Welcome to Scala 2.12.0 (Java HotSpot(TM) 64-Bit Server VM, Java 1.8.0_102).
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scala> trait InvariantContainer[T0] {
     |   type T = T0
     | }
defined trait InvariantContainer

scala> type OptionalContainer[Container <: InvariantContainer[_]] = InvariantContainer[Option[Container#T]]
defined type alias OptionalContainer

scala> def expand(x: OptionalContainer[InvariantContainer[Int]]): InvariantContainer[Option[InvariantContainer[Int]#T]] = x
<console>:13: error: type mismatch;
 found   : OptionalContainer[InvariantContainer[Int]]
    (which expands to)  InvariantContainer[Option[_$1]]
 required: InvariantContainer[Option[Int]]
       def expand(x: OptionalContainer[InvariantContainer[Int]]): InvariantContainer[Option[InvariantContainer[Int]#T]] = x
                                                                                                                          ^

scala> def expand(x: OptionalContainer[InvariantContainer[Int]]): InvariantContainer[Option[Int]] = x
<console>:13: error: type mismatch;
 found   : OptionalContainer[InvariantContainer[Int]]
    (which expands to)  InvariantContainer[Option[_$1]]
 required: InvariantContainer[Option[Int]]
       def expand(x: OptionalContainer[InvariantContainer[Int]]): InvariantContainer[Option[Int]] = x
                                                                                                    ^