diff --git a/cue/testdata/benchmarks/inlinedisjunction.txtar b/cue/testdata/benchmarks/inlinedisjunction.txtar
index 84562662450..f975a3d5147 100644
--- a/cue/testdata/benchmarks/inlinedisjunction.txtar
+++ b/cue/testdata/benchmarks/inlinedisjunction.txtar
@@ -21,7 +21,7 @@ Allocs: 147
 Retain: 0
 
 Unifications: 17
-Conjuncts:    199
+Conjuncts:    198
 Disjuncts:    76
 -- out/eval --
 (struct){
@@ -60,7 +60,7 @@ diff old new
 -Conjuncts:    13409
 -Disjuncts:    4674
 +Unifications: 17
-+Conjuncts:    199
++Conjuncts:    198
 +Disjuncts:    76
 -- out/eval/stats --
 Leaks:  0
diff --git a/cue/testdata/benchmarks/issue1684.txtar b/cue/testdata/benchmarks/issue1684.txtar
index 0dfe35980b0..e19be93864e 100644
--- a/cue/testdata/benchmarks/issue1684.txtar
+++ b/cue/testdata/benchmarks/issue1684.txtar
@@ -69,7 +69,7 @@ Allocs: 2533
 Retain: 0
 
 Unifications: 707
-Conjuncts:    5878
+Conjuncts:    5373
 Disjuncts:    1102
 -- out/evalalpha --
 (struct){
@@ -159,7 +159,7 @@ diff old new
 -Conjuncts:    2480117
 -Disjuncts:    1064333
 +Unifications: 707
-+Conjuncts:    5878
++Conjuncts:    5373
 +Disjuncts:    1102
 -- diff/-out/evalalpha<==>+out/eval --
 diff old new
diff --git a/cue/testdata/benchmarks/listdedup.txtar b/cue/testdata/benchmarks/listdedup.txtar
index 04666e17a55..c412cdfeef1 100644
--- a/cue/testdata/benchmarks/listdedup.txtar
+++ b/cue/testdata/benchmarks/listdedup.txtar
@@ -40,7 +40,7 @@ Allocs: 163
 Retain: 0
 
 Unifications: 53
-Conjuncts:    431
+Conjuncts:    407
 Disjuncts:    40
 -- out/eval --
 (struct){
@@ -226,7 +226,7 @@ diff old new
 -Conjuncts:    100730
 -Disjuncts:    24097
 +Unifications: 53
-+Conjuncts:    431
++Conjuncts:    407
 +Disjuncts:    40
 -- out/eval/stats --
 Leaks:  0
diff --git a/cue/testdata/cycle/023_reentrance.txtar b/cue/testdata/cycle/023_reentrance.txtar
index 650d71f678b..8390fe29467 100644
--- a/cue/testdata/cycle/023_reentrance.txtar
+++ b/cue/testdata/cycle/023_reentrance.txtar
@@ -70,7 +70,7 @@ Allocs: 70
 Retain: 0
 
 Unifications: 62
-Conjuncts:    227
+Conjuncts:    225
 Disjuncts:    0
 -- out/evalalpha --
 Errors:
@@ -133,7 +133,7 @@ diff old new
 -Conjuncts:    464
 -Disjuncts:    268
 +Unifications: 62
-+Conjuncts:    227
++Conjuncts:    225
 +Disjuncts:    0
 -- diff/-out/evalalpha<==>+out/eval --
 diff old new
diff --git a/cue/testdata/cycle/chain.txtar b/cue/testdata/cycle/chain.txtar
index e617dc376d6..401cd8dbdde 100644
--- a/cue/testdata/cycle/chain.txtar
+++ b/cue/testdata/cycle/chain.txtar
@@ -215,7 +215,7 @@ Allocs: 19986
 Retain: 0
 
 Unifications: 7496
-Conjuncts:    107561
+Conjuncts:    107414
 Disjuncts:    13651
 -- out/evalalpha --
 Errors:
@@ -735,7 +735,7 @@ diff old new
 -Conjuncts:    3175
 -Disjuncts:    1974
 +Unifications: 7496
-+Conjuncts:    107561
++Conjuncts:    107414
 +Disjuncts:    13651
 -- diff/-out/evalalpha<==>+out/eval --
 diff old new
diff --git a/cue/testdata/cycle/inline_non_recursive.txtar b/cue/testdata/cycle/inline_non_recursive.txtar
index ac432da19d7..410805c0de1 100644
--- a/cue/testdata/cycle/inline_non_recursive.txtar
+++ b/cue/testdata/cycle/inline_non_recursive.txtar
@@ -67,7 +67,7 @@ Allocs: 209
 Retain: 0
 
