Refinement of interpolation direction

src/dotty/tools/dotc/core/ConstraintHandling.scala

@@ -177,7 +177,25 @@ trait ConstraintHandling {
           case tp: RefinedType if param occursIn tp.refinedInfo => tp.parent
           case tp: WildcardType =>
             val bounds = tp.optBounds.orElse(TypeBounds.empty).bounds
-            if (fromBelow == (variance >= 0)) bounds.lo else bounds.hi
+            // Try to instantiate the wildcard to a type that is known to conform to it.
+            // This means:
+            //  If fromBelow is true, we minimize the type overall
+            //  Hence, if variance < 0, pick the maximal safe type: bounds.lo
+            //           (i.e. the whole bounds range is over the type)
+            //         if variance > 0, pick the minimal safe type: bounds.hi
+            //           (i.e. the whole bounds range is under the type)
+            //         if variance == 0, pick bounds.lo anyway (this is arbitrary but in line with
+            //           the principle that we pick the smaller type when in doubt).
+            //  If fromBelow is false, we maximize the type overall and reverse the bounds
+            //  if variance != 0. For variance == 0, we still minimize.
+            //  In summary we pick the bound given by this table:
+            //
+            //  variance    | -1  0   1
+            //  ------------------------
+            //  from below  | lo  lo  hi
+            //  from above  | hi  lo  lo
+            //
+            if (variance == 0 || fromBelow == (variance < 0)) bounds.lo else bounds.hi
           case _ => tp
         }
       }

tests/pos/i1590.scala

@@ -1 +1,10 @@
 case class W[T](seq: Option[Option[T]] = Option.empty)
+object W {
+  def apply[T] = new W[T]()
+}
+
+case class V[T](vv: W[W[T]] = W.apply)
+object Test {
+  W[Int]()
+  // V[Int]()    fails in scalac and dotty: both instantiate the vv-default to W[Nothing]
+}