diff --git a/spec/02-identifiers-names-and-scopes.md b/spec/02-identifiers-names-and-scopes.md
index 8ae89aec117..63ca8b21d78 100644
--- a/spec/02-identifiers-names-and-scopes.md
+++ b/spec/02-identifiers-names-and-scopes.md
@@ -17,11 +17,9 @@ which are collectively called _bindings_.
 Bindings of each kind are assigned a precedence which determines
 whether one binding can shadow another:
 
-1. Definitions and declarations in lexical scope that are not [top-level](09-top-level-definitions.html)
-   have the highest precedence.
-1. Definitions and declarations that are either inherited,
-   or made available by a package clause and also defined in the same compilation unit as the reference to them,
-   have the next highest precedence.
+1. Definitions and declarations that are local, inherited, or made
+   available by a package clause and also defined in the same compilation unit
+   as the reference to them, have the highest precedence.
 1. Explicit imports have the next highest precedence.
 1. Wildcard imports have the next highest precedence.
 1. Bindings made available by a package clause,
@@ -39,6 +37,11 @@ in some inner scope _shadows_ bindings of lower precedence in the
 same scope as well as bindings of the same or lower precedence in outer
 scopes.
 
+It is an error if an identifier x is available as an inherited member in an inner scope
+and the same name x is defined in an outer scope in the same source file, unless
+the inherited member (has an overloaded alternative that) coincides with
+(an overloaded alternative of) the definition x.
+
 Note that shadowing is only a partial order. In the following example,
 neither binding of `x` shadows the other. Consequently, the
 reference to `x` in the last line of the block is ambiguous.
diff --git a/src/compiler/scala/tools/nsc/typechecker/Contexts.scala b/src/compiler/scala/tools/nsc/typechecker/Contexts.scala
index a439b111a98..09af2a01615 100644
--- a/src/compiler/scala/tools/nsc/typechecker/Contexts.scala
+++ b/src/compiler/scala/tools/nsc/typechecker/Contexts.scala
@@ -1607,7 +1607,7 @@ trait Contexts { self: Analyzer =>
         val wasFoundInSuper = foundInSuper
         val foundCompetingSymbol: () => Boolean =
           if (foreignDefined) () => !foreignDefined
-          else () => !defSym.isTopLevel && !defSym.owner.isPackageObjectOrClass && !foundInSuper && !foreignDefined
+          else () => !defSym.owner.isPackageObjectOrClass && !foundInSuper && !foreignDefined
         while ((cx ne NoContext) && cx.depth >= symbolDepth) cx = cx.outer
         if (wasFoundInSuper)
           while ((cx ne NoContext) && (cx.owner eq cx0.owner)) cx = cx.outer
diff --git a/test/files/neg/t11921b.check b/test/files/neg/t11921b.check
index 0e2e2391d34..045f13ffb9a 100644
--- a/test/files/neg/t11921b.check
+++ b/test/files/neg/t11921b.check
@@ -29,6 +29,13 @@ Such references are ambiguous in Scala 3. To continue using the inherited symbol
 Or use `-Wconf:msg=legacy-binding:s` to silence this warning.
         println(y)  // error
                 ^
+t11921b.scala:65: warning: reference to global is ambiguous;
+it is both defined in the enclosing package <empty> and inherited in the enclosing object D as value global (defined in class C)
+In Scala 2, symbols inherited from a superclass shadow symbols defined in an outer scope.
+Such references are ambiguous in Scala 3. To continue using the inherited symbol, write `this.global`.
+Or use `-Wconf:msg=legacy-binding:s` to silence this warning.
+  println(global)    // error
+          ^
 t11921b.scala:75: warning: reference to x is ambiguous;
 it is both defined in the enclosing object Uhu and inherited in the enclosing class C as value x (defined in class A, inherited through parent class B)
 In Scala 2, symbols inherited from a superclass shadow symbols defined in an outer scope.
@@ -50,5 +57,5 @@ Such references are ambiguous in Scala 3. To continue using the inherited symbol
 Or use `-Wconf:msg=legacy-binding:s` to silence this warning.
     def v = t(lo) // error
               ^
-7 warnings
+8 warnings
 1 error
diff --git a/test/files/neg/t11921b.scala b/test/files/neg/t11921b.scala
index 93447b5e0a5..ef3b53ae472 100644
--- a/test/files/neg/t11921b.scala
+++ b/test/files/neg/t11921b.scala
@@ -62,7 +62,7 @@ class C {
   val global = 42
 }
 object D extends C {
-  println(global)    // OK, since global is defined in package (https://github.com/scala/scala/pull/10220/files#r1109773904)
+  println(global)    // error
 }
 
 object test5 {
@@ -136,3 +136,10 @@ object test10 {
     def v = t(lo) // error
   }
 }
+
+package scala {
+  trait P { trait Option[+A] }
+  class C extends P {
+    def t = new Option[String] {} // OK, competing scala.Option is not defined in the same compilation unit
+  }
+}