diff --git a/compiler/fir/checkers/src/org/jetbrains/kotlin/fir/analysis/diagnostics/coneDiagnosticToFirDiagnostic.kt b/compiler/fir/checkers/src/org/jetbrains/kotlin/fir/analysis/diagnostics/coneDiagnosticToFirDiagnostic.kt
index 141be0d..3b45d8c 100644
--- a/compiler/fir/checkers/src/org/jetbrains/kotlin/fir/analysis/diagnostics/coneDiagnosticToFirDiagnostic.kt
+++ b/compiler/fir/checkers/src/org/jetbrains/kotlin/fir/analysis/diagnostics/coneDiagnosticToFirDiagnostic.kt
@@ -314,6 +314,7 @@
                         diagnostic.candidate,
                         typeContext,
                     ),
+                    // For lambda expressions, use their resolved type because `rootCause.actualType` can contain unresolved types
                     actualType = if (rootCause.argument is FirAnonymousFunctionExpression && !rootCause.argument.resolvedType.hasError()) {
                         rootCause.argument.resolvedType
                     } else {
@@ -476,22 +477,19 @@
     val symbol = candidate.symbol as FirCallableSymbol
     val receiverType = (candidate.chosenExtensionReceiver ?: candidate.dispatchReceiver)?.expression?.resolvedType
 
-    return if (expectedType is ConeCapturedType &&
-        expectedType.constructor.projection.kind.let { it == ProjectionKind.OUT || it == ProjectionKind.STAR } &&
-        receiverType != null &&
-        // Ensure we report an actual argument type mismatch of the candidate and not a lambda return expression
-        candidate.argumentMapping.keys.any { it.expression.source == source }
-    ) {
-        FirErrors.MEMBER_PROJECTED_OUT.createOn(
+    return when {
+        expectedType is ConeCapturedType && expectedType.isBasedOnStarOrOut() && receiverType != null &&
+                // Ensure we report an actual argument type mismatch of the candidate and not a lambda return expression
+                candidate.argumentMapping.keys.any { it.expression.source == source }
+            ->
+            FirErrors.MEMBER_PROJECTED_OUT.createOn(
+                source,
+                receiverType,
+                expectedType.projectionKindAsString(),
+                symbol.originalOrSelf(),
+            )
+        else -> FirErrors.ARGUMENT_TYPE_MISMATCH.createOn(
             source,
-            receiverType,
-            expectedType.projectionKindAsString(),
-            symbol.originalOrSelf(),
-        )
-    } else {
-        FirErrors.ARGUMENT_TYPE_MISMATCH.createOn(
-            source,
-            // For lambda expressions, use their resolved type because `rootCause.actualType` can contain unresolved types
             actualType,
             expectedType,
             isMismatchDueToNullability
@@ -499,6 +497,9 @@
     }
 }
 
+private fun ConeCapturedType.isBasedOnStarOrOut(): Boolean =
+    constructor.projection.kind.let { it == ProjectionKind.OUT || it == ProjectionKind.STAR }
+
 private fun UnstableSmartCast.mapUnstableSmartCast(): KtDiagnosticWithParameters4<ConeKotlinType, FirExpression, String, Boolean> {
     val factory = when {
         isImplicitInvokeReceiver -> FirErrors.SMARTCAST_IMPOSSIBLE_ON_IMPLICIT_INVOKE_RECEIVER