GHC 9.2 fails to select an instance based on kinds in the presence of type families

Summary

I'm observing an instance resolution regression between GHC 9.0.2 and 9.2.4/9.2.5. Consider the following code:

{-# LANGUAGE KindSignatures, DataKinds, TypeFamilies, FlexibleInstances #-}

module Bug where

import Data.Kind

data D = D
type family F :: D -> Type
-- data F (x :: D)

class C f where
  meth :: f

instance C (f (p :: D))
instance C (f (p :: Type))

_ = meth :: F 'D
_ = meth :: [Type]

The problem is in _ = meth :: F 'D. By all accounts, F 'D should match with f (p :: D), and it does in GHC 9.0. GHC 9.2, however, produces an inane error message:

error:
    • Overlapping instances for C (F 'D) arising from a use of ‘meth’
      Matching instances: instance C (f p) -- Defined at test.hs:12:10
      There exists a (perhaps superclass) match:
      (The choice depends on the result of evaluating ‘F’
       To pick the first instance above, use IncoherentInstances
       when compiling the other instance declarations)
    • In the expression: meth :: F 'D
      In a pattern binding: _ = meth :: F 'D

Notice it only shows a single matching instance, but says there are many!

Switching type family F for data F makes it resolve the instance as expected again, so this is type-family-specific.

#21208 (closed), #21515 (closed) seem related.

Steps to reproduce

Try to compile/load the example code above.

Expected behavior

To typecheck.

Environment

• GHC version used: tested on 9.2.4 and 9.2.5