diff --git a/compiler/src/dotty/tools/dotc/core/TypeOps.scala b/compiler/src/dotty/tools/dotc/core/TypeOps.scala
index 4909602915d3..78fe3984efa5 100644
--- a/compiler/src/dotty/tools/dotc/core/TypeOps.scala
+++ b/compiler/src/dotty/tools/dotc/core/TypeOps.scala
@@ -125,6 +125,12 @@ object TypeOps:
   }
 
   def isLegalPrefix(pre: Type)(using Context): Boolean =
+    // This used to be `pre.isStable || !ctx.phase.isTyper` but the latter
+    // condition was dropped in #21954 to make implicit search during the
+    // inlining phase behave more like implicit search during the typer phase.
+    // However, this change has led to retyping issues (#23423) and I suspect
+    // other issues could crop up as we might end up calling asSeenFrom with a
+    // widened prefix in various situations post-typer.
     pre.isStable
 
   /** Implementation of Types#simplified */
diff --git a/compiler/src/dotty/tools/dotc/staging/HealType.scala b/compiler/src/dotty/tools/dotc/staging/HealType.scala
index 509049e131c8..37e77f3e7386 100644
--- a/compiler/src/dotty/tools/dotc/staging/HealType.scala
+++ b/compiler/src/dotty/tools/dotc/staging/HealType.scala
@@ -32,12 +32,14 @@ class HealType(pos: SrcPos)(using Context) extends TypeMap {
    */
   def apply(tp: Type): Type =
     tp match
-      case NonSpliceAlias(aliased) => this.apply(aliased)
-      case tp: TypeRef => healTypeRef(tp)
-      case tp: TermRef =>
-        val inconsistentRoot = levelInconsistentRootOfPath(tp)
-        if inconsistentRoot.exists then levelError(inconsistentRoot, tp, pos)
-        else mapOver(tp)
+      case tp: NamedType if tp.symbol.isLocal => tp match
+        case NonSpliceAlias(aliased) =>
+          this.apply(aliased)
+        case tp: TypeRef => healTypeRef(tp)
+        case tp: TermRef =>
+          val inconsistentRoot = levelInconsistentRootOfPath(tp)
+          if inconsistentRoot.exists then levelError(inconsistentRoot, tp, pos)
+          else mapOver(tp)
       case tp: AnnotatedType =>
         derivedAnnotatedType(tp, apply(tp.parent), tp.annot)
       case _ =>
diff --git a/tests/pos-macros/i23423/A_1.scala b/tests/pos-macros/i23423/A_1.scala
new file mode 100644
index 000000000000..62455c74eed0
--- /dev/null
+++ b/tests/pos-macros/i23423/A_1.scala
@@ -0,0 +1,16 @@
+package pkg
+
+import scala.quoted.*
+
+trait HasElem {
+  type Elem
+  type Alias = Elem
+}
+
+object Macro:
+  inline def foo: Unit = ${fooImpl}
+  def fooImpl(using Quotes): Expr[Unit] =
+    '{
+      val lll: (he: HasElem) => he.Alias =
+        (hx: HasElem) => ???
+    }
diff --git a/tests/pos-macros/i23423/B_2.scala b/tests/pos-macros/i23423/B_2.scala
new file mode 100644
index 000000000000..144eaf4ce1da
--- /dev/null
+++ b/tests/pos-macros/i23423/B_2.scala
@@ -0,0 +1,6 @@
+object Test:
+  def test: Unit = pkg.Macro.foo
+  // used to be error:
+  // Found:    (hx: pkg.HasElem) => hx.Elem
+  // Required: (he: pkg.HasElem) => he.Elem
+