diff --git a/compiler/src/dotty/tools/dotc/core/ConstraintHandling.scala b/compiler/src/dotty/tools/dotc/core/ConstraintHandling.scala
index d9c7a94eead6..62c60fbf93c0 100644
--- a/compiler/src/dotty/tools/dotc/core/ConstraintHandling.scala
+++ b/compiler/src/dotty/tools/dotc/core/ConstraintHandling.scala
@@ -6,6 +6,7 @@ import Types._
 import Contexts._
 import Symbols._
 import Decorators._
+import Flags._
 import config.Config
 import config.Printers.{constr, typr}
 import dotty.tools.dotc.reporting.trace
@@ -298,6 +299,9 @@ trait ConstraintHandling[AbstractContext] {
    *      of all common base types, provied the result is a subtype of `bound`.
    *
    *  Don't do these widenings if `bound` is a subtype of `scala.Singleton`.
+   *  Also, if the result of these widenings is a TypeRef to a module class,
+   *  and this type ref is different from `inst`, replace by a TermRef to
+   *  its source module instead.
    *
    * At this point we also drop the @Repeated annotation to avoid inferring type arguments with it,
    * as those could leak the annotation to users (see run/inferred-repeated-result).
@@ -314,7 +318,11 @@ trait ConstraintHandling[AbstractContext] {
     val wideInst =
       if (isSubTypeWhenFrozen(bound, defn.SingletonType)) inst
       else widenOr(widenSingle(inst))
-    wideInst.dropRepeatedAnnot
+    wideInst match
+      case wideInst: TypeRef if wideInst.symbol.is(Module) =>
+        TermRef(wideInst.prefix, wideInst.symbol.sourceModule)
+      case _ =>
+        wideInst.dropRepeatedAnnot
   }
 
   /** The instance type of `param` in the current constraint (which contains `param`).
diff --git a/tests/neg/module-class-name.check b/tests/neg/module-class-name.check
index 37c511149638..a46c5382e65c 100644
--- a/tests/neg/module-class-name.check
+++ b/tests/neg/module-class-name.check
@@ -1,22 +1,22 @@
 -- [E007] Type Mismatch Error: tests/neg/module-class-name.scala:7:13 --------------------------------------------------
-7 |  val x: C = C    // error: Found:    Test.C.type
+7 |  val x: C = C    // error
   |             ^
   |             Found:    Test.C.type
   |             Required: Test.C
 -- [E007] Type Mismatch Error: tests/neg/module-class-name.scala:9:15 --------------------------------------------------
-9 |  val y: C = f(C) // error: Found:    Test.C.type
+9 |  val y: C = f(C) // error
   |               ^
   |               Found:    Test.C.type
   |               Required: Test.C
 -- [E007] Type Mismatch Error: tests/neg/module-class-name.scala:12:14 -------------------------------------------------
-12 |  val z1: C = z    // error: Found:    object Test.C
+12 |  val z1: C = z    // error
    |              ^
-   |              Found:    object Test.C
+   |              Found:    Test.C.type
    |              Required: Test.C
 -- [E007] Type Mismatch Error: tests/neg/module-class-name.scala:13:16 -------------------------------------------------
-13 |  val z2: Int = z  // error: Found:    object Test.C
+13 |  val z2: Int = z  // error
    |                ^
-   |                Found:    object Test.C
+   |                Found:    Test.C.type
    |                Required: Int
 -- [E008] Member Not Found Error: tests/neg/module-class-name.scala:15:4 -----------------------------------------------
 15 |  C.foo  // error: value foo is not a member of object Test.C
diff --git a/tests/neg/module-class-name.scala b/tests/neg/module-class-name.scala
index e4bf6c0f4e98..07bb69fb402e 100644
--- a/tests/neg/module-class-name.scala
+++ b/tests/neg/module-class-name.scala
@@ -4,13 +4,13 @@ object Test {
 
   def f[T](x: T): T = x
 
-  val x: C = C    // error: Found:    Test.C.type
+  val x: C = C    // error
 
-  val y: C = f(C) // error: Found:    Test.C.type
+  val y: C = f(C) // error
 
   def z = f(C)
-  val z1: C = z    // error: Found:    object Test.C
-  val z2: Int = z  // error: Found:    object Test.C
+  val z1: C = z    // error
+  val z2: Int = z  // error
 
   C.foo  // error: value foo is not a member of object Test.C
 }
diff --git a/tests/pos/i4987.scala b/tests/pos/i4987.scala
new file mode 100644
index 000000000000..e251c4091697
--- /dev/null
+++ b/tests/pos/i4987.scala
@@ -0,0 +1,18 @@
+object Foo {
+
+  class Expr[T]
+
+  abstract class Liftable[T] {
+    def toExpr(x: T): Expr[T]
+  }
+
+  implicit class LiftExprOps[T](val x: T) extends AnyVal {
+    def toExpr(implicit ev: Liftable[T]): Expr[T] = ev.toExpr(x)
+  }
+
+  implicit def NilIsLiftable: Liftable[Nil.type] = ???
+
+  Nil.toExpr(NilIsLiftable)
+  (Nil.toExpr: Expr[Nil.type])
+  Nil.toExpr
+}
\ No newline at end of file