 Unifications: 194
-Conjuncts:    1097
+Conjuncts:    1034
 Disjuncts:    0
 -- out/evalalpha --
 Errors:
@@ -203,7 +203,7 @@ diff old new
 -Conjuncts:    2709
 -Disjuncts:    1414
 +Unifications: 194
-+Conjuncts:    1097
++Conjuncts:    1034
 +Disjuncts:    0
 -- diff/-out/evalalpha<==>+out/eval --
 diff old new
diff --git a/cue/testdata/cycle/issue990.txtar b/cue/testdata/cycle/issue990.txtar
index 3d2953be119..0e33ae0f971 100644
--- a/cue/testdata/cycle/issue990.txtar
+++ b/cue/testdata/cycle/issue990.txtar
@@ -626,7 +626,7 @@ Allocs: 2198
 Retain: 0
 
 Unifications: 219
-Conjuncts:    8714
+Conjuncts:    6776
 Disjuncts:    462
 -- out/evalalpha --
 Errors:
@@ -816,7 +816,7 @@ diff old new
 -Conjuncts:    12056
 -Disjuncts:    3258
 +Unifications: 219
-+Conjuncts:    8714
++Conjuncts:    6776
 +Disjuncts:    462
 -- diff/-out/evalalpha<==>+out/eval --
 diff old new
diff --git a/cue/testdata/eval/closedness.txtar b/cue/testdata/eval/closedness.txtar
index 85f27ea252f..68892a228c0 100644
--- a/cue/testdata/eval/closedness.txtar
+++ b/cue/testdata/eval/closedness.txtar
@@ -766,9 +766,6 @@ Result:
 }
 -- out/evalalpha --
 Errors:
-issue3330.let.ok.0.0.field: conflicting values null and {} (mismatched types null and struct):
-    ./reroot.cue:6:16
-    ./reroot.cue:8:11
 nested.err1.x.b.f: field not allowed:
     ./reroot.cue:114:6
 nested.err2.x.b.g: field not allowed:
@@ -783,31 +780,14 @@ a.q.e: field not allowed:
 issue852.a.Foo: field not allowed:
     ./in.cue:23:16
     ./in.cue:28:5
-issue3330.let.ok.0.0.field.n: field not allowed:
-    ./reroot.cue:9:11
-    ./reroot.cue:9:21
-issue3330.matthew.ok1.out.field.n: field not allowed:
-    ./reroot.cue:16:22
-    ./reroot.cue:16:13
-issue3331.original.ok.0.0.c.d: field not allowed:
-    ./reroot.cue:36:7
-    ./reroot.cue:37:5
 nested.err1.x.#V.c.d: field not allowed:
     ./reroot.cue:122:8
     ./reroot.cue:118:5
 nested.err1.x.#V.c.f: field not allowed:
     ./reroot.cue:122:8
     ./reroot.cue:114:6
-nested.err1.x.#V.c.g: field not allowed:
-    ./reroot.cue:122:8
 nested.err1.x.b.g: field not allowed:
     ./reroot.cue:122:8
-nested.err2.x.c.d: field not allowed:
-    ./reroot.cue:129:6
-    ./reroot.cue:133:4
-nested.err2.x.c.g: field not allowed:
-    ./reroot.cue:129:6
-    ./reroot.cue:137:8
 inline.err1.age1: field not allowed:
     ./reroot.cue:143:8
     ./reroot.cue:145:3
@@ -913,12 +893,9 @@ Result:
       key: (string){ "foo" }
     }
   }
-  issue3330: (_|_){
-    // [eval]
-    let: (_|_){
-      // [eval]
-      ok: (_|_){
-        // [eval]
+  issue3330: (struct){
+    let: (struct){
+      ok: (struct){
         #struct: (#struct){
           let empty#1 = (#struct){
           }
@@ -926,20 +903,19 @@ Result:
             n: (int){ 3 }
           }
         }
-        out: (_|_){
-          // [eval] issue3330.let.ok.0.0.field: conflicting values null and {} (mismatched types null and struct):
-          //     ./reroot.cue:6:16
-          //     ./reroot.cue:8:11
-          // issue3330.let.ok.0.0.field.n: field not allowed:
-          //     ./reroot.cue:9:11
-          //     ./reroot.cue:9:21
+        out: (#list){
+          0: (#struct){
+            let empty#1 = (#struct){
+            }
+            field: (#struct){
+              n: (int){ 3 }
+            }
+          }
         }
       }
     }
-    matthew: (_|_){
-      // [eval]
-      ok1: (_|_){
-        // [eval]
+    matthew: (struct){
+      ok1: (struct){
         #struct: (#struct){
           field: (#struct){
             n: (int){ 3 }
@@ -947,15 +923,9 @@ Result:
           g: (#struct){
           }
         }
-        out: (_|_){
-          // [eval]
-          field: (_|_){
-            // [eval]
-            n: (_|_){
-              // [eval] issue3330.matthew.ok1.out.field.n: field not allowed:
-              //     ./reroot.cue:16:22
-              //     ./reroot.cue:16:13
-            }
+        out: (#struct){
+          field: (#struct){
+            n: (int){ 3 }
           }
           g: (#struct){
           }
@@ -986,14 +956,9 @@ Result:
       }
     }
   }
-  issue3331: (_|_){
-    // [eval]
-    original: (_|_){
-      // [eval]
-      ok: (_|_){
-        // [eval] issue3331.original.ok.0.0.c.d: field not allowed:
-        //     ./reroot.cue:36:7
-        //     ./reroot.cue:37:5
+  issue3331: (struct){
+    original: (struct){
+      ok: (#list){
         #A: (#struct){
           let b#2 = (#struct){
           }
@@ -1001,6 +966,13 @@ Result:
             d: (int){ 1 }
           }
         }
+        0: (#struct){
+          let b#2 = (#struct){
+          }
+          c: (#struct){
+            d: (int){ 1 }
+          }
+        }
       }
     }
     variant1: (struct){
@@ -1167,10 +1139,7 @@ Result:
               //     ./reroot.cue:122:8
               //     ./reroot.cue:114:6
             }
-            g: (_|_){
-              // [eval] nested.err1.x.#V.c.g: field not allowed:
-              //     ./reroot.cue:122:8
-            }
+            g: (int){ 1 }
           }
         }
         #V: (_|_){
@@ -1187,10 +1156,7 @@ Result:
               //     ./reroot.cue:122:8
               //     ./reroot.cue:114:6
             }
-            g: (_|_){
-              // [eval] nested.err1.x.#V.c.g: field not allowed:
-              //     ./reroot.cue:122:8
-            }
+            g: (int){ 1 }
           }
         }
       }
@@ -1233,18 +1199,9 @@ Result:
             //     ./reroot.cue:137:8
           }
         }
-        c: (_|_){
-          // [eval]
-          d: (_|_){
-            // [eval] nested.err2.x.c.d: field not allowed:
-            //     ./reroot.cue:129:6
-            //     ./reroot.cue:133:4
-          }
-          g: (_|_){
-            // [eval] nested.err2.x.c.g: field not allowed:
-            //     ./reroot.cue:129:6
-            //     ./reroot.cue:137:8
-          }
+        c: (#struct){
+          d: (int){ 1 }
+          g: (int){ 1 }
         }
       }
     }
@@ -1282,11 +1239,8 @@ Result:
 diff old new
 --- old
 +++ new
-@@ -1,72 +1,60 @@
+@@ -1,72 +1,40 @@
  Errors:
-+issue3330.let.ok.0.0.field: conflicting values null and {} (mismatched types null and struct):
-+    ./reroot.cue:6:16
-+    ./reroot.cue:8:11
 +nested.err1.x.b.f: field not allowed:
 +    ./reroot.cue:114:6
 +nested.err2.x.b.g: field not allowed:
@@ -1314,15 +1268,6 @@ diff old new
 -    ./in.cue:26:5
 +    ./in.cue:23:16
      ./in.cue:28:5
-+issue3330.let.ok.0.0.field.n: field not allowed:
-+    ./reroot.cue:9:11
-+    ./reroot.cue:9:21
-+issue3330.matthew.ok1.out.field.n: field not allowed:
-+    ./reroot.cue:16:22
-+    ./reroot.cue:16:13
-+issue3331.original.ok.0.0.c.d: field not allowed:
-+    ./reroot.cue:36:7
-+    ./reroot.cue:37:5
  nested.err1.x.#V.c.d: field not allowed:
 -    ./reroot.cue:112:5
 -    ./reroot.cue:114:6
@@ -1346,8 +1291,6 @@ diff old new
 -    ./reroot.cue:123:6
 +    ./reroot.cue:122:8
 +    ./reroot.cue:114:6
-+nested.err1.x.#V.c.g: field not allowed:
-+    ./reroot.cue:122:8
  nested.err1.x.b.g: field not allowed:
 -    ./reroot.cue:112:5
 -    ./reroot.cue:114:6
@@ -1374,12 +1317,6 @@ diff old new
 -    ./reroot.cue:136:5
 -    ./reroot.cue:137:8
 +    ./reroot.cue:122:8
-+nested.err2.x.c.d: field not allowed:
-+    ./reroot.cue:129:6
-+    ./reroot.cue:133:4
-+nested.err2.x.c.g: field not allowed:
-+    ./reroot.cue:129:6
-+    ./reroot.cue:137:8
 +inline.err1.age1: field not allowed:
 +    ./reroot.cue:143:8
 +    ./reroot.cue:145:3
@@ -1399,7 +1336,7 @@ diff old new
        #Items: (#struct){
        }
        #Base: (#struct){
-@@ -76,31 +64,36 @@
+@@ -76,31 +44,36 @@
          }
        }
        #Extended: (#struct){
@@ -1457,7 +1394,7 @@ diff old new
        }
      }
    }
-@@ -110,8 +103,8 @@
+@@ -110,8 +83,8 @@
    #A: (#struct){
      b: (int){ int }
      q: (#struct){
@@ -1467,7 +1404,7 @@ diff old new
      }
    }
    a: (_|_){
-@@ -120,21 +113,17 @@
+@@ -120,21 +93,17 @@
      q: (_|_){
        // [eval]
