diff --git a/src/gf.c b/src/gf.c
index ae4a1413b7849..4c8ae077192c1 100644
--- a/src/gf.c
+++ b/src/gf.c
@@ -2421,6 +2421,12 @@ static int ml_matches_visitor(jl_typemap_entry_t *ml, struct typemap_intersectio
                 closure->max_valid = ml->max_world;
         }
     }
+    // In some corner cases type intersection is conservative and returns something
+    // for intersect(A, B) even though A is a dispatch tuple and !(A <: B).
+    // For dispatch purposes in such a case we know there's no match. This check
+    // fixes issue #30394.
+    if (jl_is_dispatch_tupletype(closure->match.type) && !closure->match.issubty)
+        return 1;
     // a method is shadowed if type <: S <: m->sig where S is the
     // signature of another applicable method
     /*
diff --git a/test/compiler/inference.jl b/test/compiler/inference.jl
index a3066f99b939d..c6e59dc51412e 100644
--- a/test/compiler/inference.jl
+++ b/test/compiler/inference.jl
@@ -2151,3 +2151,24 @@ g30098() = (h30098(:f30098); 4)
 h30098(f) = getfield(@__MODULE__, f)()
 @test @inferred(g30098()) == 4 # make sure that this
 @test @inferred(f30098()) == 3 # doesn't pollute the inference cache of this
+
+# issue #30394
+mutable struct Base30394
+    a::Int
+end
+
+mutable struct Foo30394
+    foo_inner::Base30394
+    Foo30394() = new(Base30394(1))
+end
+
+mutable struct Foo30394_2
+    foo_inner::Foo30394
+    Foo30394_2() = new(Foo30394())
+end
+
+f30394(foo::T1, ::Type{T2}) where {T2, T1 <: T2} = foo
+
+f30394(foo, T2) = f30394(foo.foo_inner, T2)
+
+@test Base.return_types(f30394, (Foo30394_2, Type{Base30394})) == Any[Base30394]