NegativeLiterals breaks an otherwise well-typed program

Summary

The following program fails to compile:

{-# LANGUAGE NegativeLiterals #-}

module Test where

tooLarge :: Int -> a
tooLarge _ = errorWithoutStackTrace ("!!: index too large")

{-# INLINABLE (!!) #-}
xs !! n = foldr (\x r k -> r (k-1)) tooLarge xs n

with the error

/home/sandy/Test.hs:9:18: error:
    • Couldn't match type ‘Integer -> Int’ with ‘Int’
      Expected type: Int -> t1
        Actual type: (Integer -> Int) -> t1
    • In the first argument of ‘foldr’, namely ‘(\ x r k -> r (k -1))’

However, this program will compile successfully under -XNoNegativeLiterals. This might not be a minimal example, I didn't attempt to shrink it any further.

Steps to reproduce

Attempt to compile the above program.

Expected behavior

According to the documentation of -XNegativeLiterals, this shouldn't affect the types of the program.

Environment

• GHC version used: 8.8 and 8.6

Optional:

• Operating System:
• System Architecture: