Nowadays SetLevels floats case expressions as well as let-bindings,
and case expressions bind type variables.  We need to clone all such
floated binders, to avoid accidental name capture.  But I'd forgotten
to substitute for the cloned type variables, causing #8714.  (In the
olden days only Ids were cloned, from let-bindings.)

This patch fixes the bug and does quite a bit of clean-up refactoring
as well, by putting the context level in the LvlEnv.

There is no effect on performance, except that nofib 'rewrite' improves
allocations by 3%.  On investigation I think it was a fluke to do with
loop-cutting in big letrec nests.  But at least it's a fluke in the
right direction.

        Program           Size    Allocs   Runtime   Elapsed  TotalMem
--------------------------------------------------------------------------------
            Min          -0.4%     -3.0%    -19.4%    -19.4%    -26.7%
            Max          -0.0%     +0.0%    +17.9%    +17.9%      0.0%
 Geometric Mean          -0.1%     -0.0%     -0.7%     -0.7%     -0.4%