Composing inference of generic parameters from opaque return value in initializers

Swift has a really powerful feature where the generic type of a value can be inferred from a function with an opaque return value.
For example:

func buildSequence() -> some Sequence<Int> {
  return [0, 1, 2]
struct Foo<S: Sequence<Int>> {
  init(_ builder: () -> S) { }
func bar() {
  /// `foo` is inferred to have type `Foo<some Sequence<Int>>`
  let foo = Foo(buildSequence)

Unfortunately, I can't figure out a way to have this functionality compose.
Consider the following code:

extension Foo {
  init<IntermediateS: Sequence<Int>>(wrap: Bool, builder: () -> IntermediateS) {
      // The following doesn't work because `S` is fixed and we are returning `some Sequence<Int>`

If this wasn't an initializer, but a simple function, everything would work as expected, because the generic argument isn't fixed:

func baz() -> some Sequence {

Is this just a limitation of the compiler, or is there a deeper issue here? Is there a workaround to get the Foo extension initializer to infer S from the return value (other than declaring it as a function)?