diff --git a/src/Compiler/Checking/CheckExpressions.fs b/src/Compiler/Checking/CheckExpressions.fs
index 9f31d7f600e..67473e5d658 100644
--- a/src/Compiler/Checking/CheckExpressions.fs
+++ b/src/Compiler/Checking/CheckExpressions.fs
@@ -5585,9 +5585,13 @@ and TcExprUndelayed (cenv: cenv) (overallTy: OverallTy) env tpenv (synExpr: SynE
         CallExprHasTypeSink cenv.tcSink (m, env.NameEnv, overallTy.Commit, env.AccessRights)
         TcConstExpr cenv overallTy env m tpenv synConst
     | SynExpr.DotLambda (synExpr, m, trivia) ->
-        if env.NameEnv.eUnqualifiedItems |> Map.containsKey "_arg1"
-        then
+        match env.NameEnv.eUnqualifiedItems |> Map.tryFind "_arg1" with        
+        // Compiler-generated _arg items can have more forms, the real underscore will be 1-character wide
+        | Some (Item.Value(valRef)) when valRef.Range.StartColumn+1 = valRef.Range.EndColumn ->
             warning(Error(FSComp.SR.tcAmbiguousDiscardDotLambda(), trivia.UnderscoreRange))
+        | Some _ -> ()
+        | None -> ()
+            
         let unaryArg = mkSynId trivia.UnderscoreRange (cenv.synArgNameGenerator.New())
         let svar = mkSynCompGenSimplePatVar unaryArg
         let pushedExpr = pushUnaryArg synExpr unaryArg
diff --git a/src/Compiler/Driver/CompilerDiagnostics.fs b/src/Compiler/Driver/CompilerDiagnostics.fs
index 9894d505948..831120c812d 100644
--- a/src/Compiler/Driver/CompilerDiagnostics.fs
+++ b/src/Compiler/Driver/CompilerDiagnostics.fs
@@ -389,6 +389,7 @@ type PhasedDiagnostic with
         | 3559 -> false // typrelNeverRefinedAwayFromTop - off by default
         | 3579 -> false // alwaysUseTypedStringInterpolation - off by default
         | 3582 -> false // infoIfFunctionShadowsUnionCase - off by default
+        | 3570 -> false // tcAmbiguousDiscardDotLambda - off by default
         | _ ->
             match x.Exception with
             | DiagnosticEnabledWithLanguageFeature(_, _, _, enabled) -> enabled
diff --git a/tests/FSharp.Compiler.ComponentTests/Language/DotLambdaTests.fs b/tests/FSharp.Compiler.ComponentTests/Language/DotLambdaTests.fs
index f0e5c77e865..1cf65b8c482 100644
--- a/tests/FSharp.Compiler.ComponentTests/Language/DotLambdaTests.fs
+++ b/tests/FSharp.Compiler.ComponentTests/Language/DotLambdaTests.fs
@@ -182,7 +182,32 @@ let ``ToString with F# 7`` () =
     |> typecheck
     |> shouldFail
     |> withSingleDiagnostic (Error 3350, Line 1, Col 16, Line 1, Col 18, "Feature 'underscore dot shorthand for accessor only function' is not available in F# 7.0. Please use language version 8.0 or greater." )
-        
+  
+[<Theory>]
+[<InlineData("let f (a, (b, c)) = _.ToString()")>]
+[<InlineData("""let c = let _ = "test" in "asd" |> _.ToString() """)>]
+[<InlineData("""let a = (fun _almost -> 5 |> _.ToString()) """)>]
+let ``Regression 16276 - hidden discard value`` (code) =
+    Fsx code
+    |> withLangVersion80
+    |> typecheck
+    |> shouldSucceed
+
+[<Fact>]
+let ``Regression 16276 - hidden discard value - nested`` () =
+    Fsx """
+let f (a, (b, c)) = 
+    let _ = 42
+    let _ = 43
+    (fun (a, (b, c)) -> 
+        let _ = 458
+        (fun _ -> 5 |> _.ToString()))"""
+    |> withLangVersion80
+    |> withWarnOn 3570
+    |> typecheck
+    |> shouldFail
+    |> withSingleDiagnostic (Warning 3570, Line 7, Col 24, Line 7, Col 25, "The meaning of _ is ambiguous here. It cannot be used for a discarded variable and a function shorthand in the same scope.")
+
 [<Fact>]
 let ``Simple anonymous unary function shorthands compile`` () =
     FSharp """
@@ -207,6 +232,7 @@ module One
 let a : string = {| Inner =  (fun x -> x.ToString()) |} |> _.Inner([5] |> _.[0])
     """
     |> withLangVersion80
+    |> withWarnOn 3570
     |> typecheck
     |> shouldFail
     |> withDiagnostics [ 
@@ -222,6 +248,7 @@ let b : int -> int -> string = function |5 -> (fun _ -> "Five") |_ -> _.ToString
 let c : string = let _ = "test" in "asd" |> _.ToString()
     """
     |> withLangVersion80
+    |> withWarnOn 3570
     |> typecheck
     |> shouldFail
     |> withSingleDiagnostic (Warning 3570, Line 3, Col 43, Line 3, Col 44, "The meaning of _ is ambiguous here. It cannot be used for a discarded variable and a function shorthand in the same scope.")
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