Tighten existential subsume rules further:

Also drop existential instances subsuming Fresh instances.

Author: odersky

compiler/src/dotty/tools/dotc/cc/CaptureRef.scala

@@ -265,6 +265,7 @@ trait CaptureRef extends TypeProxy, ValueType:
       case Existential.Vble(binder) =>
         y.stripReadOnly match
           case Existential.Vble(binder1) => false
+          case Fresh(_) => false
           case _ => true
       case _ =>
         this.isCap && !yIsExistential && canAddHidden && vs != VarState.HardSeparate

tests/neg-custom-args/captures/cc-existential-conformance.check

@@ -8,6 +8,13 @@
   |                                  x² is a reference to a value parameter
   |
   | longer explanation available when compiling with `-explain`
+-- [E007] Type Mismatch Error: tests/neg-custom-args/captures/cc-existential-conformance.scala:9:29 --------------------
+9 |  val z: A -> (x: A) -> B^ = y // error
+  |                             ^
+  |                             Found:    (y : A -> A -> B^)
+  |                             Required: A -> (x: A) -> B^
+  |
+  | longer explanation available when compiling with `-explain`
 -- [E007] Type Mismatch Error: tests/neg-custom-args/captures/cc-existential-conformance.scala:13:19 -------------------
 13 |  val y: Fun[B^] = x // error
    |                   ^
@@ -18,3 +25,10 @@
    |                             x² is a reference to a value parameter
    |
    | longer explanation available when compiling with `-explain`
+-- [E007] Type Mismatch Error: tests/neg-custom-args/captures/cc-existential-conformance.scala:14:24 -------------------
+14 |  val z: (x: A) -> B^ = y // error
+   |                        ^
+   |                        Found:    (y : A -> B^)
+   |                        Required: (x: A) -> B^
+   |
+   | longer explanation available when compiling with `-explain`

tests/neg-custom-args/captures/cc-existential-conformance.scala

@@ -6,9 +6,9 @@ type Fun[T] = A -> T
 def test() =
   val x: A -> (x: A) -> B^ = ???
   val y: A -> Fun[B^] = x // error
-  val z: A -> A -> B^ = y // ok
+  val z: A -> (x: A) -> B^ = y // error
 
 def test2() =
   val x: (x: A) -> B^ = ???
   val y: Fun[B^] = x // error
-  val z: A -> B^ = y // ok
+  val z: (x: A) -> B^ = y // error