A poly-kinded newtype existential crisis

The following code worked on older GHCs and on other compilers clear back to Hugs, but based on reports I'm getting from a half-dozen users appears to broken on GHC 7.6.1+ and in GHC HEAD.

class Reifies s a | s -> a where
  reflect :: proxy s -> a

data Proxy a = Proxy

newtype Magic a r = Magic (forall s. Reifies s a => Proxy s -> r)

fast/Data/Reflection.hs:92:21:
    A newtype constructor cannot have an existential context,
      but `Magic' does
    In the definition of data constructor `Magic'

There doesn't appear to be anything existential going on there, but that said, this issue does only occur when PolyKinds are turned on, so perhaps the issue is with the desugaring into PolyKinds?

Trac metadata

Trac field	Value
Version	7.6.3
Type	Bug
TypeOfFailure	OtherFailure
Priority	normal
Resolution	Unresolved
Component	Compiler
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