Dependent type family does not reduce

When a type family is used in a kind of an argument for another type family, it does not reduce. Here's example code:

{-# LANGUAGE TypeInType, GADTs, TypeFamilies #-}

import Data.Kind (Type)

data N = Z | S N

data Fin :: N -> Type where
  FZ :: Fin (S n)
  FS :: Fin n -> Fin (S n)

type family FieldCount (t :: Type) :: N

type family FieldType (t :: Type) (i :: Fin (FieldCount t)) :: Type

data T

type instance FieldCount T = S (S (S Z))

type instance FieldType T FZ = Int
type instance FieldType T (FS FZ) = Bool
type instance FieldType T (FS (FS FZ)) = String

Unfortunately, I get these errors during typechecking:

[1 of 1] Compiling Main             ( fieldtype.hs, fieldtype.o )

fieldtype.hs:19:27: error:
    • Expected kind ‘Fin (FieldCount T)’,
        but ‘'FZ’ has kind ‘Fin ('S n0)’
    • In the second argument of ‘FieldType’, namely ‘FZ’
      In the type instance declaration for ‘FieldType’

fieldtype.hs:20:28: error:
    • Expected kind ‘Fin (FieldCount T)’,
        but ‘'FS 'FZ’ has kind ‘Fin ('S ('S n0))’
    • In the second argument of ‘FieldType’, namely ‘FS FZ’
      In the type instance declaration for ‘FieldType’

fieldtype.hs:21:28: error:
    • Expected kind ‘Fin (FieldCount T)’,
        but ‘'FS ('FS 'FZ)’ has kind ‘Fin ('S ('S ('S n0)))’
    • In the second argument of ‘FieldType’, namely ‘FS (FS FZ)’
      In the type instance declaration for ‘FieldType’

Trac metadata

Trac field	Value
Version	8.0.1
Type	Bug
TypeOfFailure	OtherFailure
Priority	normal
Resolution	Unresolved
Component	Compiler (Type checker)
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