Illegal cyclic reference - regression from Scala 2

[errt]

Compiler version

3.3.1

Minimized code

trait A {
  type T1
  type T2 <: T1
}

trait B extends A {
  final override type T1 = T2
  final override type T2 = Int
}

trait C extends A

trait D extends B with C { self => }

class E extends D

Output

[error] 15 |class E extends D
[error]    |      ^
[error]    |Recursion limit exceeded.
[error]    |Maybe there is an illegal cyclic reference?
[error]    |If that's not the case, you could also try to increase the stacksize using the -Xss JVM option.
[error]    |For the unprocessed stack trace, compile with -Yno-decode-stacktraces.
[error]    |A recurring operation is (inner to outer):
[error]    |
[error]    |  find-member .T1
[error]    |  find-member .T2
[error]    |  ...
[error]    |
[error]    |  find-member .T2
[error]    |  find-member .T1

Expectation

The code compiles with Scala 2, but not with Dotty.

Removing C fixes it in the MWE above, but is not possible in the original code where C has actual members.
Changing T1 in B to final override type T1 = Int prevents the bug, but was not necessary with Scala 2.

[odersky]

Workaround

trait A {
  type T1
  type T2 <: T1
}

trait B extends A {
  final override type T1 = Int // was T2
  final override type T2 = Int
}

trait C extends A

trait D extends B with C { self => }

class E extends D

In a sense the message makes sense. If we overlay what is defined in A and B we get T1 = T2 and T2 <: T1, hence T2 <: T2. That's a cycle. I don't think it's worth fixing in particular because the workaround is trivial. @dwijnand do you agree?

[dwijnand]

That's a cycle.

Actually, yes, I agree. I would even suggest the workaround that's perhaps closer to the intent is:

  final override type T1 = Int
  final override type T2 = T1

which works. I think we would need to see some slightly less minimised, more real-world example that can demonstrate why this should be made to work.