diff --git a/src/ast/nodes/ArrowFunctionExpression.ts b/src/ast/nodes/ArrowFunctionExpression.ts
index 095be186886..16095f924e3 100644
--- a/src/ast/nodes/ArrowFunctionExpression.ts
+++ b/src/ast/nodes/ArrowFunctionExpression.ts
@@ -25,6 +25,7 @@ export default class ArrowFunctionExpression extends FunctionBase {
 	}
 
 	hasEffects(): boolean {
+		if (!this.deoptimized) this.applyDeoptimizations();
 		return false;
 	}
 
diff --git a/src/ast/nodes/shared/FunctionBase.ts b/src/ast/nodes/shared/FunctionBase.ts
index 071db59e72e..44f5b881d84 100644
--- a/src/ast/nodes/shared/FunctionBase.ts
+++ b/src/ast/nodes/shared/FunctionBase.ts
@@ -175,6 +175,7 @@ export default abstract class FunctionBase extends NodeBase implements Deoptimiz
 		includeChildrenRecursively: IncludeChildren,
 		{ includeWithoutParameterDefaults }: InclusionOptions = BLANK
 	): void {
+		if (!this.deoptimized) this.applyDeoptimizations();
 		this.included = true;
 		const { brokenFlow } = context;
 		context.brokenFlow = BROKEN_FLOW_NONE;
@@ -244,6 +245,16 @@ export default abstract class FunctionBase extends NodeBase implements Deoptimiz
 		super.parseNode(esTreeNode);
 	}
 
+	protected applyDeoptimizations() {
+		// We currently do not track deoptimizations of default values, deoptimize them
+		// just as we deoptimize call arguments
+		for (const param of this.params) {
+			if (param instanceof AssignmentPattern) {
+				param.right.deoptimizePath(UNKNOWN_PATH);
+			}
+		}
+	}
+
 	protected abstract getObjectEntity(): ObjectEntity;
 }
 
diff --git a/src/ast/nodes/shared/FunctionNode.ts b/src/ast/nodes/shared/FunctionNode.ts
index 8a88d29de6e..11b0b99314d 100644
--- a/src/ast/nodes/shared/FunctionNode.ts
+++ b/src/ast/nodes/shared/FunctionNode.ts
@@ -39,6 +39,7 @@ export default class FunctionNode extends FunctionBase {
 	}
 
 	hasEffects(): boolean {
+		if (!this.deoptimized) this.applyDeoptimizations();
 		return !!this.id?.hasEffects();
 	}
 
diff --git a/test/function/samples/parameter-defaults/function-as-default/_config.js b/test/function/samples/parameter-defaults/function-as-default/_config.js
new file mode 100644
index 00000000000..5a1f0628785
--- /dev/null
+++ b/test/function/samples/parameter-defaults/function-as-default/_config.js
@@ -0,0 +1,3 @@
+module.exports = {
+	description: 'deoptimizes functions supplied as default values'
+};
diff --git a/test/function/samples/parameter-defaults/function-as-default/main.js b/test/function/samples/parameter-defaults/function-as-default/main.js
new file mode 100644
index 00000000000..f11044a0ac5
--- /dev/null
+++ b/test/function/samples/parameter-defaults/function-as-default/main.js
@@ -0,0 +1,4 @@
+const foo = (a = 'fallback') => a;
+const bar = (a = foo) => a;
+
+assert.strictEqual(bar()(), 'fallback');