diff --git a/src/lj_asm.c b/src/lj_asm.c
index 0a5e25b3fa..3daeb8b1dd 100644
--- a/src/lj_asm.c
+++ b/src/lj_asm.c
@@ -894,11 +894,11 @@ static int asm_sunk_store(ASMState *as, IRIns *ira, IRIns *irs)
 static void asm_snap_alloc1(ASMState *as, IRRef ref)
 {
   IRIns *ir = IR(ref);
-  if (!irref_isk(ref) && ir->r != RID_SUNK) {
+  if (!irref_isk(ref)) {
     bloomset(as->snapfilt1, ref);
     bloomset(as->snapfilt2, hashrot(ref, ref + HASH_BIAS));
     if (ra_used(ir)) return;
-    if (ir->r == RID_SINK) {
+    if (ir->r == RID_SINK || ir->r == RID_SUNK) {
       ir->r = RID_SUNK;
 #if LJ_HASFFI
       if (ir->o == IR_CNEWI) {  /* Allocate CNEWI value. */
diff --git a/test/tarantool-tests/lj-1295-bad-renames-for-sunk-values.test.lua b/test/tarantool-tests/lj-1295-bad-renames-for-sunk-values.test.lua
new file mode 100644
index 0000000000..9291fca4e9
--- /dev/null
+++ b/test/tarantool-tests/lj-1295-bad-renames-for-sunk-values.test.lua
@@ -0,0 +1,111 @@
+local tap = require('tap')
+
+-- Test file to demonstrate LuaJIT assembler misbehaviour.
+-- For more info, proceed to the issues:
+-- * https://github.com/LuaJIT/LuaJIT/issues/584,
+-- * https://github.com/LuaJIT/LuaJIT/issues/1295,
+-- * https://github.com/tarantool/tarantool/issues/10746.
+
+local test = tap.test('lj-1295-bad-renames-for-sunk-values'):skipcond({
+  ['Test requires JIT enabled'] = not jit.status(),
+})
+
+test:plan(1)
+
+-- XXX: The reproducer requires specific snapshotting and register
+-- allocations, so the reproducer mostly copies the relevant code
+-- from https://github.com/luafun/luafun.
+
+----- Related part of luafun.lua. --------------------------------
+
+local iterator_mt = {
+  -- Usually called by the for-in loop.
+  __call = function(self, param, state)
+    return self.gen(param, state)
+  end,
+}
+
+local wrap = function(gen, param, state)
+  return setmetatable({
+    gen = gen,
+    param = param,
+    state = state
+  }, iterator_mt), param, state
+end
+
+-- These functions call each other to implement a flat iterator
+-- over the several iterable objects.
+local chain_gen_r1
+local chain_gen_r2 = function(param, state, state_x, ...)
+  if state_x == nil then
+    local i = state[1]
+    i = i + 1
+    if param[3 * i - 2] == nil then
+      return nil
+    end
+    return chain_gen_r1(param, {i, param[3 * i]})
+  end
+  return {state[1], state_x}, ...
+end
+
+chain_gen_r1 = function(param, state)
+  local i, _ = state[1], state[2]
+  local gen_x, param_x = param[3 * i - 2], param[3 * i - 1]
+  return chain_gen_r2(param, state, gen_x(param_x, state[2]))
+end
+
+local chain = function(...)
+  local n = select('#', ...)
+  local param = { [3 * n] = 0 }
+  local gen_x, param_x, state_x
+  for i = 1, n do
+    local elem = select(i, ...)
+    -- Put gen, param, state into param table.
+    gen_x, param_x, state_x = wrap(ipairs(elem))
+    param[3 * i - 2] = gen_x
+    param[3 * i - 1] = param_x
+    param[3 * i] = state_x
+  end
+
+  return wrap(chain_gen_r1, param, {1, param[3]})
+end
+
+----- Reproducer. ------------------------------------------------
+
+-- XXX: Should be different tables.
+local a = {{'a'}, {'a'}}
+local b = {{'a'}, {'a'}}
+
+-- XXX: Here one can find the rationale for the 'hotloop' value.
+-- 1. The innermost loop in a bunch of calls tries to compile the
+-- `__call` metamethod first, but this trace is aborted due to
+-- leaving the `for _ in` loop.
+-- 2. The trace we are interested in started to compile: this is
+-- the inner `for _ in` loop with the full inlined body.
+--
+-- The chain loop in this case iterates over 4 elements. Hence, 2
+-- iterations of the outer loop are not enough. The trace
+-- mentioned in 2 is recorded on the 8th inner cycle iteration but
+-- never started. Hence, let's run 3 iterations of the outer loop
+-- instead.
+
+-- JIT fine-tuning via the 'hotloop' option allows us to catch
+-- this elusive case, which we achieved in the last bullet. The
+-- reason why this case leads to misbehaviour while restoring the
+-- guest stack at the trace exit is described in the following
+-- LuaJIT issue: https://github.com/LuaJIT/LuaJIT/issues/1295.
+
+-- Specific `hotloop` to get only one trace we are interested in.
+jit.opt.start('hotloop=7')
+
+xpcall(function()
+  for _ = 1, 3 do
+    for _ in chain(a, b) do
+    end
+  end
+  test:ok('All emitted RENAMEs are fine')
+end, function()
+  test:fail('Invalid Lua stack has been restored')
+end)
+
+test:done(true)