diff --git a/compiler/src/dotty/tools/dotc/transform/CheckUnused.scala b/compiler/src/dotty/tools/dotc/transform/CheckUnused.scala
index 0629882b2b3d..755bf5fd5b76 100644
--- a/compiler/src/dotty/tools/dotc/transform/CheckUnused.scala
+++ b/compiler/src/dotty/tools/dotc/transform/CheckUnused.scala
@@ -533,6 +533,7 @@ object CheckUnused:
             warnAt(pos)(UnusedSymbol.implicitParams)
       else if sym.isLocalToBlock then
         if ctx.settings.WunusedHas.locals
+          && !sym.is(InlineProxy)
           && !sym.isCanEqual
         then
           warnAt(pos)(UnusedSymbol.localDefs)
diff --git a/tests/warn/i17753.scala b/tests/warn/i17753.scala
new file mode 100644
index 000000000000..66e4fdb8727b
--- /dev/null
+++ b/tests/warn/i17753.scala
@@ -0,0 +1,10 @@
+//> using options -Wunused:all
+
+class PartiallyApplied[A] {
+  transparent inline def func[B](): Nothing = ???
+}
+
+def call[A] = new PartiallyApplied[A]
+
+def good = call[Int].func[String]() // no warn inline proxy
+def bad = { call[Int].func[String]() } // no warn inline proxy