@hg_ just showed me this, pretty odd: can't create a subInstance Root as a val, but can as an object

veryOdd.scala

import scalaz._, Scalaz._

trait Root {
  type FT[A[+_], +B]
  val FT: MonadTrans[FT]
  def value: FT[Id, Unit]
}

trait Child extends Root { child =>
  // error: an't existentially abstract over parameterized type A
  /*val subInstance = new Root {
    type FT[A[+_], +B] = child.FT[A, B]
    val FT = child.FT
    def value = FT.liftM(().point[Id])
  }*/

  // totally fine
  object subInstance extends Root {
    type FT[A[+_], +B] = child.FT[A, B]
    val FT = child.FT
    def value = FT.liftM(().point[Id])
  }

  def value = subInstance.value
}

import language.higherKinds

trait MonadTrans[F[_[+_], +_]] {
  def liftM[A[+_], B](a: A[B]): F[A, B]
}

trait Root {
  type FT[A[+_], +B]
  val FT: MonadTrans[FT]
  def value: FT[List, Unit]
}

trait Child extends Root { child =>
  // error: can't existentially abstract over parameterized type A
  val subInstance = new Root {
    type FT[A[+_], +B] = child.FT[A, B]
    val FT = child.FT
    def value = FT.liftM(List[Unit]())
  }

  // totally fine
  object subInstance extends Root {
    type FT[A[+_], +B] = child.FT[A, B]
    val FT = child.FT
    def value = FT.liftM(List[Unit]())
  }

  def value = subInstance.value
}

Oh yeah, and were FT to be a unary type constructor e.g. FT[+A] the val works fine

Eero found the following explanation:

http://stackoverflow.com/questions/3122398/cant-existentially-abstract-over-parameterized-type

So, it isn't a bug, it is documented behaviour.