-XPolyKinds causes "*** Exception: Prelude.(!!): index too large"

The following program will compile fine:

{-# OPTIONS_GHC -Wall #-}
{-# Language DeriveFunctor #-}
--{-# Language PolyKinds #-}

module Bug where

data V a = V [a] deriving Functor

data C x a = C (V (P x a)) deriving Functor

data P x a = P (x a) deriving Functor

But when PolyKinds is enabled, GHC crashes with

$ ghc Bug.hs 
[1 of 1] Compiling Bug              ( Bug.hs, Bug.o )

Bug.hs:9:37:ghc: panic! (the 'impossible' happened)
  (GHC version 7.8.0.20140228 for x86_64-unknown-linux):
	Prelude.(!!): index too large

Trac metadata

Trac field	Value
Version	7.8.1-rc2
Type	Bug
TypeOfFailure	OtherFailure
Priority	normal
Resolution	Unresolved
Component	Compiler
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