diff --git a/compiler/src/dotty/tools/dotc/cc/CaptureSet.scala b/compiler/src/dotty/tools/dotc/cc/CaptureSet.scala
index a53c4f041a1d..876730dbfc51 100644
--- a/compiler/src/dotty/tools/dotc/cc/CaptureSet.scala
+++ b/compiler/src/dotty/tools/dotc/cc/CaptureSet.scala
@@ -1644,7 +1644,8 @@ object CaptureSet:
         else this(acc, parent)
 
       def abstractTypeCase(acc: CaptureSet, t: TypeRef, upperBound: Type) =
-        if includeTypevars && upperBound.isExactlyAny then fresh(Origin.DeepCS(t))
+        if t.derivesFrom(defn.Caps_CapSet) then t.singletonCaptureSet
+        else if includeTypevars && upperBound.isExactlyAny then fresh(Origin.DeepCS(t))
         else this(acc, upperBound)
 
     collect(CaptureSet.empty, tp)
diff --git a/tests/neg-custom-args/captures/i24309-region-orig.check b/tests/neg-custom-args/captures/i24309-region-orig.check
new file mode 100644
index 000000000000..31a1af06b6b9
--- /dev/null
+++ b/tests/neg-custom-args/captures/i24309-region-orig.check
@@ -0,0 +1,9 @@
+-- Error: tests/neg-custom-args/captures/i24309-region-orig.scala:17:36 ------------------------------------------------
+17 |    val x = r1.subregion[Ref^{r1.R}]: r2 =>  // error, limitation
+   |            ^
+   |            Local reach capability r1.R leaks into capture scope of enclosing function.
+   |            You could try to abstract the capabilities referred to by r1.R in a capset variable.
+18 |      var a: Ref^{r1.R} = r1.alloc(0)
+19 |      var b: Ref^{r2.R} = r2.alloc(0)
+20 |      val c: Ref^{r1.R} = b
+21 |      a
diff --git a/tests/neg-custom-args/captures/i24309-region-orig.scala b/tests/neg-custom-args/captures/i24309-region-orig.scala
new file mode 100644
index 000000000000..d12eb1f98c39
--- /dev/null
+++ b/tests/neg-custom-args/captures/i24309-region-orig.scala
@@ -0,0 +1,22 @@
+import language.experimental.captureChecking
+import caps.*
+class Ref(private var x: Int):
+  def get = x
+  def set(y: Int) = x = y
+trait Region extends SharedCapability:
+  r: Region^ =>
+    type R^
+    def alloc(x: Int): Ref^{R} = Ref(x)
+    def subregion[T](f: (Region { type R >: r.R }) => T): T =
+      class R2 extends Region:
+        type R = r.R
+      f(new R2)
+def withRegion[T](f: Region => T): T = f(new Region {})
+@main def main() =
+  withRegion: r1 =>
+    val x = r1.subregion[Ref^{r1.R}]: r2 =>  // error, limitation
+      var a: Ref^{r1.R} = r1.alloc(0)
+      var b: Ref^{r2.R} = r2.alloc(0)
+      val c: Ref^{r1.R} = b
+      a
+    0
diff --git a/tests/neg-custom-args/captures/i24309a.check b/tests/neg-custom-args/captures/i24309a.check
new file mode 100644
index 000000000000..251d9bac3ccb
--- /dev/null
+++ b/tests/neg-custom-args/captures/i24309a.check
@@ -0,0 +1,4 @@
+-- Error: tests/neg-custom-args/captures/i24309a.scala:4:34 ------------------------------------------------------------
+4 |def runOps2[C^](): Unit = runOps[{C}](???)  // error
+  |                                  ^
+  |                                  Capture set parameter C leaks into capture scope of method runOps2.
diff --git a/tests/neg-custom-args/captures/i24309a.scala b/tests/neg-custom-args/captures/i24309a.scala
new file mode 100644
index 000000000000..9f626f90eb10
--- /dev/null
+++ b/tests/neg-custom-args/captures/i24309a.scala
@@ -0,0 +1,4 @@
+import language.experimental.captureChecking
+def runOps[C^](ops: List[() ->{C} Unit]): Unit = ???
+def runOps1[C^](xs: Object^{C}): Unit = runOps[{C}](???)  // ok
+def runOps2[C^](): Unit = runOps[{C}](???)  // error
diff --git a/tests/pos-custom-args/captures/i24309-region.scala b/tests/pos-custom-args/captures/i24309-region.scala
new file mode 100644
index 000000000000..37d25702a6c8
--- /dev/null
+++ b/tests/pos-custom-args/captures/i24309-region.scala
@@ -0,0 +1,34 @@
+import language.experimental.captureChecking
+import language.experimental.separationChecking
+
+import caps.*
+
+object Regions:
+  class Ref(private var x: Int):
+    def get = x
+    def set(y: Int) = x = y
+
+  trait Region[R^] extends SharedCapability:
+    region: Region[R]^ =>
+      def alloc(value: Int): Ref^{R} = Ref(value)
+
+      def subregion[T](f: [R2^ >: R] => (Region[R2]) => T): T =
+        val r = new Region[R] {}
+        f(r)
+
+
+  object Region:
+    def apply[T](f: [R^] => Region[R] => T): T =
+      val r = new Region[{}] {}
+      f(r)
+
+  @main def main() =
+    import Region.*
+    Region: [R^] =>
+     r1 =>
+      val x = r1.subregion: [R2^ >: R] =>
+       r2 =>
+        val a = r1.alloc(0)
+        val b = r2.alloc(0)
+        a
+      0
diff --git a/tests/pos-custom-args/captures/i24309.scala b/tests/pos-custom-args/captures/i24309.scala
new file mode 100644
index 000000000000..8847037c9499
--- /dev/null
+++ b/tests/pos-custom-args/captures/i24309.scala
@@ -0,0 +1,5 @@
+import language.experimental.captureChecking
+trait Region[R^]
+def id[T](x: T): T = ???
+def foo[R^](r: Region[R]): Unit =
+  val t2 = () => id[Object^{R}](???)  // was error, now ok
diff --git a/tests/pos-custom-args/captures/i24309b.scala b/tests/pos-custom-args/captures/i24309b.scala
new file mode 100644
index 000000000000..3648c9c00409
--- /dev/null
+++ b/tests/pos-custom-args/captures/i24309b.scala
@@ -0,0 +1,6 @@
+import language.experimental.captureChecking
+def runOps[C^](ops: List[() ->{C} Unit]): Unit = ops.foreach(_())  // ok
+trait Ops[C^] { def toList: List[() ->{C} Unit] }
+def runOpsAlt1[C1^](ops: Ops[C1]): Unit = runOps[{C1}](???)  // was error, now ok
+def runOpsAlt2[C2^](ops: Ops[{}]^{C2}): Unit = runOps[{C2}](???)  // ok
+def runOpsAlt3[C3^](ops: Ops[C3]^{C3}): Unit = runOps[{C3}](???)  // was error, no ok