diff --git a/compiler/src/dotty/tools/dotc/cc/CheckCaptures.scala b/compiler/src/dotty/tools/dotc/cc/CheckCaptures.scala
index ec134149eb49..b05ab8542137 100644
--- a/compiler/src/dotty/tools/dotc/cc/CheckCaptures.scala
+++ b/compiler/src/dotty/tools/dotc/cc/CheckCaptures.scala
@@ -969,7 +969,7 @@ class CheckCaptures extends Recheck, SymTransformer:
       if tree.isTerm then
         if !ccConfig.useExistentials then
           checkReachCapsIsolated(res.widen, tree.srcPos)
-        if !pt.isBoxedCapturing then
+        if !pt.isBoxedCapturing && pt != LhsProto then
           markFree(res.boxedCaptureSet, tree.srcPos)
       res
 
diff --git a/tests/pos-custom-args/captures/i21507.scala b/tests/pos-custom-args/captures/i21507.scala
new file mode 100644
index 000000000000..bb80dafb3b45
--- /dev/null
+++ b/tests/pos-custom-args/captures/i21507.scala
@@ -0,0 +1,10 @@
+import language.experimental.captureChecking
+
+trait Box[Cap^]:
+  def store(f: (() -> Unit)^{Cap^}): Unit
+
+def run[Cap^](f: Box[Cap]^{Cap^} => Unit): Box[Cap]^{Cap^} =
+  new Box[Cap]:
+    private var item: () ->{Cap^} Unit = () => ()
+    def store(f: () ->{Cap^} Unit): Unit =
+      item = f  // was error, now ok