diff --git a/compiler/gen/src/llvm/refcounting.rs b/compiler/gen/src/llvm/refcounting.rs
index cb1fa0a5a5..80eeee2ce6 100644
--- a/compiler/gen/src/llvm/refcounting.rs
+++ b/compiler/gen/src/llvm/refcounting.rs
@@ -724,7 +724,7 @@ fn modify_refcount_layout_build_function<'a, 'ctx, 'env>(
 
         Layout::RecursivePointer => match when_recursive {
             WhenRecursive::Unreachable => {
-                unreachable!("recursion pointers should never be hashed directly")
+                unreachable!("recursion pointers cannot be in/decremented directly")
             }
             WhenRecursive::Loop(union_layout) => {
                 let layout = Layout::Union(*union_layout);
diff --git a/compiler/mono/src/layout.rs b/compiler/mono/src/layout.rs
index 5a266857ad..79176a02b5 100644
--- a/compiler/mono/src/layout.rs
+++ b/compiler/mono/src/layout.rs
@@ -1113,7 +1113,6 @@ fn layout_from_flat_type<'a>(
             // That means none of the optimizations for enums or single tag tag unions apply
 
             let rec_var = subs.get_root_key_without_compacting(rec_var);
-            env.insert_seen(rec_var);
             let mut tag_layouts = Vec::with_capacity_in(tags.len(), arena);
 
             // VERY IMPORTANT: sort the tags
@@ -1131,6 +1130,7 @@ fn layout_from_flat_type<'a>(
                 }
             }
 
+            env.insert_seen(rec_var);
             for (index, (_name, variables)) in tags_vec.into_iter().enumerate() {
                 if matches!(nullable, Some(i) if i == index as i64) {
                     // don't add the
@@ -1163,6 +1163,7 @@ fn layout_from_flat_type<'a>(
 
                 tag_layouts.push(tag_layout.into_bump_slice());
             }
+            env.remove_seen(rec_var);
 
             let union_layout = if let Some(tag_id) = nullable {
                 match tag_layouts.into_bump_slice() {
@@ -1186,8 +1187,6 @@ fn layout_from_flat_type<'a>(
                 UnionLayout::Recursive(tag_layouts.into_bump_slice())
             };
 
-            env.remove_seen(rec_var);
-
             Ok(Layout::Union(union_layout))
         }
         EmptyTagUnion => {
@@ -1422,10 +1421,6 @@ pub fn union_sorted_tags_help<'a>(
         seen: MutSet::default(),
     };
 
-    if let Some(rec_var) = opt_rec_var {
-        env.insert_seen(rec_var);
-    }
-
     match tags_vec.len() {
         0 => {
             // trying to instantiate a type with no values
diff --git a/compiler/test_mono/generated/let_with_record_pattern_list.txt b/compiler/test_mono/generated/let_with_record_pattern_list.txt
index d7763fed7c..1b7ae1ec45 100644
--- a/compiler/test_mono/generated/let_with_record_pattern_list.txt
+++ b/compiler/test_mono/generated/let_with_record_pattern_list.txt
@@ -6,5 +6,6 @@ procedure Test.0 ():
     let Test.5 = 3.14f64;
     let Test.3 = Struct {Test.4, Test.5};
     let Test.1 = Index 0 Test.3;
-    decref Test.3;
+    inc Test.1;
+    dec Test.3;
     ret Test.1;
diff --git a/compiler/test_mono/generated/peano2.txt b/compiler/test_mono/generated/peano2.txt
index 65764f2fe8..03ba41ecf0 100644
--- a/compiler/test_mono/generated/peano2.txt
+++ b/compiler/test_mono/generated/peano2.txt
@@ -12,10 +12,11 @@ procedure Test.0 ():
     let Test.17 = lowlevel Eq Test.15 Test.16;
     if Test.17 then
         let Test.11 = Index 1 Test.2;
+        inc Test.11;
+        dec Test.2;
         let Test.12 = 0i64;
         let Test.13 = Index 0 Test.11;
         dec Test.11;
-        decref Test.2;
         let Test.14 = lowlevel Eq Test.12 Test.13;
         if Test.14 then
             let Test.7 = 1i64;
@@ -24,5 +25,6 @@ procedure Test.0 ():
             let Test.9 = 0i64;
             ret Test.9;
     else
+        dec Test.2;
         let Test.10 = 0i64;
         ret Test.10;