diff --git a/compiler/semtypinst.nim b/compiler/semtypinst.nim
index 945667a81987..0a0ac1704206 100644
--- a/compiler/semtypinst.nim
+++ b/compiler/semtypinst.nim
@@ -499,10 +499,20 @@ proc propagateFieldFlags(t: PType, n: PNode) =
 
 proc replaceTypeVarsTAux(cl: var TReplTypeVars, t: PType): PType =
   template bailout =
-    if t.sym != nil and sfGeneratedType in t.sym.flags:
-      # Only consider the recursion limit if the symbol is a type with generic
-      # parameters that have not been explicitly supplied, typechecking should
-      # terminate when generic parameters are explicitly supplied.
+    if (t.sym == nil) or (t.sym != nil and sfGeneratedType in t.sym.flags):
+      # In the first case 't.sym' can be 'nil' if the type is a ref/ptr, see
+      # issue https://github.com/nim-lang/Nim/issues/20416 for more details.
+      # Fortunately for us this works for now because partial ref/ptr types are
+      # not allowed in object construction, eg.
+      #   type
+      #     Container[T] = ...
+      #     O = object
+      #      val: ref Container
+      #
+      # In the second case only consider the recursion limit if the symbol is a
+      # type with generic parameters that have not been explicitly supplied,
+      # typechecking should terminate when generic parameters are explicitly
+      # supplied.
       if cl.recursionLimit > 100:
         # bail out, see bug #2509. But note this caching is in general wrong,
         # look at this example where TwoVectors should not share the generic
diff --git a/tests/generics/tgenerics_issues.nim b/tests/generics/tgenerics_issues.nim
index db7a1656936a..3068a22f25be 100644
--- a/tests/generics/tgenerics_issues.nim
+++ b/tests/generics/tgenerics_issues.nim
@@ -872,3 +872,23 @@ block: # Ensure no segfault from constraint
     a = Regex[int]()
     b = Regex[bool]()
     c = MyOtherType[seq[int]]()
+
+block: # https://github.com/nim-lang/Nim/issues/20416
+  type
+    Item[T] = object
+      link:ptr Item[T]
+      data:T
+
+    KVSeq[A,B] = seq[(A,B)]
+
+    MyTable[A,B] = object
+      data: KVSeq[A,B]
+
+    Container[T] = object
+      a: MyTable[int,ref Item[T]]
+
+  proc p1(sg:Container) = discard # Make sure that a non parameterized 'Container' argument still compiles
+
+  proc p2[T](sg:Container[T]) = discard
+  var v : Container[int]
+  p2(v)