diff --git a/packages/pyright-internal/src/analyzer/patternMatching.ts b/packages/pyright-internal/src/analyzer/patternMatching.ts
index 45de6579fa..c64852dae4 100644
--- a/packages/pyright-internal/src/analyzer/patternMatching.ts
+++ b/packages/pyright-internal/src/analyzer/patternMatching.ts
@@ -83,6 +83,7 @@ import {
     mapSubtypes,
     partiallySpecializeType,
     preserveUnknown,
+    shouldUseVarianceForSpecialization,
     specializeTupleClass,
     specializeWithUnknownTypeArgs,
     transformPossibleRecursiveTypeAlias,
@@ -761,9 +762,7 @@ function narrowTypeBasedOnClassPattern(
         exprType = specializeWithUnknownTypeArgs(
             exprType,
             evaluator.getTupleClassType(),
-            // for backwards compatibility with bacly typed code, we don't specialize using variance if the type we're
-            // narrowing is Any/Unknown
-            isAnyOrUnknown(type) || isPartlyUnknown(type) ? undefined : evaluator.getObjectType()
+            shouldUseVarianceForSpecialization(type) ? evaluator.getObjectType() : undefined
         );
     }
 
diff --git a/packages/pyright-internal/src/analyzer/typeGuards.ts b/packages/pyright-internal/src/analyzer/typeGuards.ts
index c1d0c964d5..c830735fa3 100644
--- a/packages/pyright-internal/src/analyzer/typeGuards.ts
+++ b/packages/pyright-internal/src/analyzer/typeGuards.ts
@@ -82,7 +82,6 @@ import {
     isMetaclassInstance,
     isNoneInstance,
     isNoneTypeClass,
-    isPartlyUnknown,
     isProperty,
     isTupleClass,
     isTupleGradualForm,
@@ -92,6 +91,7 @@ import {
     makeTypeVarsFree,
     mapSubtypes,
     MemberAccessFlags,
+    shouldUseVarianceForSpecialization,
     specializeTupleClass,
     specializeWithUnknownTypeArgs,
     stripTypeForm,
@@ -1135,11 +1135,7 @@ export function getIsInstanceClassTypes(
 ): (ClassType | TypeVarType | FunctionType)[] | undefined {
     let foundNonClassType = false;
     const classTypeList: (ClassType | TypeVarType | FunctionType)[] = [];
-    /**
-     * if the type we're narrowing is Any or Unknown, we don't want to specialize using the
-     * variance/bound for compatibility with less strictly typed code (cringe)
-     */
-    const useVarianceForSpecialization = !isAnyOrUnknown(typeToNarrow) && !isPartlyUnknown(typeToNarrow);
+    const useVarianceForSpecialization = shouldUseVarianceForSpecialization(typeToNarrow);
     // Create a helper function that returns a list of class types or
     // undefined if any of the types are not valid.
     const addClassTypesToList = (types: Type[]) => {
diff --git a/packages/pyright-internal/src/analyzer/typeUtils.ts b/packages/pyright-internal/src/analyzer/typeUtils.ts
index 3116faf599..4e394a8d85 100644
--- a/packages/pyright-internal/src/analyzer/typeUtils.ts
+++ b/packages/pyright-internal/src/analyzer/typeUtils.ts
@@ -1053,6 +1053,17 @@ export function getTypeVarScopeIds(type: Type): TypeVarScopeId[] {
     return scopeIds;
 }
 
+/**
+ * if the type we're narrowing is Any or Unknown, we don't want to specialize using the
+ * variance/bound for compatibility with less strictly typed code (cringe)
+ */
+export const shouldUseVarianceForSpecialization = (type: Type) =>
+    !isAnyOrUnknown(type) &&
+    !isPartlyUnknown(type) &&
+    // TODO: this logic should probably be moved into `isAny`/`isUnknown` or something,
+    // to fix issues like https://github.com/DetachHead/basedpyright/issues/746
+    (type.category !== TypeCategory.TypeVar || !type.shared.isSynthesized);
+
 /**
  * Specializes the class with "Unknown" type args (or the equivalent for ParamSpecs or TypeVarTuples), or its
  * widest possible type if its variance is known and {@link objectTypeForVarianceCheck} is provided (`object` if
diff --git a/packages/pyright-internal/src/tests/samples/typeNarrowingUsingBounds.py b/packages/pyright-internal/src/tests/samples/typeNarrowingUsingBounds.py
index c7e2f68a29..1b00ee6f78 100644
--- a/packages/pyright-internal/src/tests/samples/typeNarrowingUsingBounds.py
+++ b/packages/pyright-internal/src/tests/samples/typeNarrowingUsingBounds.py
@@ -1,3 +1,4 @@
+from collections.abc import Mapping
 from typing import Any, Never, assert_type, Iterable
 
 
@@ -44,15 +45,25 @@ def foo(value: object):
 
 class AnyOrUnknown:
     """for backwards compatibility with badly typed code we keep the old functionality when narrowing `Any`/Unknown"""
-    def foo(self, value: Any):
+    def __init__(self, value):
+        """arguments in `__init__` get turned into fake type vars if they're untyped, so we need to handle this case.
+        see https://github.com/DetachHead/basedpyright/issues/746"""
         if isinstance(value, Iterable):
             assert_type(value, Iterable[Any])
 
-    def bar(self, value: Any):
+    def any(self, value: Any):
+        if isinstance(value, Iterable):
+            assert_type(value, Iterable[Any])
+
+    def match_case(self, value: Any):
         match value:
             case Iterable():
                 assert_type(value, Iterable[Any])
 
+    def unknown(self, value):
+        if isinstance(value, Iterable):
+            assert_type(value, Iterable[Any])
+
     def partially_unknown(self, value=None):
         if isinstance(value, Iterable):
             assert_type(value, Iterable[Any])