diff --git a/compiler-plugin/compiler-plugin-backend/src/main/kotlin/kotlinx/rpc/codegen/extension/RpcDeclarationScanner.kt b/compiler-plugin/compiler-plugin-backend/src/main/kotlin/kotlinx/rpc/codegen/extension/RpcDeclarationScanner.kt
index f7296df0e..6cb5c3af2 100644
--- a/compiler-plugin/compiler-plugin-backend/src/main/kotlin/kotlinx/rpc/codegen/extension/RpcDeclarationScanner.kt
+++ b/compiler-plugin/compiler-plugin-backend/src/main/kotlin/kotlinx/rpc/codegen/extension/RpcDeclarationScanner.kt
@@ -12,6 +12,7 @@ import org.jetbrains.kotlin.ir.declarations.IrDeclaration
 import org.jetbrains.kotlin.ir.declarations.IrProperty
 import org.jetbrains.kotlin.ir.declarations.IrSimpleFunction
 import org.jetbrains.kotlin.ir.util.dumpKotlinLike
+import org.jetbrains.kotlin.ir.util.hasDefaultValue
 
 /**
  * This class scans user declared RPC service
@@ -35,7 +36,7 @@ internal object RpcDeclarationScanner {
                         function = declaration,
                         arguments = ctx.versionSpecificApi.run {
                             declaration.valueParametersVS().memoryOptimizedMap { param ->
-                                ServiceDeclaration.Method.Argument(param, param.type)
+                                ServiceDeclaration.Method.Argument(param, param.type, param.hasDefaultValue())
                             }
                         },
                     )
diff --git a/compiler-plugin/compiler-plugin-backend/src/main/kotlin/kotlinx/rpc/codegen/extension/RpcStubGenerator.kt b/compiler-plugin/compiler-plugin-backend/src/main/kotlin/kotlinx/rpc/codegen/extension/RpcStubGenerator.kt
index 005722a13..11ef4eb13 100644
--- a/compiler-plugin/compiler-plugin-backend/src/main/kotlin/kotlinx/rpc/codegen/extension/RpcStubGenerator.kt
+++ b/compiler-plugin/compiler-plugin-backend/src/main/kotlin/kotlinx/rpc/codegen/extension/RpcStubGenerator.kt
@@ -815,6 +815,7 @@ internal class RpcStubGenerator(
                                 values {
                                     +stringConst(parameter.value.name.asString())
                                     +irRpcTypeCall(parameter.type)
+                                    +booleanConst(parameter.isOptional)
                                     +irListOfAnnotations(parameter.value)
                                 }
                             }
diff --git a/compiler-plugin/compiler-plugin-backend/src/main/kotlin/kotlinx/rpc/codegen/extension/ServiceDeclaration.kt b/compiler-plugin/compiler-plugin-backend/src/main/kotlin/kotlinx/rpc/codegen/extension/ServiceDeclaration.kt
index 98d0f19c9..cfb155c31 100644
--- a/compiler-plugin/compiler-plugin-backend/src/main/kotlin/kotlinx/rpc/codegen/extension/ServiceDeclaration.kt
+++ b/compiler-plugin/compiler-plugin-backend/src/main/kotlin/kotlinx/rpc/codegen/extension/ServiceDeclaration.kt
@@ -34,6 +34,7 @@ class ServiceDeclaration(
         class Argument(
             val value: IrValueParameter,
             val type: IrType,
+            val isOptional: Boolean,
         )
     }
 }
diff --git a/compiler-plugin/compiler-plugin-k2/src/main/kotlin/kotlinx/rpc/codegen/checkers/FirRpcStrictModeClassChecker.kt b/compiler-plugin/compiler-plugin-k2/src/main/kotlin/kotlinx/rpc/codegen/checkers/FirRpcStrictModeClassChecker.kt
index abe484cac..b4c858ab8 100644
--- a/compiler-plugin/compiler-plugin-k2/src/main/kotlin/kotlinx/rpc/codegen/checkers/FirRpcStrictModeClassChecker.kt
+++ b/compiler-plugin/compiler-plugin-k2/src/main/kotlin/kotlinx/rpc/codegen/checkers/FirRpcStrictModeClassChecker.kt
@@ -74,7 +74,7 @@ object FirRpcStrictModeClassChecker {
         } memoryOptimizedPlus (function.resolvedReturnTypeRef.source to function.resolvedReturnTypeRef)
 
