diff --git a/mypy/checker.py b/mypy/checker.py
index 5a74f019dcf47..dd0f05c5eee91 100644
--- a/mypy/checker.py
+++ b/mypy/checker.py
@@ -5655,7 +5655,7 @@ def has_no_custom_eq_checks(t: Type) -> bool:
                             ) and not custom_special_method(t, "__ne__", check_all=False)
 
                         is_valid_target = is_exactly_literal_type
-                        coerce_only_in_literal_context = True
+                        coerce_only_in_literal_context = False
 
                         expr_types = [operand_types[i] for i in expr_indices]
                         should_narrow_by_identity = all(map(has_no_custom_eq_checks, expr_types))