Just to note: I consider this bug pretty important. The example function looks artificial, but I got the real failure by combining macros from different packages (`dash.el' for all the `it' bindings, plus `pcase' and `iter2' for lambdas, but I'm pretty sure you could get a failure with nested complicated `pcase' alone, if you want to go "only built-in" route). So, while it is apparently unlikely, you still can stumble into an incomprehensible breakdown in any sofisticated function by nesting enough macros that work otherwise and actually produce code that should work also in this case. But doesn't, when byte-compiled.
Paul