         types.forEach { (source, symbol) ->
-            checkSerializableTypes<FirClassLikeSymbol<*>>(
+            checkSerializableTypes(
                 context = context,
                 typeRef = symbol,
                 serializablePropertiesProvider = serializablePropertiesProvider,
@@ -96,8 +96,6 @@ object FirRpcStrictModeClassChecker {
                         }
                     }
                 }
-
-                symbol
             }
         }
 
@@ -106,26 +104,28 @@ object FirRpcStrictModeClassChecker {
         }
     }
 
-    private fun <ContextElement> checkSerializableTypes(
+    private fun checkSerializableTypes(
         context: CheckerContext,
         typeRef: FirTypeRef,
         serializablePropertiesProvider: FirSerializablePropertiesProvider,
-        parentContext: List<ContextElement> = emptyList(),
-        checker: (FirClassLikeSymbol<*>, List<ContextElement>) -> ContextElement?,
+        parentContext: List<FirClassLikeSymbol<*>> = emptyList(),
+        checker: (FirClassLikeSymbol<*>, List<FirClassLikeSymbol<*>>) -> Unit,
     ) {
         val symbol = typeRef.toClassLikeSymbol(context.session) ?: return
-        val newElement = checker(symbol, parentContext)
-        val nextContext = if (newElement != null) {
-            parentContext memoryOptimizedPlus newElement
-        } else {
-            parentContext
-        }
+
+        checker(symbol, parentContext)
 
         if (symbol !is FirClassSymbol<*>) {
             return
         }
 
-        val extracted = extractArgumentsTypeRefAndSource(typeRef)
+        val nextContext = parentContext memoryOptimizedPlus symbol
+
+        if (symbol in parentContext && symbol.typeParameterSymbols.isEmpty()) {
+            return
+        }
+
+        val typeParameters = extractArgumentsTypeRefAndSource(typeRef)
             .orEmpty()
             .withIndex()
             .associate { (i, refSource) ->
@@ -133,7 +133,7 @@ object FirRpcStrictModeClassChecker {
             }
 
         val flowProps: List<FirTypeRef> = if (symbol.classId == RpcClassId.flow) {
-            listOf(extracted.values.toList()[0]!!)
+            listOf(typeParameters.values.toList()[0]!!)
         } else {
             emptyList()
         }
@@ -144,7 +144,7 @@ object FirRpcStrictModeClassChecker {
                 if (resolvedTypeRef.toClassLikeSymbol(context.session) != null) {
                     resolvedTypeRef
                 } else {
-                    extracted[property.resolvedReturnType]
+                    typeParameters[property.resolvedReturnType]
                 }
             }.memoryOptimizedPlus(flowProps)
             .forEach { symbol ->
diff --git a/compiler-plugin/compiler-plugin-k2/src/main/kotlin/kotlinx/rpc/codegen/checkers/diagnostics/FirRpcDiagnostics.kt b/compiler-plugin/compiler-plugin-k2/src/main/kotlin/kotlinx/rpc/codegen/checkers/diagnostics/FirRpcDiagnostics.kt
index 6cb21ed7f..8d5897fea 100644
--- a/compiler-plugin/compiler-plugin-k2/src/main/kotlin/kotlinx/rpc/codegen/checkers/diagnostics/FirRpcDiagnostics.kt
+++ b/compiler-plugin/compiler-plugin-k2/src/main/kotlin/kotlinx/rpc/codegen/checkers/diagnostics/FirRpcDiagnostics.kt
@@ -17,6 +17,7 @@ import org.jetbrains.kotlin.fir.types.ConeKotlinType
 import org.jetbrains.kotlin.name.Name
 import org.jetbrains.kotlin.psi.KtAnnotated
 import org.jetbrains.kotlin.psi.KtElement
+import org.jetbrains.kotlin.psi.KtNameReferenceExpression
 
 // ###########################################################################
 // ###                     BIG WARNING, LISTEN CLOSELY!                    ###
@@ -25,8 +26,8 @@ import org.jetbrains.kotlin.psi.KtElement
 // ###########################################################################
 
 object FirRpcDiagnostics : RpcKtDiagnosticsContainer() {
-    val WRONG_RPC_ANNOTATION_TARGET by error1<KtAnnotated, ConeKotlinType>()
-    val CHECKED_ANNOTATION_VIOLATION by error3<KtAnnotated, Int, ConeKotlinType, FirBasedSymbol<*>>()
+    val WRONG_RPC_ANNOTATION_TARGET by error1<KtElement, ConeKotlinType>()
+    val CHECKED_ANNOTATION_VIOLATION by error3<KtElement, Int, ConeKotlinType, FirBasedSymbol<*>>()
     val NON_SUSPENDING_REQUEST_WITHOUT_STREAMING_RETURN_TYPE by error0<KtElement>()
     val AD_HOC_POLYMORPHISM_IN_RPC_SERVICE by error2<KtElement, Int, Name>()
     val TYPE_PARAMETERS_IN_RPC_FUNCTION by error0<KtElement>(SourceElementPositioningStrategies.TYPE_PARAMETERS_LIST)
diff --git a/compiler-plugin/gradle.properties b/compiler-plugin/gradle.properties
index 1daa2663a..9792d43e3 100644
--- a/compiler-plugin/gradle.properties
+++ b/compiler-plugin/gradle.properties
@@ -15,7 +15,7 @@ org.gradle.parallel=true
 org.gradle.workers.max=8
 org.gradle.caching=true
 org.gradle.configuration-cache=true
-org.gradle.configureondemand=true
+#org.gradle.configureondemand=true // breaks compiler tests
 
 org.jetbrains.dokka.experimental.gradle.pluginMode=V2Enabled
 org.jetbrains.dokka.experimental.gradle.pluginMode.noWarn=true
diff --git a/core/src/commonMain/kotlin/kotlinx/rpc/descriptor/RpcServiceDescriptor.kt b/core/src/commonMain/kotlin/kotlinx/rpc/descriptor/RpcServiceDescriptor.kt
index 666568ed3..508fcb777 100644
--- a/core/src/commonMain/kotlin/kotlinx/rpc/descriptor/RpcServiceDescriptor.kt
+++ b/core/src/commonMain/kotlin/kotlinx/rpc/descriptor/RpcServiceDescriptor.kt
@@ -68,6 +68,7 @@ public sealed interface RpcInvokator<@Rpc T : Any> {
 public interface RpcParameter {
     public val name: String
     public val type: RpcType
+    public val isOptional: Boolean
 
     /**
      * List of annotations with target [AnnotationTarget.VALUE_PARAMETER].
diff --git a/core/src/commonMain/kotlin/kotlinx/rpc/descriptor/RpcServiceDescriptorDefault.kt b/core/src/commonMain/kotlin/kotlinx/rpc/descriptor/RpcServiceDescriptorDefault.kt
index e4c79456b..f3209ba48 100644
--- a/core/src/commonMain/kotlin/kotlinx/rpc/descriptor/RpcServiceDescriptorDefault.kt
+++ b/core/src/commonMain/kotlin/kotlinx/rpc/descriptor/RpcServiceDescriptorDefault.kt
@@ -21,6 +21,7 @@ public class RpcCallableDefault<@Rpc T : Any>(
 public class RpcParameterDefault(
     override val name: String,
     override val type: RpcType,
+    override val isOptional: Boolean,
     override val annotations: List<Annotation>,
 ) : RpcParameter
 
diff --git a/dokka-plugin/gradle.properties b/dokka-plugin/gradle.properties
index 1daa2663a..9792d43e3 100644
--- a/dokka-plugin/gradle.properties
+++ b/dokka-plugin/gradle.properties
@@ -15,7 +15,7 @@ org.gradle.parallel=true
 org.gradle.workers.max=8
 org.gradle.caching=true
 org.gradle.configuration-cache=true
-org.gradle.configureondemand=true
+#org.gradle.configureondemand=true // breaks compiler tests
 
 org.jetbrains.dokka.experimental.gradle.pluginMode=V2Enabled
 org.jetbrains.dokka.experimental.gradle.pluginMode.noWarn=true
diff --git a/gradle-conventions/src/main/kotlin/conventions-common.gradle.kts b/gradle-conventions/src/main/kotlin/conventions-common.gradle.kts
index ebf7294c3..42638476a 100644
--- a/gradle-conventions/src/main/kotlin/conventions-common.gradle.kts
+++ b/gradle-conventions/src/main/kotlin/conventions-common.gradle.kts
@@ -1,5 +1,5 @@
 /*
- * Copyright 2023-2024 JetBrains s.r.o and contributors. Use of this source code is governed by the Apache 2.0 license.
+ * Copyright 2023-2025 JetBrains s.r.o and contributors. Use of this source code is governed by the Apache 2.0 license.
  */
 
 import io.gitlab.arturbosch.detekt.Detekt
diff --git a/gradle-conventions/src/main/kotlin/conventions-kmp.gradle.kts b/gradle-conventions/src/main/kotlin/conventions-kmp.gradle.kts
index bf8d777ff..44f80f0d1 100644
--- a/gradle-conventions/src/main/kotlin/conventions-kmp.gradle.kts
+++ b/gradle-conventions/src/main/kotlin/conventions-kmp.gradle.kts
@@ -1,5 +1,5 @@
 /*
- * Copyright 2023-2024 JetBrains s.r.o and contributors. Use of this source code is governed by the Apache 2.0 license.
+ * Copyright 2023-2025 JetBrains s.r.o and contributors. Use of this source code is governed by the Apache 2.0 license.
  */
 
 @file:OptIn(ExperimentalAbiValidation::class)
diff --git a/gradle-conventions/src/main/kotlin/conventions-publishing.gradle.kts b/gradle-conventions/src/main/kotlin/conventions-publishing.gradle.kts
index f374760aa..bc9776bb7 100644
--- a/gradle-conventions/src/main/kotlin/conventions-publishing.gradle.kts
+++ b/gradle-conventions/src/main/kotlin/conventions-publishing.gradle.kts
@@ -138,15 +138,6 @@ fun RepositoryHandler.configureLocalDevRepository() {
     }
 }
 
-val sonatypeRepositoryUri: String?
-    get() {
-        val repositoryId: String = project.getSensitiveProperty("libs.repository.id")
-            ?.takeIf { it.isNotBlank() }
-            ?: return null
-
-        return "https://oss.sonatype.org/service/local/staging/deployByRepositoryId/$repositoryId"
-    }
-
 fun configureEmptyJavadocArtifact(): TaskProvider<Jar?> {
     val javadocJar by project.tasks.registering(Jar::class) {
         archiveClassifier.set("javadoc")
diff --git a/gradle-plugin/gradle.properties b/gradle-plugin/gradle.properties
index 1daa2663a..9792d43e3 100644
--- a/gradle-plugin/gradle.properties
+++ b/gradle-plugin/gradle.properties
@@ -15,7 +15,7 @@ org.gradle.parallel=true
 org.gradle.workers.max=8
 org.gradle.caching=true
 org.gradle.configuration-cache=true
-org.gradle.configureondemand=true
+#org.gradle.configureondemand=true // breaks compiler tests
 
 org.jetbrains.dokka.experimental.gradle.pluginMode=V2Enabled
 org.jetbrains.dokka.experimental.gradle.pluginMode.noWarn=true
diff --git a/gradle.properties b/gradle.properties
index 1daa2663a..9792d43e3 100644
--- a/gradle.properties
+++ b/gradle.properties
@@ -15,7 +15,7 @@ org.gradle.parallel=true
 org.gradle.workers.max=8
 org.gradle.caching=true
 org.gradle.configuration-cache=true
-org.gradle.configureondemand=true
+#org.gradle.configureondemand=true // breaks compiler tests
 
