diff --git a/compiler/src/dotty/tools/dotc/transform/LazyVals.scala b/compiler/src/dotty/tools/dotc/transform/LazyVals.scala
index 2802bae99fb3..860afd11d3cc 100644
--- a/compiler/src/dotty/tools/dotc/transform/LazyVals.scala
+++ b/compiler/src/dotty/tools/dotc/transform/LazyVals.scala
@@ -9,7 +9,7 @@ import dotty.tools.dotc.core.Contexts.Context
 import dotty.tools.dotc.core.Decorators._
 import dotty.tools.dotc.core.DenotTransformers.IdentityDenotTransformer
 import dotty.tools.dotc.core.Flags._
-import dotty.tools.dotc.core.NameKinds.{LazyBitMapName, LazyLocalInitName, LazyLocalName}
+import dotty.tools.dotc.core.NameKinds.{LazyBitMapName, LazyLocalInitName, LazyLocalName, ExpandedName}
 import dotty.tools.dotc.core.StdNames.nme
 import dotty.tools.dotc.core.Symbols._
 import dotty.tools.dotc.core.Types._
@@ -73,7 +73,18 @@ class LazyVals extends MiniPhase with IdentityDenotTransformer {
     else {
       val isField = sym.owner.isClass
       if (isField)
-        if (sym.isAllOf(SyntheticModule))
+        if sym.isAllOf(SyntheticModule)
+           && sym.allOverriddenSymbols.isEmpty
+           && !sym.name.is(ExpandedName) then
+          // I am not sure what the conditions for this optimization should be.
+          // It was applied for all synthetic objects, but this is clearly false, as t704 demonstrates.
+          // It seems we have to at least exclude synthetic objects that derive from mixins.
+          // This is done by demanding that the object does not override anything.
+          // Figuring out whether a symbol implements a trait module is not so simple.
+          // For non-private trait members we can check whether there is an overridden symbol.
+          // For private trait members this does not work, since `ensureNotPrivate` in phase Mixins
+          // does change the name but does not update the owner's scope, so `allOverriddenSymbols` does
+          // not work in that case. However, we can check whether the name is an ExpandedName instead.
           transformSyntheticModule(tree)
         else if (sym.isThreadUnsafe || ctx.settings.scalajs.value)
           if (sym.is(Module) && !ctx.settings.scalajs.value) {
diff --git a/tests/run/t704.check b/tests/run/t704.check
new file mode 100644
index 000000000000..86aa34fce796
--- /dev/null
+++ b/tests/run/t704.check
@@ -0,0 +1,6 @@
+xxxx should appear twice
+zzzz should appear twice
+yyyy should appear twice
+xxxx should appear twice
+zzzz should appear twice
+yyyy should appear twice
diff --git a/tests/pos/t704.scala b/tests/run/t704.scala
similarity index 66%
rename from tests/pos/t704.scala
rename to tests/run/t704.scala
index aedd8c03afdc..cab6f4ca8b42 100644
--- a/tests/pos/t704.scala
+++ b/tests/run/t704.scala
@@ -2,6 +2,11 @@ trait D {
   private val x = "xxxx should appear twice"
   private object xxxx { Console.println(x) }
   def get_xxxx: AnyRef = xxxx
+
+  private val z = "zzzz should appear twice"
+  private lazy val zzzz = new ZZZZ
+  class ZZZZ { Console.println(z) }
+  def get_zzzz: AnyRef = zzzz
 }
 
 trait E extends D {
@@ -9,13 +14,15 @@ trait E extends D {
     val y = "yyyy should appear twice"
     object yyyy {
       val x1 = get_xxxx
+      val z1 = get_zzzz
       Console.println(y)
     }
     yyyy
   }
 }
 class C extends E {}
-object Go extends D {
+object Test extends D {
+  object E
   def main(args : Array[String]): Unit = {
     new C().f()
     new C().f()