder type: forall a a b.
                 (a_a5LM -> b_a5LN)
                 -> Co (Moore a_a5LI) a_a5LM -> Moore a_a5LI b_a5LN
    Occurrence type: forall a a b.
                     (a -> b) -> Co (Moore a) a -> Moore a b
      Before subst: forall a a b.
                    (a -> b) -> Co (Moore a) a -> Moore a b
    In the RHS of $cfmap_s71F :: forall a a b.
                                 (a -> b) -> Co (Moore a) a -> Moore a b

Using the adjunctions package, using ghc 8.10.2.log