        c: (int){ 2 }
@@ -1491,7 +1428,7 @@ diff old new
      //     ./in.cue:28:5
      #A: (#struct){
      }
-@@ -142,8 +131,7 @@
+@@ -142,8 +111,7 @@
        // [eval]
        Foo: (_|_){
          // [eval] issue852.a.Foo: field not allowed:
@@ -1501,90 +1438,17 @@ diff old new
          //     ./in.cue:28:5
        }
      }
-@@ -154,13 +142,16 @@
+@@ -154,8 +122,8 @@
        foo: (int){ int }
      }
      d: (#struct){
 -      key: (string){ "foo" }
        foo: (int){ 3 }
--    }
--  }
--  issue3330: (struct){
--    let: (struct){
--      ok: (struct){
 +      key: (string){ "foo" }
-+    }
-+  }
-+  issue3330: (_|_){
-+    // [eval]
-+    let: (_|_){
-+      // [eval]
-+      ok: (_|_){
-+        // [eval]
-         #struct: (#struct){
-           let empty#1 = (#struct){
-           }
-@@ -168,29 +159,36 @@
-             n: (int){ 3 }
-           }
-         }
--        out: (#list){
--          0: (#struct){
--            let empty#1 = (#struct){
--            }
--            field: (#struct){
--              n: (int){ 3 }
--            }
--          }
--        }
--      }
--    }
--    matthew: (struct){
--      ok1: (struct){
--        #struct: (#struct){
--          field: (#struct){
--            n: (int){ 3 }
--          }
--          g: (#struct){
--          }
--        }
--        out: (#struct){
--          field: (#struct){
--            n: (int){ 3 }
-+        out: (_|_){
-+          // [eval] issue3330.let.ok.0.0.field: conflicting values null and {} (mismatched types null and struct):
-+          //     ./reroot.cue:6:16
-+          //     ./reroot.cue:8:11
-+          // issue3330.let.ok.0.0.field.n: field not allowed:
-+          //     ./reroot.cue:9:11
-+          //     ./reroot.cue:9:21
-+        }
-+      }
-+    }
-+    matthew: (_|_){
-+      // [eval]
-+      ok1: (_|_){
-+        // [eval]
-+        #struct: (#struct){
-+          field: (#struct){
-+            n: (int){ 3 }
-+          }
-+          g: (#struct){
-+          }
-+        }
-+        out: (_|_){
-+          // [eval]
-+          field: (_|_){
-+            // [eval]
-+            n: (_|_){
-+              // [eval] issue3330.matthew.ok1.out.field.n: field not allowed:
-+              //     ./reroot.cue:16:22
-+              //     ./reroot.cue:16:13
-+            }
-           }
-           g: (#struct){
-           }
-@@ -211,27 +209,25 @@
+     }
+   }
+   issue3330: (struct){
+@@ -211,11 +179,11 @@
            g: (#struct){
            }
          }
@@ -1593,45 +1457,15 @@ diff old new
 -            n: (int){ 3 }
 -          }
 -          g: (#struct){
--          }
--        }
--      }
--    }
--  }
--  issue3331: (struct){
--    original: (struct){
--      ok: (#list){
--        #A: (#struct){
--          let b#2 = (#struct){
--          }
--          c: (#struct){
--            d: (int){ 1 }
--          }
--        }
--        0: (#struct){
 +        out2: (struct){
 +          field: (struct){
 +            n: (int){ 3 }
 +          }
 +          g: (struct){
-+          }
-+        }
-+      }
-+    }
-+  }
-+  issue3331: (_|_){
-+    // [eval]
-+    original: (_|_){
-+      // [eval]
-+      ok: (_|_){
-+        // [eval] issue3331.original.ok.0.0.c.d: field not allowed:
-+        //     ./reroot.cue:36:7
-+        //     ./reroot.cue:37:5
-+        #A: (#struct){
-           let b#2 = (#struct){
            }
-           c: (#struct){
-@@ -261,8 +257,7 @@
+         }
+       }
+@@ -261,8 +229,7 @@
        }
      }
    }
@@ -1641,7 +1475,7 @@ diff old new
      embed: (struct){
        err1: (struct){
          #A: (#struct){
-@@ -299,17 +294,15 @@
+@@ -299,17 +266,15 @@
              c: (int){ 2 }
            }
          }
@@ -1666,7 +1500,7 @@ diff old new
          X: (struct){
            a: (struct){
              e: (int){ 1 }
-@@ -317,24 +310,13 @@
+@@ -317,24 +282,13 @@
            b: (struct){
            }
          }
@@ -1698,7 +1532,7 @@ diff old new
            }
          }
          #X: (#struct){
-@@ -397,17 +379,11 @@
+@@ -397,17 +351,11 @@
            // [eval]
            f: (_|_){
              // [eval] nested.err1.x.b.f: field not allowed:
@@ -1718,7 +1552,7 @@ diff old new
            }
          }
          v: (_|_){
-@@ -414,26 +390,19 @@
+@@ -414,27 +362,17 @@
            // [eval]
            c: (_|_){
              // [eval]
@@ -1742,6 +1576,7 @@ diff old new
 -              //     ./reroot.cue:118:5
 -              //     ./reroot.cue:122:8
 -              //     ./reroot.cue:123:6
+-            }
 +            d: (_|_){
 +              // [eval] nested.err1.x.#V.c.d: field not allowed:
 +              //     ./reroot.cue:122:8
@@ -1752,13 +1587,11 @@ diff old new
 +              //     ./reroot.cue:122:8
 +              //     ./reroot.cue:114:6
 +            }
-+            g: (_|_){
-+              // [eval] nested.err1.x.#V.c.g: field not allowed:
-+              //     ./reroot.cue:122:8
-             }
++            g: (int){ 1 }
            }
          }
-@@ -441,24 +410,19 @@
+         #V: (_|_){
+@@ -441,25 +379,17 @@
            // [eval]
            c: (_|_){
              // [eval]
@@ -1780,6 +1613,7 @@ diff old new
 -              //     ./reroot.cue:118:5
 -              //     ./reroot.cue:122:8
 -              //     ./reroot.cue:123:6
+-            }
 +            d: (_|_){
 +              // [eval] nested.err1.x.#V.c.d: field not allowed:
 +              //     ./reroot.cue:122:8
@@ -1790,13 +1624,11 @@ diff old new
 +              //     ./reroot.cue:122:8
 +              //     ./reroot.cue:114:6
 +            }
-+            g: (_|_){
-+              // [eval] nested.err1.x.#V.c.g: field not allowed:
-+              //     ./reroot.cue:122:8
-             }
++            g: (int){ 1 }
            }
          }
-@@ -469,14 +433,14 @@
+       }
+@@ -469,14 +399,14 @@
          }
          v: (#struct){
            c: (#struct){
@@ -1815,38 +1647,24 @@ diff old new
            }
          }
        }
-@@ -499,19 +463,27 @@
+@@ -499,19 +429,18 @@
            // [eval]
            g: (_|_){
              // [eval] nested.err2.x.b.g: field not allowed:
 -            //     ./reroot.cue:128:6
 -            //     ./reroot.cue:136:5
--            //     ./reroot.cue:137:8
--          }
--        }
--        c: (#struct){
--          g: (int){ 1 }
+             //     ./reroot.cue:137:8
+           }
+         }
+         c: (#struct){
++          d: (int){ 1 }
+           g: (int){ 1 }
 -          d: (int){ 1 }
 -        }
 -      }
 -    }
 -  }
 -  inline: (struct){
-+            //     ./reroot.cue:137:8
-+          }
-+        }
-+        c: (_|_){
-+          // [eval]
-+          d: (_|_){
-+            // [eval] nested.err2.x.c.d: field not allowed:
-+            //     ./reroot.cue:129:6
-+            //     ./reroot.cue:133:4
-+          }
-+          g: (_|_){
-+            // [eval] nested.err2.x.c.g: field not allowed:
-+            //     ./reroot.cue:129:6
-+            //     ./reroot.cue:137:8
-+          }
 +        }
 +      }
 +    }
@@ -1856,7 +1674,7 @@ diff old new
      #x: (#struct){
        y: (#struct){
          z?: (#struct){
-@@ -519,13 +491,23 @@
+@@ -519,13 +448,23 @@
          }
        }
      }
@@ -1889,8 +1707,17 @@ diff old new
  }
 -- diff/todo/p2 --
 Positions / reordering
+
+indirect.embed.b1.d: should be an error, but is not an error in either version.
 -- diff/todo/p0 --
-Various closedness issues.
+issue3325.ok.broken.items."my-item": should not be an error
+-- diff/todo/p1 --
+Should be an error, but are not:
+  indirect.closed.err1.Y.a.e
+  nested.err1.x.v.c.d
+  nested.err1.x.v.c.f
+-- diff/explanation --
+inline.err*.age*: fields are now correctly not allowed.
 -- out/compile --
 --- embed.cue
 {
diff --git a/cue/testdata/eval/conjuncts.txtar b/cue/testdata/eval/conjuncts.txtar
index e93e4a01a91..a3fea5b67c5 100644
--- a/cue/testdata/eval/conjuncts.txtar
+++ b/cue/testdata/eval/conjuncts.txtar
@@ -76,7 +76,7 @@ Allocs: 235
 Retain: 0
 
