Reproduce #3560

Part of #3560

crates/compiler/test_mono/src/tests.rs

@@ -1884,3 +1884,19 @@ fn encode_derived_tag_two_payloads_string() {
         "#
     )
 }
+
+#[mono_test]
+fn issue_3560_nested_tag_union() {
+    indoc!(
+        r#"
+        app "test"
+            imports [Encode.{ toEncoder }, Json]
+            provides [main] to "./platform"
+
+        main =
+            when Wrapper (Payload "err") is
+                Wrapper (Payload str) -> str
+                Wrapper (AlternatePayload str) -> str
+        "#
+    )
+}