Scala type mismatch error involving generics and refined types

The following is a simplified version of a type-mismatch error I'm trying to solve:

trait Foo[A] {
  type B
  val b: B
}

trait Bar[T, R[_]] {
  val r: R[T]
}

object TypeMismatch extends App {
  def baz[T, U](bar: Bar[T, Foo { type B = U }]): Foo[T] { type B = U } = {
    bar.r
  }
}

The above code produces the following error:

Foo.scala:12: error: type mismatch;
 found   : Foo[T]{type B = U}
 required: Foo[T]{type B = U}
    bar.r
        ^

Any insight regarding how Scala determines the types are mismatched?

Foo { type B = U } is incorrect. You're trying to add type refinement to type constructor while you mean adding type refinement to a proper type and considering corresponding type lambda.

Try ({type λ[a] = Foo[a] { type B = U }})#λ

def baz[T, U](bar: Bar[T, ({type λ[a] = Foo[a] { type B = U }})#λ]): Foo[T] { type B = U } = {
  bar.r
}

https://scastie.scala-lang.org/h8lYBBlpS2WdPVTxKF5JMQ

With kind-projector this should be λ[a => Foo[a] { type B = U }]

https://scastie.scala-lang.org/DmytroMitin/I0m86QshRe2k9vee0XPNTw

In Scala 3 [a] =>> Foo[a] { type B = U }

https://scastie.scala-lang.org/aYEEeIm4RgKgDHNwYNeVkA

It's better to introduce Aux-type

trait Foo[A] {
  type B
  val b: B
}
object Foo {
  type Aux[A, B0] = Foo[A] { type B = B0 }
}

and then write Foo.Aux[*, U] with kind-projector

https://scastie.scala-lang.org/aSUZUG6eTk2tDLlgczDGqw