 Unifications: 47
-Conjuncts:    475
+Conjuncts:    425
 Disjuncts:    184
 -- out/evalalpha --
 Errors:
@@ -173,7 +173,7 @@ diff old new
 -Conjuncts:    135
 -Disjuncts:    86
 +Unifications: 47
-+Conjuncts:    475
++Conjuncts:    425
 +Disjuncts:    184
 -- diff/-out/evalalpha<==>+out/eval --
 diff old new
diff --git a/cue/testdata/eval/issue3330.txtar b/cue/testdata/eval/issue3330.txtar
index a4730ddbc4d..1275e24c046 100644
--- a/cue/testdata/eval/issue3330.txtar
+++ b/cue/testdata/eval/issue3330.txtar
@@ -50,24 +50,14 @@ Errors:
 eliminated.x: conflicting values null and {} (mismatched types null and struct):
     ./in.cue:21:10
     ./in.cue:22:5
-issue3330.0.0.field: conflicting values null and {} (mismatched types null and struct):
-    ./in.cue:5:15
-    ./in.cue:9:10
-issue3330.0.0.field.n: field not allowed:
-    ./in.cue:10:10
-    ./in.cue:10:20
 eliminated.x.n: field not allowed:
     ./in.cue:23:5
     ./in.cue:23:16
-simplified.out.field.n: field not allowed:
-    ./in.cue:31:21
-    ./in.cue:31:12
 
