diff --git a/kotlinx-coroutines-core/common/src/intrinsics/Undispatched.kt b/kotlinx-coroutines-core/common/src/intrinsics/Undispatched.kt
index 511199701a..bb81d442d4 100644
--- a/kotlinx-coroutines-core/common/src/intrinsics/Undispatched.kt
+++ b/kotlinx-coroutines-core/common/src/intrinsics/Undispatched.kt
@@ -38,43 +38,46 @@ internal fun <R, T> (suspend (R) -> T).startCoroutineUndispatched(receiver: R, c
  *
  * It starts the coroutine using [startCoroutineUninterceptedOrReturn].
  */
-internal fun <T, R> ScopeCoroutine<T>.startUndispatchedOrReturn(receiver: R, block: suspend R.() -> T): Any? {
-    return undispatchedResult({ true }) {
-        block.startCoroutineUninterceptedOrReturn(receiver, this)
-    }
-}
+internal fun <T, R> ScopeCoroutine<T>.startUndispatchedOrReturn(
+    receiver: R, block: suspend R.() -> T
+): Any? = startUndspatched(alwaysRethrow = true, receiver, block)
 
 /**
  * Same as [startUndispatchedOrReturn], but ignores [TimeoutCancellationException] on fast-path.
  */
 internal fun <T, R> ScopeCoroutine<T>.startUndispatchedOrReturnIgnoreTimeout(
     receiver: R, block: suspend R.() -> T
-): Any? {
-    return undispatchedResult({ e -> !(e is TimeoutCancellationException && e.coroutine === this) }) {
-        block.startCoroutineUninterceptedOrReturn(receiver, this)
-    }
-}
+): Any? = startUndspatched(alwaysRethrow = false, receiver, block)
 
-private inline fun <T> ScopeCoroutine<T>.undispatchedResult(
-    shouldThrow: (Throwable) -> Boolean,
-    startBlock: () -> Any?
+/**
+ * Starts and handles the result of an undispatched coroutine, potentially with children.
+ * For example, it handles `coroutineScope { ...suspend of throw, maybe start children... }`
+ * and `launch(start = UNDISPATCHED) { ... }`
+ *
+ * @param alwaysRethrow specifies whether an exception should be unconditioanlly rethrown.
+ *     It is a tweak for 'withTimeout' in order to successfully return values when the block was cancelled:
+ *     i.e. `withTimeout(1ms) { Thread.sleep(1000); 42 }` should not fail.
+ */
+private fun <T, R> ScopeCoroutine<T>.startUndspatched(
+    alwaysRethrow: Boolean,
+    receiver: R, block: suspend R.() -> T
 ): Any? {
     val result = try {
-        startBlock()
+        block.startCoroutineUninterceptedOrReturn(receiver, this)
+    } catch (e: DispatchException) {
+        // Special codepath for failing CoroutineDispatcher: rethrow an exception
+        // immediately without waiting for children to indicate something is wrong
+        dispatchExceptionAndMakeCompleting(e)
     } catch (e: Throwable) {
         CompletedExceptionally(e)
     }
+
     /*
-     * We're trying to complete our undispatched block here and have three code-paths:
-     * (1) Coroutine is suspended.
-     * Otherwise, coroutine had returned result, so we are completing our block (and its job).
-     * (2) If we can't complete it or started waiting for children, we suspend.
-     * (3) If we have successfully completed the coroutine state machine here,
-     *     then we take the actual final state of the coroutine from makeCompletingOnce and return it.
-     *
-     * shouldThrow parameter is a special code path for timeout coroutine:
-     * If timeout is exceeded, but withTimeout() block was not suspended, we would like to return block value,
-     * not a timeout exception.
+     * We are trying to complete our undispatched block with the following possible codepaths:
+     * 1) The coroutine just suspended. I.e. `coroutineScope { .. suspend here }`.
+     *   Then just suspend
+     * 2) The coroutine completed with something, but has active children. Wait for them, also suspend
+     * 3) The coroutine succesfully completed. Return or rethrow its result.
      */
     if (result === COROUTINE_SUSPENDED) return COROUTINE_SUSPENDED // (1)
     val state = makeCompletingOnce(result)
@@ -82,7 +85,7 @@ private inline fun <T> ScopeCoroutine<T>.undispatchedResult(
     afterCompletionUndispatched()
     return if (state is CompletedExceptionally) { // (3)
         when {
-            shouldThrow(state.cause) -> throw recoverStackTrace(state.cause, uCont)
+            alwaysRethrow || notOwnTimeout(state.cause) -> throw recoverStackTrace(state.cause, uCont)
             result is CompletedExceptionally -> throw recoverStackTrace(result.cause, uCont)
             else -> result
         }
@@ -90,3 +93,12 @@ private inline fun <T> ScopeCoroutine<T>.undispatchedResult(
         state.unboxState()
     }
 }
+
+private fun ScopeCoroutine<*>.notOwnTimeout(cause: Throwable): Boolean {
+    return cause !is TimeoutCancellationException || cause.coroutine !== this
+}
+
+private fun ScopeCoroutine<*>.dispatchExceptionAndMakeCompleting(e: DispatchException): Nothing {
+    makeCompleting(CompletedExceptionally(e.cause))
+    throw recoverStackTrace(e.cause, uCont)
+}
diff --git a/kotlinx-coroutines-core/common/test/ExperimentalDispatchModeTest.kt b/kotlinx-coroutines-core/common/test/UnconfinedCancellationTest.kt
similarity index 97%
rename from kotlinx-coroutines-core/common/test/ExperimentalDispatchModeTest.kt
rename to kotlinx-coroutines-core/common/test/UnconfinedCancellationTest.kt
index 98c5e66727..59845d841b 100644
--- a/kotlinx-coroutines-core/common/test/ExperimentalDispatchModeTest.kt
+++ b/kotlinx-coroutines-core/common/test/UnconfinedCancellationTest.kt
@@ -3,7 +3,7 @@ package kotlinx.coroutines
 import kotlinx.coroutines.testing.*
 import kotlin.test.*
 
-class ExperimentalDispatchModeTest : TestBase() {
+class UnconfinedCancellationTest : TestBase() {
     @Test
     fun testUnconfinedCancellation() = runTest {
         val parent = Job()
diff --git a/kotlinx-coroutines-core/jvm/test/FailFastOnStartTest.kt b/kotlinx-coroutines-core/jvm/test/FailFastOnStartTest.kt
index ae3c503d60..022fb6b630 100644
--- a/kotlinx-coroutines-core/jvm/test/FailFastOnStartTest.kt
+++ b/kotlinx-coroutines-core/jvm/test/FailFastOnStartTest.kt
@@ -4,9 +4,15 @@ package kotlinx.coroutines
 
 import kotlinx.coroutines.testing.*
 import kotlinx.coroutines.channels.*
+import kotlinx.coroutines.flow.emptyFlow
+import kotlinx.coroutines.flow.flow
+import kotlinx.coroutines.flow.flowOn
 import org.junit.*
 import org.junit.Test
 import org.junit.rules.*
+import kotlin.coroutines.Continuation
+import kotlin.coroutines.EmptyCoroutineContext
+import kotlin.coroutines.startCoroutine
 import kotlin.test.*
 
 class FailFastOnStartTest : TestBase() {
@@ -81,4 +87,24 @@ class FailFastOnStartTest : TestBase() {
     fun testAsyncNonChild() = runTest(expected = ::mainException) {
         async<Int>(Job() + Dispatchers.Main) { fail() }
     }
+
+    @Test
+    fun testFlowOn() {
+        // See #4142, this test ensures that `coroutineScope { produce(failingDispatcher, ATOMIC) }`
+        // rethrows an exception. It does not help with the completion of such a coroutine though.
+        // `suspend {}` + start coroutine with custom `completion` to avoid waiting for test completion
+        expect(1)
+        val caller = suspend {
+            try {
+                emptyFlow<Int>().flowOn(Dispatchers.Main).collect { fail() }
+            } catch (e: Throwable) {
+                assertTrue(mainException(e))
+                expect(2)
+            }
+        }
+
+        caller.startCoroutine(Continuation(EmptyCoroutineContext) {
+            finish(3)
+        })
+    }
 }