ADDITIONAL SYSTEM INFORMATION :
Issue was observed on macOS Tahoe 26.2, I haven't tried any other system
Tested JDKs from different vendors (OpenJDK, Amazon Corretto, IBM Semeru) and different versions (17-25)
The issue showed up in every case

A DESCRIPTION OF THE PROBLEM :
In the below source code line:
            return new KlassB<>(Klass.class, Klass::new);
fails to compile with
error: incompatible types: cannot infer type arguments for KlassB<>
...
 reason: cannot infer type-variable(s) A,B
        (argument mismatch; cannot infer functional interface descriptor for Factory<A,String>)

--- source code ---

private interface Interface<A> {
        A value();
        interface Factory<A extends Interface<B>,B> {
            Interface<B> create(B obj);
        }
    }

    private record Klass(String value, int otherValue) implements Interface<String> {
        public Klass(String thing) {
            this(thing, -1);
        }
    }

    private interface InterfaceB<A extends Interface<B>,B> {
        Class<A> cls();
        Interface.Factory<A,B> factory();
    }

    private record KlassB<A extends Interface<B>,B>(Class<A> cls, Interface.Factory<A,B> factory) implements InterfaceB<A,B> {
    }

    private interface InterfaceC<A extends Interface<B>,B> {
        InterfaceB<A,B> getInterfaceB();
    }

    private static class KlassC implements InterfaceC<Klass,String> {

        @Override
        public InterfaceB<Klass, String> getInterfaceB() {
            return new KlassB<>(Klass.class, Klass::new);
        }
    }

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
Try to compile attached source code

---------- BEGIN SOURCE ----------
package main;

public class Main {
    public static void main(String[] args) {
        InterfaceC<Klass,String> klassC = new KlassC();
        InterfaceB<Klass, String> interfaceB = klassC.getInterfaceB();
        Interface<String> hehe = interfaceB.factory().create("hehe");
        String value = hehe.value();
        System.out.println(value);
    }

    private interface Interface<A> {
        A value();
        interface Factory<A extends Interface<B>,B> {
            Interface<B> create(B obj);
        }
    }

    private record Klass(String value, int otherValue) implements Interface<String> {
        public Klass(String thing) {
            this(thing, -1);
        }
    }

    private interface InterfaceB<A extends Interface<B>,B> {
        Class<A> cls();
        Interface.Factory<A,B> factory();
    }

    private record KlassB<A extends Interface<B>,B>(Class<A> cls, Interface.Factory<A,B> factory) implements InterfaceB<A,B> {
    }

    private interface InterfaceC<A extends Interface<B>,B> {
        InterfaceB<A,B> getInterfaceB();
    }

    private static class KlassC implements InterfaceC<Klass,String> {

        @Override
        public InterfaceB<Klass, String> getInterfaceB() {
            return new KlassB<>(Klass.class, Klass::new);
        }
    }

}

---------- END SOURCE ----------

CUSTOMER SUBMITTED WORKAROUND :
Provide type arguments manually:
Replace:
            return new KlassB<>(Klass.class, Klass::new);
with:
            return new KlassB<Klass, String>(Klass.class, Klass::new);


FREQUENCY :
ALWAYS