Interaction of ConstraintKinds and QuantifiedConstraints. There was already an issue about it https://gitlab.haskell.org/ghc/ghc/-/issues/16139 .

ng.hs

{-# LANGUAGE ConstraintKinds #-}
{-# LANGUAGE QuantifiedConstraints #-}

data Rose f a = Branch a (f (Rose f a))

type Eq1 f = (forall b. Eq b => Eq (f b))
{-
ng.hs:6:33: error:
    • Expected a type, but ‘Eq (f b)’ has kind ‘Constraint’
    • In the type ‘(forall b. Eq b => Eq (f b))’
      In the type declaration for ‘Eq1’
  |
6 | type Eq1 f = (forall b. Eq b => Eq (f b))
  |                                 ^^^^^^^^
Failed, no modules loaded.
-}

instance (Eq a, Eq1 f) => Eq (Rose f a) where
  Branch x1 c1 == Branch x2 c2 = x1==x1 && c1==c2

ok.hs

{-# LANGUAGE ConstraintKinds #-}
{-# LANGUAGE QuantifiedConstraints #-}

data Rose f a = Branch a (f (Rose f a))

instance (Eq a, forall b. Eq b => Eq (f b)) => Eq (Rose f a) where
  Branch x1 c1 == Branch x2 c2 = x1==x1 && c1==c2

ok2.hs

{-# LANGUAGE ConstraintKinds #-}
{-# LANGUAGE KindSignatures #-}
{-# LANGUAGE QuantifiedConstraints #-}
{-# LANGUAGE RankNTypes #-}
import Data.Kind

data Rose f a = Branch a (f (Rose f a))

type Eq1 f = (forall b. Eq b => Eq (f b)) :: Constraint

instance (Eq a, Eq1 f) => Eq (Rose f a) where
  Branch x1 c1 == Branch x2 c2 = x1==x1 && c1==c2

stack.yaml

resolver: nightly-2020-08-03
packages: []