Compiler hang with nested `impl Trait` and multiple lifetime bounds in associated type

I tried this code:

//@compile-flags: -Znext-solver=globally
trait Cap<'a> {}
impl<T> Cap<'_> for T {}
trait IntoCapIterator {
    type Item: IntoCapIterator;
    fn into_cap_iter(self) -> Self::Item;
}
impl<'s, 'a, 'b> IntoCapIterator for &'s u8
where
    's: 'a,
    's: 'b,
{
    type Item = impl IntoIterator<Item = impl Cap<'a> + Cap<'b>>;
    fn into_cap_iter(self) -> Self::Item {
        [self]
    }
}
fn fail_early_bound<'s, 'a, 'b>(
    a: &'s u8,
) -> impl IntoIterator<Item = impl Cap<'a> + Cap<'b>> {
    a.into_cap_iter()
}
fn fail_late_bound<'s, 'a, 'b>(
    a: &'s u8,
    _: &'a &'s u8,
    _: &'b &'s u8,
) -> impl IntoIterator<Item = impl Cap<'a> + Cap<'b>> {
    a.into_cap_iter()
}
fn main() {}

It seems the trait solver gets trapped in an infinite cycle trying to resolve the opaque types and their recursive bounds.

Meta

rustc --version --verbose:

rustc 1.95.0-nightly (1ed488274 2026-02-25)
binary: rustc
commit-hash: 1ed488274bec5bf5cfe6bf7a1cc089abcc4ebd68
commit-date: 2026-02-25
host: x86_64-unknown-linux-gnu
release: 1.95.0-nightly
LLVM version: 22.1.0

<backtrace>

Start by compiling the issue's Rust reproducer with -Znext-solver=globally and observe the hang while resolving the nested opaque types and lifetime bounds. Trace the trait-solver path involved in those recursive associated-type obligations; done means the reproducer no longer hangs and its behavior is covered by a regression test.