 Result:
 (_|_){
   // [eval]
-  issue3330: (_|_){
-    // [eval]
+  issue3330: (struct){
     #A: (#struct){
       let empty#1 = (#struct){
       }
@@ -75,13 +65,14 @@ Result:
         n: (int){ 3 }
       }
     }
-    out: (_|_){
-      // [eval] issue3330.0.0.field: conflicting values null and {} (mismatched types null and struct):
-      //     ./in.cue:5:15
-      //     ./in.cue:9:10
-      // issue3330.0.0.field.n: field not allowed:
-      //     ./in.cue:10:10
-      //     ./in.cue:10:20
+    out: (#list){
+      0: (#struct){
+        let empty#1 = (#struct){
+        }
+        field: (#struct){
+          n: (int){ 3 }
+        }
+      }
     }
   }
   eliminated: (_|_){
@@ -110,8 +101,7 @@ Result:
       //     ./in.cue:23:16
     }
   }
-  simplified: (_|_){
-    // [eval]
+  simplified: (struct){
     #struct: (#struct){
       field: (#struct){
         n: (int){ 3 }
@@ -119,15 +109,9 @@ Result:
       g: (#struct){
       }
     }
-    out: (_|_){
-      // [eval]
-      field: (_|_){
-        // [eval]
-        n: (_|_){
-          // [eval] simplified.out.field.n: field not allowed:
-          //     ./in.cue:31:21
-          //     ./in.cue:31:12
-        }
+    out: (#struct){
+      field: (#struct){
+        n: (int){ 3 }
       }
       g: (#struct){
       }
@@ -138,7 +122,7 @@ Result:
 diff old new
 --- old
 +++ new
-@@ -1,18 +1,25 @@
+@@ -1,11 +1,8 @@
  Errors:
 -eliminated.x: 2 errors in empty disjunction:
 -eliminated.x: conflicting values null and {n:3} (mismatched types null and struct):
@@ -146,53 +130,13 @@ diff old new
 +    ./in.cue:21:10
      ./in.cue:22:5
 -    ./in.cue:23:14
-+issue3330.0.0.field: conflicting values null and {} (mismatched types null and struct):
-+    ./in.cue:5:15
-+    ./in.cue:9:10
-+issue3330.0.0.field.n: field not allowed:
-+    ./in.cue:10:10
-+    ./in.cue:10:20
  eliminated.x.n: field not allowed:
 -    ./in.cue:21:10
 -    ./in.cue:22:14
      ./in.cue:23:5
      ./in.cue:23:16
-+simplified.out.field.n: field not allowed:
-+    ./in.cue:31:21
-+    ./in.cue:31:12
  
