diff --git a/compiler/src/dotty/tools/dotc/typer/Inliner.scala b/compiler/src/dotty/tools/dotc/typer/Inliner.scala
index 5870af1eb7ca..4761147a34ea 100644
--- a/compiler/src/dotty/tools/dotc/typer/Inliner.scala
+++ b/compiler/src/dotty/tools/dotc/typer/Inliner.scala
@@ -764,7 +764,13 @@ class Inliner(call: tpd.Tree, rhsToInline: tpd.Tree)(using Context) {
       for (param <- tpe.cls.typeParams)
         paramProxy(param.typeRef) = adaptToPrefix(param.typeRef)
     case tpe: NamedType
-    if tpe.symbol.is(Param) && tpe.symbol.owner == inlinedMethod && !paramProxy.contains(tpe) =>
+    if tpe.symbol.is(Param)
+        && tpe.symbol.owner == inlinedMethod
+        && (tpe.symbol.isTerm || inlinedMethod.paramSymss.exists(_.contains(tpe.symbol)))
+          // this test is needed to rule out nested LambdaTypeTree parameters
+          // with the same name as the method's parameters. Note that the nested
+          // LambdaTypeTree parameters also have the inlineMethod as owner. C.f. i13460.scala.
+        && !paramProxy.contains(tpe) =>
       paramBinding.get(tpe.name) match
         case Some(bound) => paramProxy(tpe) = bound
         case _ =>  // can happen for params bound by type-lambda trees.
@@ -960,6 +966,11 @@ class Inliner(call: tpd.Tree, rhsToInline: tpd.Tree)(using Context) {
       substTo = Nil
     )(using inlineCtx)
 
+    inlining.println(
+      i"""inliner transform with
+         |thisProxy = ${thisProxy.toList.map(_._1)}%, % --> ${thisProxy.toList.map(_._2)}%, %
+         |paramProxy = ${paramProxy.toList.map(_._1.typeSymbol.showLocated)}%, % --> ${paramProxy.toList.map(_._2)}%, %""")
+
     // Apply inliner to `rhsToInline`, split off any implicit bindings from result, and
     // make them part of `bindingsBuf`. The expansion is then the tree that remains.
     val expansion = inliner.transform(rhsToInline)
diff --git a/tests/pos/i13460.scala b/tests/pos/i13460.scala
new file mode 100644
index 000000000000..fd57cd9b8521
--- /dev/null
+++ b/tests/pos/i13460.scala
@@ -0,0 +1,55 @@
+import scala.compiletime.*
+import scala.deriving.Mirror
+
+class Lazy[A](obj: => A) {
+  lazy val value: A = obj
+}
+object Lazy {
+  given [A](using obj: => A ): Lazy[A] = new Lazy(obj)
+}
+
+trait MyTypeClass[A] {
+  def makeString(a: A): String
+}
+object MyTypeClass {
+
+  given IntTypeClass: MyTypeClass[Int] with
+    def makeString(a: Int): String = a.toString
+
+  inline given derived[A](using m: Mirror.Of[A]): MyTypeClass[A] =
+    inline m match
+      case p: Mirror.ProductOf[A] => productConverter(p)
+
+
+  private inline def summonElementTypeClasses[A](m: Mirror.Of[A]): IArray[Object] =
+    // this doesn't work
+    summonAll[Tuple.Map[m.MirroredElemTypes, [A] =>> Lazy[MyTypeClass[A]]]].toIArray
+    // but this does
+    // summonAll[Tuple.Map[Tuple.Map[m.MirroredElemTypes, MyTypeClass], Lazy]].toIArray
+
+  private inline def productConverter[A](m: Mirror.ProductOf[A]): MyTypeClass[A] = {
+    val elementTypeClasses = summonElementTypeClasses(m)
+    new MyTypeClass[A] {
+      def makeString(a: A): String = {
+        val product = a.asInstanceOf[Product]
+        elementTypeClasses
+          .view
+          .zipWithIndex
+          .map((obj, i) => {
+            val tc = obj.asInstanceOf[Lazy[MyTypeClass[Any]]].value
+            tc.makeString(product.productElement(i))
+          })
+          .mkString("[", ", ", "]")
+      }
+    }
+  }
+}
+
+case class Example(a: Int, b: Int) derives MyTypeClass
+
+object Main {
+  def main(args: Array[String]): Unit = {
+    println("hello world")
+    println(summon[MyTypeClass[Example]].makeString(Example(1,2)))
+  }
+}
\ No newline at end of file