diff --git a/packages/compiler/src/frontend/lowering/lower-functions.ts b/packages/compiler/src/frontend/lowering/lower-functions.ts
index 6fc083468..8f2c575a4 100644
--- a/packages/compiler/src/frontend/lowering/lower-functions.ts
+++ b/packages/compiler/src/frontend/lowering/lower-functions.ts
@@ -2,6 +2,7 @@ import { declareTypedArguments } from "./typed-arguments.js";
 import { dynUndefinedExpr, varRef } from "../../ir/build.js";
 import { everyStmtList, transformStmtList } from "../../ir/traverse.js";
 import { bindingNeverReassigned } from "./binding-analysis.js";
+import { declareContextLocal } from "./function-context.js";
 import { isErrorFirstErrorType } from "./builtins/arguments.js";
 import { InternalCompilerError } from "../../errors.js";
 import * as ts from "../ts7/adapter.js";
@@ -786,7 +787,8 @@ function lowerUndefinedResultBody(
       lowerer.suppressStats = stats;
     }
   };
-  const slot = lowerer.declareHiddenLocal("%result", DYN);
+  // Mutable: the body may assign to its result (`if (!out) out = ...`).
+  const slot = declareContextLocal(lowerer.ctx, "%result", DYN, true, undefined, undefined);
   const undefinedResult: IrStmt = {
     kind: "varDecl",
     localId: slot.id,
diff --git a/tests/corpus/6920-zlib-callback-error-result.ts b/tests/corpus/6920-zlib-callback-error-result.ts
index cc9128221..5016fa841 100644
--- a/tests/corpus/6920-zlib-callback-error-result.ts
+++ b/tests/corpus/6920-zlib-callback-error-result.ts
@@ -176,6 +176,19 @@ function namedRetry(): void {
   });
 }
 
+function fallbackResult(): void {
+  // The body assigns a fallback Buffer to its result.
+  zlib.inflate(bad, (err, out) => {
+    if (!out) out = Buffer.from("fallback");
+    console.log("fallback", err?.code, typeof out, out.toString());
+    zlib.inflate(good, (err2, out2) => {
+      if (err2) out2 = Buffer.alloc(0);
+      console.log("fallback nested", err2, out2.length);
+      step();
+    });
+  });
+}
+
 function functionValues(next: () => void): void {
   steps.push(
     () => zlib.inflate(good, named),
@@ -203,6 +216,7 @@ function functionValues(next: () => void): void {
     () => zlib.inflate(good, captures),
     nestedForward,
     namedRetry,
+    fallbackResult,
     () => {
       named(new Error("direct"), Buffer.from("both"));
     },