diff --git a/src/items.rs b/src/items.rs
index 73b752dfe78..096ce2fa298 100644
--- a/src/items.rs
+++ b/src/items.rs
@@ -1821,9 +1821,17 @@ impl Rewrite for ast::FunctionRetTy {
         match *self {
             ast::FunctionRetTy::Default(_) => Some(String::new()),
             ast::FunctionRetTy::Ty(ref ty) => {
-                let inner_width = shape.width.checked_sub(3)?;
-                ty.rewrite(context, Shape::legacy(inner_width, shape.indent + 3))
-                    .map(|r| format!("-> {}", r))
+                if context.config.version() == Version::One
+                    || context.config.indent_style() == IndentStyle::Visual
+                {
+                    let inner_width = shape.width.checked_sub(3)?;
+                    return ty
+                        .rewrite(context, Shape::legacy(inner_width, shape.indent + 3))
+                        .map(|r| format!("-> {}", r));
+                }
+
+                ty.rewrite(context, shape.offset_left(3)?)
+                    .map(|s| format!("-> {}", s))
             }
         }
     }
@@ -2146,20 +2154,39 @@ fn rewrite_fn_base(
                 sig_length > context.config.max_width()
             }
         };
-        let ret_indent = if ret_should_indent {
-            let indent = if arg_str.is_empty() {
-                // Aligning with non-existent args looks silly.
-                force_new_line_for_brace = true;
-                indent + 4
+        let ret_shape = if ret_should_indent {
+            if context.config.version() == Version::One
+                || context.config.indent_style() == IndentStyle::Visual
+            {
+                let indent = if arg_str.is_empty() {
+                    // Aligning with non-existent args looks silly.
+                    force_new_line_for_brace = true;
+                    indent + 4
+                } else {
+                    // FIXME: we might want to check that using the arg indent
+                    // doesn't blow our budget, and if it does, then fallback to
+                    // the where-clause indent.
+                    arg_indent
+                };
+
+                result.push_str(&indent.to_string_with_newline(context.config));
+                Shape::indented(indent, context.config)
             } else {
-                // FIXME: we might want to check that using the arg indent
-                // doesn't blow our budget, and if it does, then fallback to
-                // the where-clause indent.
-                arg_indent
-            };
+                let mut ret_shape = Shape::indented(indent, context.config);
+                if arg_str.is_empty() {
+                    // Aligning with non-existent args looks silly.
+                    force_new_line_for_brace = true;
+                    ret_shape = if context.use_block_indent() {
+                        ret_shape.offset_left(4).unwrap_or(ret_shape)
+                    } else {
+                        ret_shape.indent = ret_shape.indent + 4;
+                        ret_shape
+                    };
+                }
 
-            result.push_str(&indent.to_string_with_newline(context.config));
-            indent
+                result.push_str(&ret_shape.indent.to_string_with_newline(context.config));
+                ret_shape
+            }
         } else {
             if context.config.version() == Version::Two {
                 if !arg_str.is_empty() || !no_args_and_over_max_width {
@@ -2169,15 +2196,16 @@ fn rewrite_fn_base(
                 result.push(' ');
             }
 
-            Indent::new(indent.block_indent, last_line_width(&result))
+            let ret_shape = Shape::indented(indent, context.config);
+            ret_shape
+                .offset_left(last_line_width(&result))
+                .unwrap_or(ret_shape)
         };
 
         if multi_line_ret_str || ret_should_indent {
             // Now that we know the proper indent and width, we need to
             // re-layout the return type.
-            let ret_str = fd
-                .output
-                .rewrite(context, Shape::indented(ret_indent, context.config))?;
+            let ret_str = fd.output.rewrite(context, ret_shape)?;
             result.push_str(&ret_str);
         } else {
             result.push_str(&ret_str);
diff --git a/src/types.rs b/src/types.rs
index d09e8c01e38..012cdba3192 100644
--- a/src/types.rs
+++ b/src/types.rs
@@ -6,7 +6,7 @@ use syntax::source_map::{self, BytePos, Span};
 use syntax::symbol::kw;
 