- Result:
- (_|_){
-   // [eval]
--  issue3330: (struct){
-+  issue3330: (_|_){
-+    // [eval]
-     #A: (#struct){
-       let empty#1 = (#struct){
-       }
-@@ -20,14 +27,13 @@
-         n: (int){ 3 }
-       }
-     }
--    out: (#list){
--      0: (#struct){
--        let empty#1 = (#struct){
--        }
--        field: (#struct){
--          n: (int){ 3 }
--        }
--      }
-+    out: (_|_){
-+      // [eval] issue3330.0.0.field: conflicting values null and {} (mismatched types null and struct):
-+      //     ./in.cue:5:15
-+      //     ./in.cue:9:10
-+      // issue3330.0.0.field.n: field not allowed:
-+      //     ./in.cue:10:10
-+      //     ./in.cue:10:20
-     }
-   }
-   eliminated: (_|_){
-@@ -35,36 +41,29 @@
+@@ -35,31 +32,23 @@
      #empty: (#struct){
      }
      x: (_|_){
@@ -225,47 +169,15 @@ diff old new
 -      // eliminated.x.n: field not allowed:
 -      //     ./in.cue:21:10
 -      //     ./in.cue:22:14
--      //     ./in.cue:23:5
--      //     ./in.cue:23:16
--    }
--  }
--  simplified: (struct){
 +      // [eval] eliminated.x: conflicting values null and {} (mismatched types null and struct):
 +      //     ./in.cue:21:10
 +      //     ./in.cue:22:5
 +      // eliminated.x.n: field not allowed:
-+      //     ./in.cue:23:5
-+      //     ./in.cue:23:16
-+    }
-+  }
-+  simplified: (_|_){
-+    // [eval]
-     #struct: (#struct){
-       field: (#struct){
-         n: (int){ 3 }
-@@ -72,9 +71,15 @@
-       g: (#struct){
-       }
+       //     ./in.cue:23:5
+       //     ./in.cue:23:16
      }
--    out: (#struct){
--      field: (#struct){
--        n: (int){ 3 }
-+    out: (_|_){
-+      // [eval]
-+      field: (_|_){
-+        // [eval]
-+        n: (_|_){
-+          // [eval] simplified.out.field.n: field not allowed:
-+          //     ./in.cue:31:21
-+          //     ./in.cue:31:12
-+        }
-       }
-       g: (#struct){
-       }
--- diff/todo/p1 --
-References of structs within a definition that are usually allowed are
-now triggered by refering to a definition outside of that definition.
-Both "issue3330" and "simplified" should not have any errors.
+-- diff/todo/p3 --
+Small differences in error output. Empty disjunction error.
 -- out/eval --
 Errors:
 eliminated.x: 2 errors in empty disjunction:
diff --git a/cue/testdata/eval/v0.7.txtar b/cue/testdata/eval/v0.7.txtar
index ab62a6307ff..d550f4b351d 100644
--- a/cue/testdata/eval/v0.7.txtar
+++ b/cue/testdata/eval/v0.7.txtar
@@ -690,7 +690,7 @@ Allocs: 288
 Retain: 0
 
