Core lint error in result of Specialise for TEST=T3220 WAY=optasm

This is the code:

{-# LANGUAGE TypeFamilies, ScopedTypeVariables#-}

module T3220 where

class Foo m where
    type Bar m :: *
    action :: m -> Bar m -> m

right x m = action m (Right x)

right' :: (Either a b ~ Bar m, Foo m) => b -> m -> m
right' x m = action m (Right x)

instance Foo Int where
    type Bar Int = Either Int Int
    action m a = either (*) (+) a m

instance Foo Float where
    type Bar Float = Either Float Float
    action m a = either (*) (+) a m

foo = print $ right (1::Int) (3 :: Int)
bar = print $ right (1::Float) (3 :: Float)

Invocation:

$ ghc-8.0.1 T3220.hs -O -dcore-lint

[1 of 1] Compiling T3220            ( T3220.hs, T3220.o )
*** Core Lint errors : in result of Specialise ***
<no location info>: warning:
    In the expression: action
                         @ Float
                         $fFooFloat
                         m_ayb
                         ((Right @ Float @ Float x_aya)
                          `cast` (Sub (Sym cobox_aUe) :: Either a_aU3 b_aU4 ~R# Bar m_aU1))
    cobox_aUe :: Bar m_aU1 ~# Either a_aU3 b_aU4
    [LclId[CoVarId], Str=DmdType] is out of scope

Interestingly, with HEAD (2aee4196), it hits an assert from #11371.

=====> T3220(profasm) 12 of 21 [0, 11, 0] 
cd ./indexed-types/should_compile &&  "/home/thomas/ghc-validate/inplace/test   spaces/ghc-stage2" -c T3220.hs -fforce-recomp -dcore-lint -dcmm-lint -dno-debug-output -no-user-package-db -rtsopts -fno-warn-tabs -fno-warn-missed-specialisations -fno-ghci-history  -O -prof -static -auto-all  > T3220.comp.stderr 2>&1
Compile failed (status 256) errors were:
ghc-stage2: panic! (the 'impossible' happened)
  (GHC version 8.1.20160221 for x86_64-unknown-linux):
        ASSERT failed!
  CallStack (from HasCallStack):
  assertPprPanic, called at compiler/types/TyCoRep.hs:1942:51 in ghc:TyCoRep
  checkValidSubst, called at compiler/types/TyCoRep.hs:2076:17 in ghc:TyCoRep
  substCo, called at compiler/coreSyn/CoreSubst.hs:605:20 in ghc:CoreSubst
  in_scope InScope {x_axS m_axT $caction_a1dp $caction_a1dR right
                    right' foo bar $tcFoo $tc'C:Foo $fFooFloat $fFooInt $trModule
                    a_s1fZ a_s1g0 a_s1g1 a_s1g2}
  tenv [aTT :-> Float, aTV :-> Float, aTW :-> Float]
  cenv []
  tys []
  cos [Sub (Sym cobox_aU6)]
  needInScope [aU6 :-> cobox_aU6]

Please report this as a GHC bug:  http://www.haskell.org/ghc/reportabug

This is a regression from 7.10.3. Setting priority=highest.