diff --git a/cue/testdata/eval/disjunctions.txtar b/cue/testdata/eval/disjunctions.txtar
index 0c23a351f..5bb6fc2b4 100644
--- a/cue/testdata/eval/disjunctions.txtar
+++ b/cue/testdata/eval/disjunctions.txtar
@@ -132,16 +132,22 @@ issue641: {
 		}
 	}
 }
+-- issue3406.cue --
+issue3406: {
+	out: d & { d }
+	d: kind: "foo" | "bar"
+	d: { kind: "foo" } | { kind: "bar" }
+}
 -- out/eval/stats --
 Leaks:  0
-Freed:  304
-Reused: 292
+Freed:  347
+Reused: 335
 Allocs: 12
 Retain: 0
 
-Unifications: 147
-Conjuncts:    564
-Disjuncts:    304
+Unifications: 158
+Conjuncts:    633
+Disjuncts:    347
 -- out/evalalpha --
 Errors:
 f.name: conflicting values "int" and "str":
@@ -301,6 +307,18 @@ Result:
       }
     }
   }
+  issue3406: (struct){
+    out: (struct){ |((struct){
+        kind: (string){ "foo" }
+      }, (struct){
+        kind: (string){ "bar" }
+      }) }
+    d: (struct){ |((struct){
+        kind: (string){ "foo" }
+      }, (struct){
+        kind: (string){ "bar" }
+      }) }
+  }
 }
 -- diff/-out/evalalpha<==>+out/eval --
 diff old new
@@ -530,6 +548,18 @@ Result:
       }
     }
   }
+  issue3406: (struct){
+    out: (struct){ |((struct){
+        kind: (string){ "foo" }
+      }, (struct){
+        kind: (string){ "bar" }
+      }) }
+    d: (struct){ |((struct){
+        kind: (string){ "foo" }
+      }, (struct){
+        kind: (string){ "bar" }
+      }) }
+  }
 }
 -- out/compile --
 --- in.cue
@@ -716,3 +746,19 @@ Result:
     }
   }
 }
+--- issue3406.cue
+{
+  issue3406: {
+    out: (〈0;d〉 & {
+      〈1;d〉
+    })
+    d: {
+      kind: ("foo"|"bar")
+    }
+    d: ({
+      kind: "foo"
+    }|{
+      kind: "bar"
+    })
+  }
+}
diff --git a/internal/core/adt/conjunct.go b/internal/core/adt/conjunct.go
index 1ee029a1c..94bd08c7c 100644
--- a/internal/core/adt/conjunct.go
+++ b/internal/core/adt/conjunct.go
@@ -90,7 +90,13 @@ func (n *nodeContext) scheduleConjunct(c Conjunct, id CloseInfo) {
 		}
 
 		if id.cc.src != n.node {
-			panic("inconsistent state: nodes differ")
+			// TODO(#3406): raise a panic again.
+			//		out: d & { d }
+			//		d: {
+			//			kind: "foo" | "bar"
+			//			{ kind: "foo" } | { kind: "bar" }
+			//		}
+			// panic("inconsistent state: nodes differ")
 		}
 	default: