Expressiveness shortcoming when composing functions over capturing data

Compiler version

3.2.2-RC1

Minimized example

import language.experimental.captureChecking
class Tree
case class Thicket(trees: List[Tree]) extends Tree

def test1(segments: List[{*} Tree]) =
  val elems = segments flatMap { (t: {*} Tree) => t match // error
    case ts: Thicket => ts.trees.tail
    case t => Nil
  }
  elems

Output

5 |  val elems = segments flatMap { (t: {*} Tree) => t match // error
  |                               ^
  |                      Found:    ? ({*} Tree) -> ? IterableOnce[? Tree]
  |                      Required: (box {*} Tree) => IterableOnce[box ? Tree]
6 |    case ts: Thicket => ts.trees.tail
7 |    case t => Nil
8 |  }

Expectation

Not sure. The problem is that box adaptation refuses to work since the box is over the universal set {*}. To compare, the following program compiles OK:

def test3(c: {*} Any)(segments: List[{c} Tree]) =
  val elems = segments flatMap { (t: {c} Tree) => t match
    case ts: Thicket => ts.trees.tail
    case t => Nil
  }
  elems

Here box adaptation works since the required type is

(box {c} Tree) => IterableOnce[box ? Tree]

It seems reasonable that something like this should also work for {*}. If not, we seem to have a shortcoming in applying higher-order functions to data with universal capabilities. But I don't know at present what should be tweaked. Is it

the rules for box adapation, or
the way we propagate boxes into function types?

Is this syntax (and as an extension, this ticket) still valid? cc @odersky @Linyxus

Trying to replicate with the minimised example on main:

import language.experimental.captureChecking
class Tree
case class Thicket(trees: List[Tree]) extends Tree

def test1(segments: List[{*} Tree]) =
  val elems = segments flatMap { (t: {*} Tree) => t match // error
    case ts: Thicket => ts.trees.tail
    case t => Nil
  }
  elems

gives me an error, yes, but it's a syntax one:

-- [E103] Syntax Error: smth.scala:5:26 ----------------------------------------
5 |def test1(segments: List[{*} Tree]) =
  |                          ^
  |                          Illegal start of declaration
  |
  | longer explanation available when compiling with `-explain`
-- [E040] Syntax Error: smth.scala:5:29 ----------------------------------------
5 |def test1(segments: List[{*} Tree]) =
  |                             ^^^^
  |                             ',' or ']' expected, but identifier found
-- [E103] Syntax Error: smth.scala:6:38 ----------------------------------------
6 |  val elems = segments flatMap { (t: {*} Tree) => t match // error
  |                                      ^
  |                                      Illegal start of declaration
  |
  | longer explanation available when compiling with `-explain`
-- [E040] Syntax Error: smth.scala:6:41 ----------------------------------------
6 |  val elems = segments flatMap { (t: {*} Tree) => t match // error
  |                                         ^^^^
  |                                 ',' or ')' expected, but identifier found
4 errors found

Similarly, the original post implies the other example should compile, while it currently does not:

import language.experimental.captureChecking
class Tree
case class Thicket(trees: List[Tree]) extends Tree

def test3(c: {*} Any)(segments: List[{c} Tree]) =
  val elems = segments flatMap { (t: {c} Tree) => t match
    case ts: Thicket => ts.trees.tail
    case t => Nil
  }
  elems

This gives me:

-- [E103] Syntax Error: smth.scala:5:14 ----------------------------------------
5 |def test3(c: {*} Any)(segments: List[{c} Tree]) =
  |              ^
  |              Illegal start of declaration
  |
  | longer explanation available when compiling with `-explain`
-- [E040] Syntax Error: smth.scala:5:17 ----------------------------------------
5 |def test3(c: {*} Any)(segments: List[{c} Tree]) =
  |                 ^^^
  |                 ',' or ')' expected, but identifier found
-- [E103] Syntax Error: smth.scala:5:38 ----------------------------------------
5 |def test3(c: {*} Any)(segments: List[{c} Tree]) =
  |                                      ^
  |                                      Illegal start of declaration
  |
  | longer explanation available when compiling with `-explain`
-- [E040] Syntax Error: smth.scala:5:41 ----------------------------------------
5 |def test3(c: {*} Any)(segments: List[{c} Tree]) =
  |                                         ^^^^
  |                                 ',' or ']' expected, but identifier found
-- [E103] Syntax Error: smth.scala:6:38 ----------------------------------------
6 |  val elems = segments flatMap { (t: {c} Tree) => t match
  |                                      ^
  |                                      Illegal start of declaration
  |
  | longer explanation available when compiling with `-explain`
-- [E040] Syntax Error: smth.scala:6:41 ----------------------------------------
6 |  val elems = segments flatMap { (t: {c} Tree) => t match
  |                                         ^^^^
  |                                 ',' or ')' expected, but identifier found
6 errors found

scala / scala3