Why

object A {
    sealed class B
    
    class C : B()
    class D : B()
}

gives

cane be inherited only by nested classes

, but

sealed class B
    
class C : B()
class D : B()

works fine?

Looking at the bytecodes decompiled: My example:

object AsasA1 {
    sealed class AsasB1

    class AsasC1 : AsasB1()
    class AsasD1 : AsasB1()
}

sealed class AsasB2

class AsasC2 : AsasB2()
class AsasD2 : AsasB2()

The second case generates:

public abstract class AsasB2 {
   private AsasB2() {
   }

   // $FF: synthetic method
   public AsasB2(DefaultConstructorMarker $constructor_marker) {
      this();
   }
}

while the other one generates:

public abstract static class AsasB1 {
   }

The one inside the

object

do not generates the constructor. Why? Don't know 😞

The ability to extend sealed classes with not nested classes was added in kotlin 1.1

I am on 1.3

something obviously is not working as expected…

So it is probably a bug?

it’s a documented feature, check link above

It's a known limitation that we're considering to lift later: https://youtrack.jetbrains.com/issue/KT-13495

Thanks, voted!