Address review comments

Author: odersky

compiler/src/dotty/tools/dotc/core/TypeOps.scala

@@ -223,7 +223,7 @@ trait TypeOps { this: Context => // TODO: Make standalone object.
           tp2 match {
             case tp2 @ TypeRef(pre2, _) if tp1.name eq tp2.name =>
               tp1.derivedSelect(pre1 | pre2)
-            case _ => fail
+            case _ => fallback
           }
         case AndType(tp11, tp12) =>
           mergeRefinedOrApplied(tp11, tp2) & mergeRefinedOrApplied(tp12, tp2)

tests/pos/i7965.scala

@@ -11,6 +11,8 @@ abstract class Test {
   foo(x)
 }
 
+// -------------------------------------------
+
 trait ZLayer[-RIn, +E, +ROut <: Has[_]] {
   def >>>[E1 >: E, ROut2 <: Has[_]](that: ZLayer[ROut, E1, ROut2]): ZLayer[RIn, E1, ROut2]
   def ++[E1 >: E, RIn2, ROut1 >: ROut <: Has[_], ROut2 <: Has[_]](that: ZLayer[RIn2, E1, ROut2]): ZLayer[RIn with RIn2, E1, ROut1 with ROut2]
@@ -45,4 +47,20 @@ object ServiceD {
 
 val combined =
     ServiceA.live >>>
-      (ServiceB.live ++ (ServiceC.live >>> ServiceD.live))
+      (ServiceB.live ++ (ServiceC.live >>> ServiceD.live))
+
+// -------------------------------------------
+
+class Outer {
+  class Elem
+}
+
+abstract class Test2 {
+  val o1: Outer = ???
+  val o2: Outer = ???
+  val o3: Outer = ???
+
+  val x: o1.Elem | (o2.Elem & o3.Elem)
+  def foo[T <: Outer#Elem](has: T): T = ???
+  foo(x)
+}