 org.jetbrains.dokka.experimental.gradle.pluginMode=V2Enabled
 org.jetbrains.dokka.experimental.gradle.pluginMode.noWarn=true
diff --git a/krpc/krpc-core/src/commonMain/kotlin/kotlinx/rpc/krpc/internal/SerializationUtils.kt b/krpc/krpc-core/src/commonMain/kotlin/kotlinx/rpc/krpc/internal/SerializationUtils.kt
index 68165e133..f32b6dd98 100644
--- a/krpc/krpc-core/src/commonMain/kotlin/kotlinx/rpc/krpc/internal/SerializationUtils.kt
+++ b/krpc/krpc-core/src/commonMain/kotlin/kotlinx/rpc/krpc/internal/SerializationUtils.kt
@@ -1,5 +1,5 @@
 /*
- * Copyright 2023-2024 JetBrains s.r.o and contributors. Use of this source code is governed by the Apache 2.0 license.
+ * Copyright 2023-2025 JetBrains s.r.o and contributors. Use of this source code is governed by the Apache 2.0 license.
  */
 
 package kotlinx.rpc.krpc.internal
@@ -15,6 +15,7 @@ import kotlinx.serialization.descriptors.buildClassSerialDescriptor
 import kotlinx.serialization.encoding.*
 import kotlinx.serialization.modules.SerializersModule
 import kotlin.reflect.KType
+import kotlin.reflect.KTypeParameter
 
 @OptIn(ExperimentalSerializationApi::class)
 internal fun SerializersModule.buildContextualInternal(type: KType): KSerializer<Any?>? {
@@ -113,7 +114,7 @@ public class CallableParametersSerializer(
                 elementName = param.name,
                 descriptor = callableSerializers[i].descriptor,
                 annotations = param.type.annotations,
-                isOptional = param.type.kType.isMarkedNullable,
+                isOptional = param.isOptional,
             )
         }
     }
diff --git a/krpc/krpc-test/src/commonMain/kotlin/kotlinx/rpc/krpc/test/KrpcTestService.kt b/krpc/krpc-test/src/commonMain/kotlin/kotlinx/rpc/krpc/test/KrpcTestService.kt
index 48791b4ee..d62538a1f 100644
--- a/krpc/krpc-test/src/commonMain/kotlin/kotlinx/rpc/krpc/test/KrpcTestService.kt
+++ b/krpc/krpc-test/src/commonMain/kotlin/kotlinx/rpc/krpc/test/KrpcTestService.kt
@@ -60,7 +60,8 @@ interface KrpcTestService {
     suspend fun doubleGenericParams(arg1: List<List<String>>)
     suspend fun mapParams(arg1: Map<String, Map<Int, List<String>>>)
     suspend fun customType(arg1: TestClass): TestClass
-    suspend fun nullable(arg1: String?): TestClass?
+    suspend fun nullableParam(arg1: String?): String
+    suspend fun nullableReturn(returnNull: Boolean): TestClass?
     suspend fun variance(arg2: TestList<in TestClass>, arg3: TestList2<TestClass>): TestList<out TestClass>?
 
     suspend fun nonSerializableClass(localDate: LocalDate): LocalDate
diff --git a/krpc/krpc-test/src/commonMain/kotlin/kotlinx/rpc/krpc/test/KrpcTestServiceBackend.kt b/krpc/krpc-test/src/commonMain/kotlin/kotlinx/rpc/krpc/test/KrpcTestServiceBackend.kt
index ba162a66f..a8b924995 100644
--- a/krpc/krpc-test/src/commonMain/kotlin/kotlinx/rpc/krpc/test/KrpcTestServiceBackend.kt
+++ b/krpc/krpc-test/src/commonMain/kotlin/kotlinx/rpc/krpc/test/KrpcTestServiceBackend.kt
@@ -97,8 +97,12 @@ class KrpcTestServiceBackend : KrpcTestService {
         return arg1
     }
 
