diff --git a/src/poetry/mixology/term.py b/src/poetry/mixology/term.py
index 260567b1b7f..89580d8a541 100644
--- a/src/poetry/mixology/term.py
+++ b/src/poetry/mixology/term.py
@@ -127,17 +127,17 @@ def intersect(self, other: Term) -> Term | None:
                 negative = other if self.is_positive() else self
 
                 return self._non_empty_term(
-                    positive.constraint.difference(negative.constraint), True
+                    positive.constraint.difference(negative.constraint), True, other
                 )
             elif self.is_positive():
                 # foo ^1.0.0 ∩ foo >=1.5.0 <3.0.0 → foo ^1.5.0
                 return self._non_empty_term(
-                    self.constraint.intersect(other.constraint), True
+                    self.constraint.intersect(other.constraint), True, other
                 )
             else:
                 # not foo ^1.0.0 ∩ not foo >=1.5.0 <3.0.0 → not foo >=1.0.0 <3.0.0
                 return self._non_empty_term(
-                    self.constraint.union(other.constraint), False
+                    self.constraint.union(other.constraint), False, other
                 )
         elif self.is_positive() != other.is_positive():
             return self if self.is_positive() else other
@@ -151,21 +151,45 @@ def difference(self, other: Term) -> Term | None:
         """
         return self.intersect(other.inverse)
 
+    @staticmethod
+    def _is_direct_reference(dependency: Dependency) -> bool:
+        return dependency.source_type in ["directory", "file", "url", "git"]
+
     def _compatible_dependency(self, other: Dependency) -> bool:
         compatible: bool = (
             self.dependency.is_root
             or other.is_root
             or other.is_same_package_as(self.dependency)
         )
+
+        if (
+            not compatible
+            and not self._is_direct_reference(self.dependency)
+            and self._is_direct_reference(other)
+        ):
+            # we do this here to indicate direct reference dependencies are compatible
+            # with NVR dependencies
+            return (
+                self.dependency.complete_name == other.complete_name
+                and self.dependency.constraint.allows_all(other.constraint)
+            )
+
         return compatible
 
     def _non_empty_term(
-        self, constraint: VersionConstraint, is_positive: bool
+        self, constraint: VersionConstraint, is_positive: bool, other: Term
     ) -> Term | None:
         if constraint.is_empty():
             return None
 
-        return Term(self.dependency.with_constraint(constraint), is_positive)
+        # when creating a new term prefer direct-reference dependencies
+        dependency = (
+            other.dependency
+            if not self._is_direct_reference(self.dependency)
+            and self._is_direct_reference(other.dependency)
+            else self.dependency
+        )
+        return Term(dependency.with_constraint(constraint), is_positive)
 
     def __str__(self) -> str:
         prefix = "not " if not self.is_positive() else ""
diff --git a/tests/puzzle/test_solver.py b/tests/puzzle/test_solver.py
index fe47e8bd220..2ca281be0e6 100644
--- a/tests/puzzle/test_solver.py
+++ b/tests/puzzle/test_solver.py
@@ -22,6 +22,7 @@
 from poetry.repositories.pool import Pool
 from poetry.repositories.repository import Repository
 from poetry.utils.env import MockEnv
+from tests.compat import is_poetry_core_1_1_0a7_compat
 from tests.helpers import get_dependency
 from tests.helpers import get_package
 from tests.repositories.test_legacy_repository import (
@@ -1383,7 +1384,10 @@ def test_solver_duplicate_dependencies_different_sources_types_are_preserved(
 
     assert len(complete_package.all_requires) == 2
 
-    pypi, git = complete_package.all_requires
+    if is_poetry_core_1_1_0a7_compat:
+        pypi, git = complete_package.all_requires
+    else:
+        git, pypi = complete_package.all_requires
 
     assert isinstance(pypi, Dependency)
     assert pypi == dependency_pypi