Unexpected inferred type from wildcard subtyping constraint

This should compile, does not:

    interface I<X> {}
    <T> T make(I<T> ts) { return null; }
    <E extends CharSequence> E take(I<? extends E> arg) { return null; }

    void test(I<I<? extends String>> arg) {
        take(make(arg)).intern();
    }

Inference succeeds, with E=CharSequence. The call to 'intern' then fails. Expected: infer E=String.

Walking through expected inference behavior:

Applicability inference for 'make':
I<I<? extends String>> --> I<t>
{ t = I<? extends String> }

Applicability inference for 'take':
make(arg) --> I<? extends e>
t --> I<? extends e>
{ t = I<? extends String>, t <: I<? extends e>, e <: CharSequence }

Incorporation:
I<? extends String> <: I<? extends e>
{ t = I<? extends String>, t <: I<? extends e>, String <: e, e <: CharSequence }

Resolution:
e = String, t = I<? extends String>