-    override suspend fun nullable(arg1: String?): TestClass? {
-        return if (arg1 == null) null else TestClass()
+    override suspend fun nullableParam(arg1: String?): String {
+        return arg1 ?: "null"
+    }
+
+    override suspend fun nullableReturn(returnNull: Boolean): TestClass? {
+        return if (returnNull) null else TestClass()
     }
 
     override suspend fun variance(
diff --git a/krpc/krpc-test/src/commonMain/kotlin/kotlinx/rpc/krpc/test/KrpcTransportTestBase.kt b/krpc/krpc-test/src/commonMain/kotlin/kotlinx/rpc/krpc/test/KrpcTransportTestBase.kt
index d1720f6e2..ff32015c4 100644
--- a/krpc/krpc-test/src/commonMain/kotlin/kotlinx/rpc/krpc/test/KrpcTransportTestBase.kt
+++ b/krpc/krpc-test/src/commonMain/kotlin/kotlinx/rpc/krpc/test/KrpcTransportTestBase.kt
@@ -226,12 +226,21 @@ abstract class KrpcTransportTestBase {
     }
 
     @Test
-    open fun nullable() = runTest {
-        val result = client.nullable("test")
-        assertEquals(TestClass(), result)
+    open fun nullableParameter() = runTest {
+        val result = client.nullableParam("test")
+        assertEquals("test", result)
+
+        val result2 = client.nullableParam(null)
+        assertEquals("null", result2)
+    }
+
+    @Test
+    open fun nullableReturn() = runTest {
+        val result = client.nullableReturn(returnNull = true)
+        assertEquals(null, result)
 
-        val result2 = client.nullable(null)
-        assertEquals(null, result2)
+        val result2 = client.nullableReturn(returnNull = false)
+        assertEquals(TestClass(), result2)
     }
 
     @Test
@@ -345,7 +354,7 @@ abstract class KrpcTransportTestBase {
     @Test
     open fun testNullables() = runTest {
         assertEquals(1, client.nullableInt(1))
-        assertNull(client.nullable(null))
+        assertNull(client.nullableReturn(returnNull = true))
     }
 
     @Test
diff --git a/krpc/krpc-test/src/commonTest/kotlin/kotlinx/rpc/krpc/test/LocalTransportTest.kt b/krpc/krpc-test/src/commonTest/kotlin/kotlinx/rpc/krpc/test/LocalTransportTest.kt
index 2cd704c01..7b6f0ebcf 100644
--- a/krpc/krpc-test/src/commonTest/kotlin/kotlinx/rpc/krpc/test/LocalTransportTest.kt
+++ b/krpc/krpc-test/src/commonTest/kotlin/kotlinx/rpc/krpc/test/LocalTransportTest.kt
@@ -52,7 +52,7 @@ class ProtoBufLocalTransportTest : LocalTransportTest() {
 
     // 'null' is not supported in ProtoBuf
     @Test
-    override fun nullable(): TestResult = runTest { }
+    override fun nullableReturn(): TestResult = runTest { }
 
     @Test
     override fun testByteArraySerialization(): TestResult = runTest { }
diff --git a/tests/compiler-plugin-tests/src/testData/diagnostics/strictMode.fir.txt b/tests/compiler-plugin-tests/src/testData/diagnostics/strictMode.fir.txt
index 28defc553..75ebeecff 100644
--- a/tests/compiler-plugin-tests/src/testData/diagnostics/strictMode.fir.txt
+++ b/tests/compiler-plugin-tests/src/testData/diagnostics/strictMode.fir.txt
@@ -48,6 +48,37 @@ FILE: b.kt
 
         public final fun copy(flow1: R|kotlinx/coroutines/flow/Flow<kotlin/Int>| = this@R|/MultiFlow|.R|/MultiFlow.flow1|, flow2: R|kotlinx/coroutines/flow/Flow<kotlin/Int>| = this@R|/MultiFlow|.R|/MultiFlow.flow2|, flow3: R|kotlinx/coroutines/flow/Flow<kotlin/Int>| = this@R|/MultiFlow|.R|/MultiFlow.flow3|): R|MultiFlow|
 
