Associated data type doesn't infer context

The following code fails to compile:

class Eq a => Bar a where
  bar :: a -> Int

class Bar (Baz a) => Foo a where
  data Baz a :: *
  foo :: Baz a -> Baz a

data Bang a = Bang (Baz a) deriving Eq

The error message is

test.hs:8:36:
    No instance for (Eq (Baz a))
      arising from the 'deriving' clause of a data type declaration
                   at test.hs:8:36-37
    Possible fix: add an instance declaration for (Eq (Baz a))
    When deriving the instance for (Eq (Bang a))

If I add a context of Foo a to Bang, it compiles, but since Baz is only defined on instances of Foo, shouldn't GHC be able to figure out that Baz a always has an Eq instance?

In any case, the error message is misleading, since there already is a context for Baz a

Trac metadata

Trac field	Value
Version	6.8.3
Type	Bug
TypeOfFailure	OtherFailure
Priority	normal
Resolution	Unresolved
Component	Compiler
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