 Unifications: 258
-Conjuncts:    2303
+Conjuncts:    1989
 Disjuncts:    44
 -- out/evalalpha --
 Errors:
@@ -1148,7 +1148,7 @@ diff old new
 -Conjuncts:    1619
 -Disjuncts:    436
 +Unifications: 258
-+Conjuncts:    2303
++Conjuncts:    1989
 +Disjuncts:    44
 -- diff/-out/evalalpha<==>+out/eval --
 diff old new
diff --git a/internal/core/adt/composite.go b/internal/core/adt/composite.go
index 35f2ea771ef..1559a3516c7 100644
--- a/internal/core/adt/composite.go
+++ b/internal/core/adt/composite.go
@@ -295,6 +295,12 @@ func (v *Vertex) rootCloseContext(ctx *OpContext) *closeContext {
 		}
 		v.cc.incDependent(ctx, ROOT, nil) // matched in REF(decrement:nodeDone)
 	}
+	v.cc.origin = v.cc
+	if p := v.Parent; p != nil {
+		pcc := p.rootCloseContext(ctx)
+		v.cc.origin = pcc.origin
+	}
+
 	return v.cc
 }
 
diff --git a/internal/core/adt/conjunct.go b/internal/core/adt/conjunct.go
index 51f313d8b84..b4ecdd0e856 100644
--- a/internal/core/adt/conjunct.go
+++ b/internal/core/adt/conjunct.go
@@ -410,26 +410,85 @@ func (n *nodeContext) scheduleVertexConjuncts(c Conjunct, arc *Vertex, closeInfo
 		}
 	}
 
-	if d, ok := arc.BaseValue.(*Disjunction); ok && false {
-		n.scheduleConjunct(MakeConjunct(c.Env, d, closeInfo), closeInfo)
-	} else {
-		for i := 0; i < len(arc.Conjuncts); i++ {
-			c := arc.Conjuncts[i]
+	// TODO(perf): buffer or use stack.
+	var a []*closeContext
+	a = appendPrefix(a, closeInfo.cc)
+
+	// Use explicit index in case Conjuncts grows during iteration.
+	for i := 0; i < len(arc.Conjuncts); i++ {
+		c := arc.Conjuncts[i]
+		n.insertAndSkipConjuncts(a, c, closeInfo)
+	}
 
-			// Note that we are resetting the tree here. We hereby assume that
-			// closedness conflicts resulting from unifying the referenced arc were
-			// already caught there and that we can ignore further errors here.
-			// c.CloseInfo = closeInfo
+	if state := arc.getBareState(n.ctx); state != nil {
+		n.toComplete = true
+	}
+}
 
-			// We can use the original, but we know it will not be used
+// appendPrefix records the closeContext from the root of the current node to
+// cc by walking up the parent chain and storing the results ancestor first.
+// This is used to split conjunct trees into a forest of little trees.
+func appendPrefix(a []*closeContext, cc *closeContext) []*closeContext {
+	if cc.parent != nil {
+		a = appendPrefix(a, cc.parent)
+	}
+	a = append(a, cc)
+	return a
+}
 
