haskell 98 program does not typecheck when compiled with -XTypeFamilies

Consider the following valid Haskell 98 function:

f x =
  do let apply p r = mapM p (r x)
     a <- apply id     fst
     b <- apply return snd
     return (a ++ b)

It compiles fine with both ghc 6.12.x and ghc 7. However, if I add the -XTypeFamilies flag to ghc 7 it is rejected with:

mono.hs:5:17:
    Occurs check: cannot construct the infinite type: a0 = m0 a0
    Expected type: m0 a0 -> m0 a0
      Actual type: m0 a0 -> m0 (m0 a0)
    In the first argument of `apply', namely `return'
    In a stmt of a 'do' expression: b <- apply return snd

If one adds a type signature, the error message gets more intimidating.

A project of mine uses Type Families in some modules so TypeFamilies is listed as an extension in cabal's configuration file; therefore, it is being passed to every module. That is how I stumbled upon this problem.

Trac metadata

Trac field	Value
Version	7.0.2
Type	Bug
TypeOfFailure	OtherFailure
Priority	normal
Resolution	Unresolved
Component	Compiler (Type checker)
Test case
Differential revisions
BlockedBy
Related
Blocking
CC
Operating system
Architecture