 use crate::config::lists::*;
-use crate::config::{IndentStyle, TypeDensity};
+use crate::config::{IndentStyle, TypeDensity, Version};
 use crate::expr::{format_expr, rewrite_assign_rhs, rewrite_tuple, rewrite_unary_prefix, ExprType};
 use crate::lists::{
     definitive_tactic, itemize_list, write_list, ListFormatting, ListItem, Separator,
@@ -678,9 +678,35 @@ impl Rewrite for ast::Ty {
             // FIXME: we drop any comments here, even though it's a silly place to put
             // comments.
             ast::TyKind::Paren(ref ty) => {
-                let budget = shape.width.checked_sub(2)?;
-                ty.rewrite(context, Shape::legacy(budget, shape.indent + 1))
-                    .map(|ty_str| format!("({})", ty_str))
+                if context.config.version() == Version::One
+                    || context.config.indent_style() == IndentStyle::Visual
+                {
+                    let budget = shape.width.checked_sub(2)?;
+                    return ty
+                        .rewrite(context, Shape::legacy(budget, shape.indent + 1))
+                        .map(|ty_str| format!("({})", ty_str));
+                }
+
+                // 2 = ()
+                if let Some(sh) = shape.sub_width(2) {
+                    if let Some(ref s) = ty.rewrite(context, sh) {
+                        if !s.contains('\n') {
+                            return Some(format!("({})", s));
+                        }
+                    }
+                }
+
+                let indent_str = shape.indent.to_string_with_newline(context.config);
+                let shape = shape
+                    .block_indent(context.config.tab_spaces())
+                    .with_max_width(context.config);
+                let rw = ty.rewrite(context, shape)?;
+                Some(format!(
+                    "({}{}{})",
+                    shape.to_string_with_newline(context.config),
+                    rw,
+                    indent_str
+                ))
             }
             ast::TyKind::Slice(ref ty) => {
                 let budget = shape.width.checked_sub(4)?;
@@ -716,7 +742,15 @@ impl Rewrite for ast::Ty {
             ast::TyKind::ImplicitSelf => Some(String::from("")),
             ast::TyKind::ImplTrait(_, ref it) => {
                 // Empty trait is not a parser error.
-                it.rewrite(context, shape).map(|it_str| {
+                if it.is_empty() {
+                    return Some("impl".to_owned());
+                }
+                let rw = if context.config.version() == Version::One {
+                    it.rewrite(context, shape)
+                } else {
+                    join_bounds(context, shape, it, false)
+                };
+                rw.map(|it_str| {
                     let space = if it_str.is_empty() { "" } else { " " };
                     format!("impl{}{}", space, it_str)
                 })
@@ -818,7 +852,9 @@ fn join_bounds(
     // We need to use multiple lines.
     let (type_strs, offset) = if need_indent {
         // Rewrite with additional indentation.
-        let nested_shape = shape.block_indent(context.config.tab_spaces());
+        let nested_shape = shape
+            .block_indent(context.config.tab_spaces())
+            .with_max_width(context.config);
         let type_strs = items
             .iter()
             .map(|item| item.rewrite(context, nested_shape))
diff --git a/tests/source/issue-3701/one.rs b/tests/source/issue-3701/one.rs
new file mode 100644
index 00000000000..a7f0bd3aa17
--- /dev/null
+++ b/tests/source/issue-3701/one.rs
@@ -0,0 +1,12 @@
+// rustfmt-version: One
+
+fn build_sorted_static_get_entry_names(
+    mut entries: Vec<(u8, &'static str)>,
+) -> (impl Fn(
+    AlphabeticalTraversal,
+    Box<dyn dirents_sink::Sink<AlphabeticalTraversal>>,
+) -> BoxFuture<'static, Result<Box<dyn dirents_sink::Sealed>, Status>>
+      + Send
+      + Sync
+      + 'static) {
+}
diff --git a/tests/source/issue-3701/two.rs b/tests/source/issue-3701/two.rs
new file mode 100644
index 00000000000..8e15c58b8b2
--- /dev/null
+++ b/tests/source/issue-3701/two.rs
@@ -0,0 +1,12 @@
+// rustfmt-version: Two
+
+fn build_sorted_static_get_entry_names(
+    mut entries: Vec<(u8, &'static str)>,
+) -> (impl Fn(
+    AlphabeticalTraversal,
+    Box<dyn dirents_sink::Sink<AlphabeticalTraversal>>,
+) -> BoxFuture<'static, Result<Box<dyn dirents_sink::Sealed>, Status>>
+      + Send
+      + Sync
+      + 'static) {
+}
diff --git a/tests/target/issue-3701/one.rs b/tests/target/issue-3701/one.rs
new file mode 100644
index 00000000000..9d1ef9eed9a
--- /dev/null
+++ b/tests/target/issue-3701/one.rs
@@ -0,0 +1,12 @@
+// rustfmt-version: One
+
+fn build_sorted_static_get_entry_names(
+    mut entries: Vec<(u8, &'static str)>,
+) -> (impl Fn(
+    AlphabeticalTraversal,
+    Box<dyn dirents_sink::Sink<AlphabeticalTraversal>>,
+) -> BoxFuture<'static, Result<Box<dyn dirents_sink::Sealed>, Status>>
+        + Send
+        + Sync
+        + 'static) {
+}
diff --git a/tests/target/issue-3701/two.rs b/tests/target/issue-3701/two.rs
new file mode 100644
index 00000000000..62ffc9d823d
--- /dev/null
+++ b/tests/target/issue-3701/two.rs
@@ -0,0 +1,14 @@
+// rustfmt-version: Two
+
+fn build_sorted_static_get_entry_names(
+    mut entries: Vec<(u8, &'static str)>,
+) -> (
+    impl Fn(
+        AlphabeticalTraversal,
+        Box<dyn dirents_sink::Sink<AlphabeticalTraversal>>,
+    ) -> BoxFuture<'static, Result<Box<dyn dirents_sink::Sealed>, Status>>
+    + Send
+    + Sync
+    + 'static
+) {
+}