diff --git a/lib/compress.js b/lib/compress.js
index 58f083226d2..903558585ef 100644
--- a/lib/compress.js
+++ b/lib/compress.js
@@ -7251,16 +7251,19 @@ Compressor.prototype.compress = function(node) {
                 node.name = null;
             }
             if (node instanceof AST_Lambda) {
-                descend_scope();
                 if (drop_funcs && node !== self && node instanceof AST_LambdaDefinition) {
                     var def = node.name.definition();
                     if (!(def.id in in_use_ids)) {
                         log(node.name, "Dropping unused function {name}");
                         def.eliminated++;
-                        if (parent instanceof AST_ExportDefault) return to_func_expr(node, true);
+                        if (parent instanceof AST_ExportDefault) {
+                            descend_scope();
+                            return to_func_expr(node, true);
+                        }
                         return in_list ? List.skip : make_node(AST_EmptyStatement, node);
                     }
                 }
+                descend_scope();
                 if (node instanceof AST_LambdaExpression && node.name && drop_fn_name(node.name.definition())) {
                     node.name = null;
                 }
diff --git a/test/compress/side_effects.js b/test/compress/side_effects.js
index 3c09448d088..090a6566207 100644
--- a/test/compress/side_effects.js
+++ b/test/compress/side_effects.js
@@ -584,7 +584,9 @@ issue_4668: {
     }
     expect: {
         console.log(function f() {
-            (function g() {})();
+            (function g() {
+                0;
+            })();
         }());
     }
     expect_stdout: "undefined"
diff --git a/test/compress/yields.js b/test/compress/yields.js
index 8478d541c9a..c49f7f3980f 100644
--- a/test/compress/yields.js
+++ b/test/compress/yields.js
@@ -2018,3 +2018,24 @@ issue_5684: {
     expect_stdout: "PASS"
     node_version: ">=10"
 }
+
+issue_5707: {
+    options = {
+        hoist_props: true,
+        reduce_vars: true,
+        side_effects: true,
+        toplevel: true,
+        unused: true,
+        yields: true,
+    }
+    input: {
+        var a, b;
+        function* f(c = (b = 42, console.log("PASS"))) {}
+        b = f();
+    }
+    expect: {
+        console.log("PASS");
+    }
+    expect_stdout: "PASS"
+    node_version: ">=6"
+}