Confusing error message in type checking related to type family, fundep, and higher-rank type

(This is related to, but different from, the message which I posted to glasgow-haskell-users mailing list: http://www.haskell.org/pipermail/glasgow-haskell-users/2012-September/022815.html.)

GHC 7.6.1-rc1 (7.6.0.20120810; 64-bit Windows) rejects the attached code (Test2.hs) with the following error message:

Test2.hs:24:52:
    Couldn't match expected type `Y'
                with actual type `TF (forall b. (C A b, TF b ~ Y) => b)'
    In the first argument of `f ::
                                (forall b. (C A b, TF b ~ Y) => b) -> X', namely
      `u'
    In the expression: (f :: (forall b. (C A b, TF b ~ Y) => b) -> X) u
    In an equation for `v':
        v = (f :: (forall b. (C A b, TF b ~ Y) => b) -> X) u

I am not sure whether the code is supposed to be accepted or rejected, but even if it is correct to reject the code, this error message does not look right to me. If I am not mistaken, the error message is saying that the type checker expects the argument of (f :: (forall b. (C A b, TF b ~ Y) => b) -> X) to have type Y, but I cannot think of any reason why it should relate the type (forall b. (C A b, TF b ~ Y) => b) with Y.

The same code is available also at https://gist.github.com/3606856.

Trac metadata

Trac field	Value
Version	7.6.1-rc1
Type	Bug
TypeOfFailure	OtherFailure
Priority	normal
Resolution	Unresolved
Component	Compiler (Type checker)
Test case
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