Generic trait bound hides concrete type associated type

I tried this code:

trait Tr<'x> {
    type Out;
    fn build() -> Self::Out;
}

struct Foo;

impl<'x> Tr<'x> for Foo {
    type Out = i32;
    fn build() -> Self::Out {
        42
    }
}

fn test<'x>() -> i32
where
    Foo: Tr<'x>, // commenting out this line fixes the error
{
    Foo::build()
}

I expect this to compile, but it gives the following error:

error[E0308]: mismatched types
  --> src/lib.rs:19:5
   |
15 | fn test<'x>() -> i32
   |                  --- expected `i32` because of return type
...
19 |     Foo::build()
   |     ^^^^^^^^^^^^ expected `i32`, found associated type
   |
   = note:         expected type `i32`
           found associated type `<Foo as Tr<'_>>::Out`
   = help: consider constraining the associated type `<Foo as Tr<'_>>::Out` to `i32`
   = note: for more information, visit https://doc.rust-lang.org/book/ch19-03-advanced-traits.html

The code also works if the trait is made non-generic.

Meta

rustc --version --verbose:

rustc 1.86.0-nightly (ad211ced8 2025-01-07)
binary: rustc
commit-hash: ad211ced81509462cdfe4c29ed10f97279a0acae
commit-date: 2025-01-07
host: x86_64-unknown-linux-gnu
release: 1.86.0-nightly
LLVM version: 19.1.6

same result on stable

Start with the minimal reproduction in src/lib.rs and compile it with rustc, comparing the generic-trait-bound case with the non-generic version. Trace how the compiler resolves Foo::build() and its associated type; done means the reported example compiles as expected without an explicit associated-type constraint and the behavior is covered by a regression test.