+    }
+    public final data class ComplexFilter : R|kotlin/Any| {
+        public constructor(a: R|SimpleFilter?|, b: R|ComplexFilter?|): R|ComplexFilter| {
+            super<R|kotlin/Any|>()
+        }
+
+        public final val a: R|SimpleFilter?| = R|<local>/a|
+            public get(): R|SimpleFilter?|
+
+        public final val b: R|ComplexFilter?| = R|<local>/b|
+            public get(): R|ComplexFilter?|
+
+        public final operator fun component1(): R|SimpleFilter?|
+
+        public final operator fun component2(): R|ComplexFilter?|
+
+        public final fun copy(a: R|SimpleFilter?| = this@R|/ComplexFilter|.R|/ComplexFilter.a|, b: R|ComplexFilter?| = this@R|/ComplexFilter|.R|/ComplexFilter.b|): R|ComplexFilter|
+
+    }
+    public final data class SimpleFilter : R|kotlin/Any| {
+        public constructor(text: R|kotlin/String|): R|SimpleFilter| {
+            super<R|kotlin/Any|>()
+        }
+
+        public final val text: R|kotlin/String| = R|<local>/text|
+            public get(): R|kotlin/String|
+
+        public final operator fun component1(): R|kotlin/String|
+
+        public final fun copy(text: R|kotlin/String| = this@R|/SimpleFilter|.R|/SimpleFilter.text|): R|SimpleFilter|
+
     }
     @R|kotlinx/rpc/annotations/Rpc|() public abstract interface MyService : R|kotlin/Any| {
         public abstract val flow: R|kotlinx/coroutines/flow/Flow<kotlin/Int>|
@@ -105,6 +136,8 @@ FILE: b.kt
 
         public abstract fun nonSuspendNoFlowString(): R|kotlin/String|
 
+        public abstract suspend fun complex(filter: R|ComplexFilter|): R|kotlin/String|
+
         public final class $rpcServiceStub : R|kotlin/Any| {
             public final companion object Companion : R|kotlin/Any| {
             }
diff --git a/tests/compiler-plugin-tests/src/testData/diagnostics/strictMode.kt b/tests/compiler-plugin-tests/src/testData/diagnostics/strictMode.kt
index 501d2a397..63293be73 100644
--- a/tests/compiler-plugin-tests/src/testData/diagnostics/strictMode.kt
+++ b/tests/compiler-plugin-tests/src/testData/diagnostics/strictMode.kt
@@ -29,6 +29,13 @@ data class MultiFlow(
     val flow3: Flow<Int>,
 )
 
+data class ComplexFilter(
+    val a: SimpleFilter?,
+    val b: ComplexFilter?
+)
+
+data class SimpleFilter(val text: String)
+
 @Rpc
 interface MyService {
     <!FIELD_IN_RPC_SERVICE!>val flow: Flow<Int><!>
@@ -57,4 +64,5 @@ interface MyService {
     suspend fun clientNestedTrickyFlow(<!NESTED_STREAMING_IN_RPC_SERVICE!>inner: Wrapper<Flow<Wrapper<Flow<Int>>>><!>)
     <!NON_SUSPENDING_REQUEST_WITHOUT_STREAMING_RETURN_TYPE!>fun nonSuspendNoFlow()<!>
     <!NON_SUSPENDING_REQUEST_WITHOUT_STREAMING_RETURN_TYPE!>fun nonSuspendNoFlowString(): String<!>
+    suspend fun complex(filter: ComplexFilter): String // doesn't fail on circular dependency
 }
diff --git a/updateTestData.sh b/updateTestData.sh
index 6233f8299..00ed61720 100755
--- a/updateTestData.sh
+++ b/updateTestData.sh
@@ -1,7 +1,7 @@
 #!/bin/bash
 
 #
-# Copyright 2023-2024 JetBrains s.r.o and contributors. Use of this source code is governed by the Apache 2.0 license.
+# Copyright 2023-2025 JetBrains s.r.o and contributors. Use of this source code is governed by the Apache 2.0 license.
 #
 
 if [ "$#" -ne 1 ] && [ "$#" -ne 2 ]; then
@@ -23,4 +23,5 @@ set -o xtrace
     :tests:compiler-plugin-tests:test \
     --tests "kotlinx.rpc.codegen.test.runners.$1Generated$TEST_NAME" \
     --continue \
+    --stacktrace \
     -Pkotlin.test.update.test.data=true