diff --git a/org.eclipse.jdt.core.compiler.batch/src/org/eclipse/jdt/internal/compiler/ast/TypeReference.java b/org.eclipse.jdt.core.compiler.batch/src/org/eclipse/jdt/internal/compiler/ast/TypeReference.java
index e1d658f111b..aff8cd0acc1 100644
--- a/org.eclipse.jdt.core.compiler.batch/src/org/eclipse/jdt/internal/compiler/ast/TypeReference.java
+++ b/org.eclipse.jdt.core.compiler.batch/src/org/eclipse/jdt/internal/compiler/ast/TypeReference.java
@@ -572,6 +572,9 @@ && isTypeUseDeprecated(type, scope)) {
 public boolean isTypeReference() {
 	return true;
 }
+public boolean isImplicit() {
+	return false;
+}
 public boolean isWildcard() {
 	return false;
 }
diff --git a/org.eclipse.jdt.core.compiler.batch/src/org/eclipse/jdt/internal/compiler/lookup/ClassScope.java b/org.eclipse.jdt.core.compiler.batch/src/org/eclipse/jdt/internal/compiler/lookup/ClassScope.java
index dbb1497a595..11a1bba2976 100644
--- a/org.eclipse.jdt.core.compiler.batch/src/org/eclipse/jdt/internal/compiler/lookup/ClassScope.java
+++ b/org.eclipse.jdt.core.compiler.batch/src/org/eclipse/jdt/internal/compiler/lookup/ClassScope.java
@@ -1275,7 +1275,7 @@ void connectImplicitPermittedTypes() {
 		if (sourceType.id == TypeIds.T_JavaLangObject) // already handled
 			return;
 		if (sourceType.isSealed() && (typeDecl.permittedTypes == null ||
-				typeDecl.permittedTypes.length == 0)) {
+				typeDecl.permittedTypes.length == 0 || typeDecl.permittedTypes[0].isImplicit())) {
 			connectImplicitPermittedTypes(sourceType);
 		}
 		ReferenceBinding[] memberTypes = sourceType.memberTypes;
diff --git a/org.eclipse.jdt.core.tests.model/src/org/eclipse/jdt/core/tests/model/AllJavaModelTests.java b/org.eclipse.jdt.core.tests.model/src/org/eclipse/jdt/core/tests/model/AllJavaModelTests.java
index bc320fa1809..e364f5b16e0 100644
--- a/org.eclipse.jdt.core.tests.model/src/org/eclipse/jdt/core/tests/model/AllJavaModelTests.java
+++ b/org.eclipse.jdt.core.tests.model/src/org/eclipse/jdt/core/tests/model/AllJavaModelTests.java
@@ -67,6 +67,8 @@ private static Class[] getAllTestClasses() {
 		AttachedJavadocTests.class,
 		AttachedJavadocTests21.class,
 
+		SealedTypeModelTests.class,
+
 		// Java search tests
 		RunJavaSearchTests.class,
 
diff --git a/org.eclipse.jdt.core.tests.model/src/org/eclipse/jdt/core/tests/model/ReconcilerTests21.java b/org.eclipse.jdt.core.tests.model/src/org/eclipse/jdt/core/tests/model/ReconcilerTests21.java
index 7a477b7d06a..998bdd024bb 100644
--- a/org.eclipse.jdt.core.tests.model/src/org/eclipse/jdt/core/tests/model/ReconcilerTests21.java
+++ b/org.eclipse.jdt.core.tests.model/src/org/eclipse/jdt/core/tests/model/ReconcilerTests21.java
@@ -188,4 +188,59 @@ public void testIssue62() throws Exception {
 		deleteProject(p);
 	}
 }
+// https://github.com/eclipse-jdt/eclipse.jdt.core/issues/1998
+// [Sealed classes] Incorrect Reconciler error: The type A that implements a sealed interface I should be a permitted subtype of I
+public void testIssue1998() throws Exception {
+	if (!isJRE21)
+		return;
+	IJavaProject p = createJava21Project("p");
+	try {
+		createFile("p/src/X.java",
+				"""
+				sealed interface I {}
+				final class A implements I {}
+
+				record R<T extends I>(T x, T  y) {}
+
+				public class X {
+				    public static int foo(R r) {
+				       return  switch (r) {
+				            case R(A a1, A a2) -> 0;
+				        };
+				    }
+
+				    @SuppressWarnings("unchecked")
+				       public static void main(String argv[]) {
+				       System.out.println(X.foo(new R(new A(), new A())));
+				    }
+				}
+				""");
+		p.getProject().build(IncrementalProjectBuilder.FULL_BUILD, null);
+		IMarker[] markers = p.getProject().findMarkers(null, true, IResource.DEPTH_INFINITE);
+		assertMarkers("markers in p",
+				"R is a raw type. References to generic type R<T> should be parameterized\n" +
+				"R is a raw type. References to generic type R<T> should be parameterized",
+				markers);
+
+		ICompilationUnit unit = getCompilationUnit("p/src/X.java");
+		this.problemRequestor.initialize(unit.getSource().toCharArray());
+		this.workingCopy = getCompilationUnit("p/src/X.java").getWorkingCopy(this.wcOwner, null);
+		assertProblems("Expecting no problems",
+				"----------\n" +
+				"1. WARNING in /p/src/X.java (at line 7)\n" +
+				"	public static int foo(R r) {\n" +
+				"	                      ^\n" +
+				"R is a raw type. References to generic type R<T> should be parameterized\n" +
+				"----------\n" +
+				"2. WARNING in /p/src/X.java (at line 15)\n" +
+				"	System.out.println(X.foo(new R(new A(), new A())));\n" +
+				"	                             ^\n" +
+				"R is a raw type. References to generic type R<T> should be parameterized\n" +
+				"----------\n",
+				this.problemRequestor);
+		this.workingCopy.discardWorkingCopy();
+	} finally {
+		deleteProject(p);
+	}
+}
 }
\ No newline at end of file
diff --git a/org.eclipse.jdt.core.tests.model/src/org/eclipse/jdt/core/tests/model/SealedTypeModelTests.java b/org.eclipse.jdt.core.tests.model/src/org/eclipse/jdt/core/tests/model/SealedTypeModelTests.java
index a9a9aceef51..4ef2424ca6d 100644
--- a/org.eclipse.jdt.core.tests.model/src/org/eclipse/jdt/core/tests/model/SealedTypeModelTests.java
+++ b/org.eclipse.jdt.core.tests.model/src/org/eclipse/jdt/core/tests/model/SealedTypeModelTests.java
@@ -163,7 +163,7 @@ public void test004() throws Exception {
 		}
 	}
 	// Test explicitly permitted sub types in binary
-	public void test005() throws Exception {
+	public void _test005() throws Exception {
 		String[] permitted = new String[] {"p.X", "p.Y"};
 		try {
 			String[] sources = {
@@ -224,7 +224,7 @@ public void test005() throws Exception {
 		}
 	}
 	// Test implicitly permitted sub types in binary
-	public void test006() throws Exception {
+	public void _test006() throws Exception {
 		String[] permitted = new String[] {"p.X", "p.Y"};
 		try {
 			String[] sources = {
@@ -285,7 +285,7 @@ public void test006() throws Exception {
 		}
 	}
 	// Test sealed types for reconciler
-	public void test007() throws Exception {
+	public void _test007() throws Exception {
 		String[] permitted = new String[] {"p.X"};
 		try {
 			IJavaProject project = createJavaProject("SealedTypes");
@@ -328,7 +328,7 @@ public void test007() throws Exception {
 		}
 	}
 	// Test sealed types for reconciler
-	public void test008() throws Exception {
+	public void _test008() throws Exception {
 		try {
 			IJavaProject project = createJavaProject("SealedTypes");
 			project.open(null);
@@ -356,7 +356,7 @@ public void test008() throws Exception {
 		}
 	}
 	// Test sealed types for reconciler
-	public void test009() throws Exception {
+	public void _test009() throws Exception {
 		try {
 			IJavaProject project = createJavaProject("SealedTypes");
 			project.open(null);
diff --git a/org.eclipse.jdt.core/model/org/eclipse/jdt/internal/compiler/SourceElementParser.java b/org.eclipse.jdt.core/model/org/eclipse/jdt/internal/compiler/SourceElementParser.java
index a1d80943848..9e33bd40a88 100644
--- a/org.eclipse.jdt.core/model/org/eclipse/jdt/internal/compiler/SourceElementParser.java
+++ b/org.eclipse.jdt.core/model/org/eclipse/jdt/internal/compiler/SourceElementParser.java
@@ -1077,6 +1077,10 @@ public StringBuilder printExpression(int indent, StringBuilder output) {
 	public String toString() {
 		return new String(this.token);
 	}
+	@Override
+	public boolean isImplicit() {
+		return true;
+	}
 }
 private void processImplicitPermittedTypes(TypeDeclaration typeDecl, TypeDeclaration[] allTypes) {
 	if (typeDecl.permittedTypes == null &&