-			n.scheduleConjunct(c, closeInfo)
-		}
+// insertAndSkipConjuncts analyzes the conjunct tree represented by c and splits
+// it into branches from the point where it deviates from the conjunct branch
+// represented by skip.
+//
+// TODO(evalv3): Consider this example:
+//
+//	#A: {
+//		b: {} // error only reported here.
+//		c: b & {
+//			// error (g not allowed) not reported here, as it would be okay if b
+//			// were valid. Instead, it is reported at b only. This is conform
+//			// the spec.
+//			d: 1
+//		}
+//	}
+//	x: #A
+//	x: b: g: 1
+//
+// We could also report an error at g by tracing if a conjunct crosses a isDef
+// boundary between the root of c and the cc of the conjunct.
+// Not doing so might have an effect on the outcome of disjunctions. This may be
+// okay (ideally closedness is not modal), but something to consider. For now,
+// we should probably copy whatever v2 was doing.
+func (n *nodeContext) insertAndSkipConjuncts(skip []*closeContext, c Conjunct, id CloseInfo) {
+	if c.CloseInfo.cc == nil {
+		n.scheduleConjunct(c, id)
+		return
 	}
 
-	if state := arc.getBareState(n.ctx); state != nil {
-		n.toComplete = true
+	root := c.CloseInfo.cc.origin
+
+	// TODO(perf): closeContexts should be exact prefixes. So instead of
+	// searching the list, we could test them incrementally. This seems more
+	// robust for now as the data structure might slightly change and cause
+	// disalignment.
+	for _, s := range skip {
+		if root == s.origin {
+			switch x := c.Elem().(type) {
+			case *ConjunctGroup:
+				for _, c := range *x {
+					n.insertAndSkipConjuncts(skip, c, id)
+				}
+
+			default:
+				// TODO: do leaf conjuncts that match need different treatment
+				// from those that don't? Right now, we treat them the same.
+				n.scheduleConjunct(c, id)
+			}
+			return
+		}
 	}
+
+	n.scheduleConjunct(c, id)
 }
 
 func (n *nodeContext) addNotify2(v *Vertex, c CloseInfo) []receiver {
diff --git a/internal/core/adt/debug.go b/internal/core/adt/debug.go
index 966a2ccde51..4ecfb219763 100644
--- a/internal/core/adt/debug.go
+++ b/internal/core/adt/debug.go
@@ -648,6 +648,15 @@ func (m *mermaidContext) pstr(cc *closeContext) string {
 	flags.WriteByte(cc.arcType.String()[0])
 	io.Copy(w, flags)
 
+	// Show the origin of the closeContext.
+	indentOnNewline(w, 3)
+	ptr = fmt.Sprintf("%p", cc.origin)
+	if cc.origin != nil {
+		ptr = ptr[len(ptr)-sigPtrLen:]
+	}
+	w.WriteString("R:")
+	w.WriteString(ptr)
+
 	w.WriteString(close)
 
 	switch {
diff --git a/internal/core/adt/fields.go b/internal/core/adt/fields.go
index 46d0e7da4e3..30f36bab52b 100644
--- a/internal/core/adt/fields.go
+++ b/internal/core/adt/fields.go
@@ -157,6 +157,11 @@ type closeContext struct {
 	// Used to recursively insert Vertices.
 	parent *closeContext
 
+	// points to the closeContext this closeContext originates when following
+	// the reverse or ARC/EVAL dependencies corresponding to parent vertices.
+	// This is used to compute the prefix path when resolving a reference.
+	origin *closeContext
+
 	// overlay is used to temporarily link a closeContext to its "overlay" copy,
 	// as it is used in a corresponding disjunction.
 	overlay *closeContext
@@ -387,6 +392,7 @@ func (cc *closeContext) getKeyedCC(ctx *OpContext, key *closeContext, c CycleInf
 	}, mode, false, checkClosed)
 
 	arc := &closeContext{
+		origin:          cc.origin,
 		generation:      cc.generation,
 		parent:          parent,
 		parentConjuncts: parent,
@@ -484,6 +490,9 @@ func (c CloseInfo) spawnCloseContext(ctx *OpContext, t closeNodeType) (CloseInfo
 		parentConjuncts: cc,
 	}
 
+	// By definition, a spawned closeContext is its own root.
+	c.cc.origin = c.cc
+
 	cc.incDependent(ctx, PARENT, c.cc) // REF(decrement: spawn)
 
 	switch t {
diff --git a/internal/core/adt/overlay.go b/internal/core/adt/overlay.go
index e221d02dbc7..54d9df9cb0b 100644
--- a/internal/core/adt/overlay.go
+++ b/internal/core/adt/overlay.go
@@ -264,6 +264,8 @@ func (ctx *overlayContext) allocCC(cc *closeContext) *closeContext {
 
 	o := &closeContext{generation: ctx.generation}
 	cc.overlay = o
+	// TODO(evalv3): is it okay to use the same origin in overlays?
+	o.origin = cc.origin
 
 	if cc.parent != nil {
 		o.parent = ctx.allocCC(cc.parent)
@@ -319,6 +321,7 @@ func (ctx *overlayContext) initCloneCC(x *closeContext) {
 		o.src = o.parent.src
 	}
 
+	o.origin = x.origin
 	o.conjunctCount = x.conjunctCount
 	o.disjunctCount = x.disjunctCount
 	o.isDef = x.isDef