diff --git a/compiler/rustc_trait_selection/src/traits/project.rs b/compiler/rustc_trait_selection/src/traits/project.rs
index 7038f16a2c9c4..7b6775786fcda 100644
--- a/compiler/rustc_trait_selection/src/traits/project.rs
+++ b/compiler/rustc_trait_selection/src/traits/project.rs
@@ -388,15 +388,15 @@ impl<'a, 'b, 'tcx> TypeFolder<'tcx> for AssocTypeNormalizer<'a, 'b, 'tcx> {
         // to make sure we don't forget to fold the substs regardless.
 
         match *ty.kind() {
-            ty::Opaque(def_id, substs) => {
+            // This is really important. While we *can* handle this, this has
+            // severe performance implications for large opaque types with
+            // late-bound regions. See `issue-88862` benchmark.
+            ty::Opaque(def_id, substs) if !substs.has_escaping_bound_vars() => {
                 // Only normalize `impl Trait` after type-checking, usually in codegen.
                 match self.param_env.reveal() {
                     Reveal::UserFacing => ty.super_fold_with(self),
 
                     Reveal::All => {
-                        // N.b. there is an assumption here all this code can handle
-                        // escaping bound vars.
-
                         let recursion_limit = self.tcx().recursion_limit();
                         if !recursion_limit.value_within_limit(self.depth) {
                             let obligation = Obligation::with_depth(
diff --git a/compiler/rustc_trait_selection/src/traits/query/normalize.rs b/compiler/rustc_trait_selection/src/traits/query/normalize.rs
index ed5fe466c69f7..1364cf1c99535 100644
--- a/compiler/rustc_trait_selection/src/traits/query/normalize.rs
+++ b/compiler/rustc_trait_selection/src/traits/query/normalize.rs
@@ -206,15 +206,15 @@ impl<'cx, 'tcx> TypeFolder<'tcx> for QueryNormalizer<'cx, 'tcx> {
 
         // Wrap this in a closure so we don't accidentally return from the outer function
         let res = (|| match *ty.kind() {
-            ty::Opaque(def_id, substs) => {
+            // This is really important. While we *can* handle this, this has
+            // severe performance implications for large opaque types with
+            // late-bound regions. See `issue-88862` benchmark.
+            ty::Opaque(def_id, substs) if !substs.has_escaping_bound_vars() => {
                 // Only normalize `impl Trait` after type-checking, usually in codegen.
                 match self.param_env.reveal() {
                     Reveal::UserFacing => ty.super_fold_with(self),
 
                     Reveal::All => {
-                        // N.b. there is an assumption here all this code can handle
-                        // escaping bound vars.
-
                         let substs = substs.super_fold_with(self);
                         let recursion_limit = self.tcx().recursion_limit();
                         if !recursion_limit.value_within_limit(self.anon_depth) {