diff --git a/compiler/src/dotty/tools/dotc/core/TypeApplications.scala b/compiler/src/dotty/tools/dotc/core/TypeApplications.scala
index 26132c7c0205..58f9732edf1f 100644
--- a/compiler/src/dotty/tools/dotc/core/TypeApplications.scala
+++ b/compiler/src/dotty/tools/dotc/core/TypeApplications.scala
@@ -346,7 +346,7 @@ class TypeApplications(val self: Type) extends AnyVal {
             }
             if ((dealiased eq stripped) || followAlias)
               try
-                val instantiated = dealiased.instantiate(args)
+                val instantiated = dealiased.instantiate(args.mapConserve(_.boxedUnlessFun(self)))
                 if (followAlias) instantiated.normalized else instantiated
               catch
                 case ex: IndexOutOfBoundsException =>
diff --git a/tests/neg-custom-args/captures/i15923-cases.scala b/tests/neg-custom-args/captures/i15923-cases.scala
new file mode 100644
index 000000000000..5fbb95355a60
--- /dev/null
+++ b/tests/neg-custom-args/captures/i15923-cases.scala
@@ -0,0 +1,15 @@
+trait Cap { def use(): Int }
+type Id[X] = [T] -> (op: X => T) -> T
+def mkId[X](x: X): Id[X] = [T] => (op: X => T) => op(x)
+
+def foo(x: Id[{*} Cap]) = {
+  x(_.use())  // error
+}
+
+def bar(io: {*} Cap, x: Id[{io} Cap]) = {
+  x(_.use())
+}
+
+def barAlt(a: {*} Cap, b: {*} Cap, x: Id[{a, b} Cap]) = {
+  x(_.use())
+}
diff --git a/tests/neg-custom-args/captures/i15923.scala b/tests/neg-custom-args/captures/i15923.scala
new file mode 100644
index 000000000000..ac7ee995150e
--- /dev/null
+++ b/tests/neg-custom-args/captures/i15923.scala
@@ -0,0 +1,14 @@
+trait Cap { def use(): Int }
+type Id[X] = [T] -> (op: X => T) -> T
+def mkId[X](x: X): Id[X] = [T] => (op: X => T) => op(x)
+
+def bar() = {
+  def withCap[X](op: ({*} Cap) => X): X = {
+    val cap: {*} Cap = new Cap { def use() = { println("cap is used"); 0 } }
+    val result = op(cap)
+    result
+  }
+
+  val leak = withCap(cap => mkId(cap))
+  leak { cap => cap.use() }   // error
+}