diff --git a/compiler/src/dotty/tools/dotc/typer/Applications.scala b/compiler/src/dotty/tools/dotc/typer/Applications.scala
index 7d77920e8741..48858d321d73 100644
--- a/compiler/src/dotty/tools/dotc/typer/Applications.scala
+++ b/compiler/src/dotty/tools/dotc/typer/Applications.scala
@@ -1142,15 +1142,15 @@ trait Applications extends Compatibility { self: Typer with Dynamic =>
      *
      *    flip(T) <: flip(U)
      *
-     *  where `flip` changes top-level contravariant type aliases to covariant ones.
-     *  Intuitively `<:s` means subtyping `<:`, except that all top-level arguments
+     *  where `flip` changes covariant occurrences of contravariant type parameters to
+     *  covariant ones. Intuitively `<:s` means subtyping `<:`, except that all arguments
      *  to contravariant parameters are compared as if they were covariant. E.g. given class
      *
      *     class Cmp[-X]
      *
-     *  `Cmp[T] <:s Cmp[U]` if `T <: U`. On the other hand, nested occurrences
-     *  of parameters are not affected.
-     *  So `T <: U` would imply `List[Cmp[U]] <:s List[Cmp[T]]`, as usual.
+     *  `Cmp[T] <:s Cmp[U]` if `T <: U`. On the other hand, non-variant occurrences
+     *  of parameters are not affected. So `T <: U` would imply `Set[Cmp[U]] <:s Set[Cmp[T]]`,
+     *  as usual, because `Set` is non-variant.
      *
      *  This relation might seem strange, but it models closely what happens for methods.
      *  Indeed, if we integrate the existing rules for methods into `<:s` we have now that
@@ -1167,7 +1167,6 @@ trait Applications extends Compatibility { self: Typer with Dynamic =>
       else {
         val flip = new TypeMap {
           def apply(t: Type) = t match {
-            case t: TypeBounds => t
             case t @ AppliedType(tycon, args) =>
               def mapArg(arg: Type, tparam: TypeParamInfo) =
                 if (variance > 0 && tparam.paramVariance < 0) defn.FunctionOf(arg :: Nil, defn.UnitType)
diff --git a/tests/run/contrarivant.scala b/tests/run/contrarivant.scala
new file mode 100644
index 000000000000..d5781146add1
--- /dev/null
+++ b/tests/run/contrarivant.scala
@@ -0,0 +1,26 @@
+object Test extends App {
+
+  // toplevel contra
+  implicit def f: String => String = x => "f"
+  implicit def g: Object => String = x => "g"
+  def h(implicit x: String => String) = x("")
+  assert(h == "f", h)
+
+  // nested contra
+  implicit def fs: List[String => String] = List(f)
+  implicit def gs: List[Object => String] = List(g)
+  def hs(implicit xs: List[String => String]) = xs.head("")
+  assert(hs == "f", hs)
+
+  // covariant subapplication nested in toplevel contra
+  implicit def f2: (Unit => String) => String = x => "f2"
+  implicit def g2: (Unit => Object) => String = x => "g2"
+  def h2(implicit x: (Unit => String) => String) = x(_ => "")
+  assert(h2 == "f2", h2)
+
+  // covariant subapplication nested in nested contra
+  implicit def fs2: List[(Unit => String) => String] = List(f2)
+  implicit def gs2: List[(Unit => Object) => String] = List(g2)
+  def hs2(implicit xs: List[(Unit => String) => String]) = xs.head(_ => "")
+  assert(hs2 == "f2", hs2)
+}