E0195 when method lifetime used on a GAT inside an APIT in trait is inlined and unused

I tried this code:

trait Query<'a, 's> {}

impl<'a, 's> Query<'a, 's> for &'a i32 {}

trait Foo {
    type Query<'a, 's>: Query<'a, 's>;
    fn read<'a, 's>(arg: impl Iterator<Item = Self::Query<'a, 's>>);
}

struct Bar;

impl Foo for Bar {
    type Query<'a, 's> = &'a i32;
    fn read<'a, 's>(_arg: impl Iterator<Item = &'a i32>) {}
}

I expected to see this happen:
This should compile since the Foo for Bar impl just resolved Self::Query<'a, 's> into its real type (&'a i32).

Instead, this happened:

error[E0195]: lifetime parameters or bounds on associated function `read` do not match the trait declaration
  --> src/lib.rs:14:12
   |
 7 |     fn read<'a, 's>(arg: impl Iterator<Item = Self::Query<'a, 's>>);
   |            -------- lifetimes in impl do not match this associated function in trait
...
14 |     fn read<'a, 's>(_arg: impl Iterator<Item = &'a i32>) {}
   |            ^^^^^^^^ lifetimes do not match associated function in trait

However, if we change impl Iterator<Item = Xxx> to Xxx in both the trait and the impl, it compiles:

trait Query<'a, 's> {}

impl<'a, 's> Query<'a, 's> for &'a i32 {}

trait Foo {
    type Query<'a, 's>: Query<'a, 's>;
    fn read<'a, 's>(arg:  Self::Query<'a, 's>);
}

struct Bar;

impl Foo for Bar {
    type Query<'a, 's> = &'a i32;
    fn read<'a, 's>(_arg:  &'a i32) {}
}

Also works when the APIT is changed to a &dyn Iterator<Item = Xxx>:

trait Query<'a, 's> {}

impl<'a, 's> Query<'a, 's> for &'a i32 {}

trait Foo {
    type Query<'a, 's>: Query<'a, 's>;
    fn read<'a, 's>(arg: &dyn Iterator<Item = Self::Query<'a, 's>>);
}

struct Bar;

impl Foo for Bar {
    type Query<'a, 's> = &'a i32;
    fn read<'a, 's>(_arg: &dyn Iterator<Item = &'a i32>) {}
}

Meta

rustc --version --verbose:

1.92.0-nightly (2025-10-01 4da69dfff1929cc79872)

Start by compiling the reproducer shown for src/lib.rs with the reported nightly rustc version and compare it with the working non-APIT variants. Trace handling of E0195 for a GAT used through an associated type in an argument-position impl Trait. Done means the APIT example compiles without the lifetime mismatch while the relevant regression behavior remains covered.