diff --git a/src/ast/rewriter/seq_derive.cpp b/src/ast/rewriter/seq_derive.cpp
index df34cec28..2b62f4551 100644
--- a/src/ast/rewriter/seq_derive.cpp
+++ b/src/ast/rewriter/seq_derive.cpp
@@ -1246,21 +1246,18 @@ namespace seq {
     // Intersect the active suffix m_intervals[m_intervals_start..end] with [lo, hi]
     void derive::intersect_intervals(unsigned lo, unsigned hi) {
         // Copy active suffix to end, update start, then filter
-        unsigned old_start = m_intervals_start;
         unsigned old_sz = m_intervals.size();
-        for (unsigned i = old_start; i < old_sz; ++i)
+        for (unsigned i = m_intervals_start; i < old_sz; ++i)
             m_intervals.push_back(m_intervals[i]);
         m_intervals_start = old_sz;
-        // Filter in-place within new suffix
+        // Filter in-place within new suffix: drop intervals disjoint from [lo,hi],
+        // keep the intersection for overlapping ones.
         unsigned j = m_intervals_start;
         for (unsigned i = m_intervals_start; i < m_intervals.size(); ++i) {
             auto [lo1, hi1] = m_intervals[i];
-            if (hi < lo1 || lo > hi1) {
-                j = old_sz;
-                break;
-            }
-            if (hi1 >= lo)
-                m_intervals[j++] = {std::max(lo1, lo), std::min(hi1, hi)};
+            if (hi < lo1 || lo > hi1)
+                continue;  // disjoint with this interval — drop it
+            m_intervals[j++] = {std::max(lo1, lo), std::min(hi1, hi)};
         }
         m_intervals.shrink(j);
     }
diff --git a/src/test/CMakeLists.txt b/src/test/CMakeLists.txt
index 39050620a..1de8d625e 100644
--- a/src/test/CMakeLists.txt
+++ b/src/test/CMakeLists.txt
@@ -113,6 +113,7 @@ add_executable(test-z3
   polynomial_factorization.cpp
   polynorm.cpp
   prime_generator.cpp
+  seq_regex_bisim.cpp
   proof_checker.cpp
   qe_arith.cpp
   mbp_qel.cpp
diff --git a/src/test/main.cpp b/src/test/main.cpp
index 1727cb9dc..20bc0f748 100644
--- a/src/test/main.cpp
+++ b/src/test/main.cpp
@@ -193,7 +193,8 @@
     X(ho_matcher) \
     X(finite_set) \
     X(finite_set_rewriter) \
-    X(fpa)
+    X(fpa) \
+    X(seq_regex_bisim)
 
 #define FOR_EACH_TEST(X, X_ARGV) \
     FOR_EACH_ALL_TEST(X, X_ARGV) \
diff --git a/src/test/seq_regex_bisim.cpp b/src/test/seq_regex_bisim.cpp
new file mode 100644
index 000000000..bfe3f02e9
--- /dev/null
+++ b/src/test/seq_regex_bisim.cpp
@@ -0,0 +1,72 @@
+// Regression test for the seq::derive::intersect_intervals bug.
+//
+// Background: derive uses a path-tracking interval set to compute symbolic
+// derivatives.  The intersect_intervals routine used to react to a single
+// disjoint interval by dropping the entire kept suffix and skipping the rest
+// of the list, which silently killed valid branches in derivatives such as
+// D(a|b).  That made the bisimulation procedure conclude bogus equalities
+// like a* == (a|b)*.
+//
+// This test asserts the basic shape of the derivative and the bisim result
+// for that minimal case, so the bug cannot silently regress.
+#include "ast/ast.h"
+#include "ast/ast_pp.h"
+#include "ast/reg_decl_plugins.h"
+#include "ast/seq_decl_plugin.h"
+#include "ast/rewriter/seq_rewriter.h"
+#include "ast/rewriter/seq_regex_bisim.h"
+#include <iostream>
+
+static void test_a_star_neq_ab_star() {
+    ast_manager m;
+    reg_decl_plugins(m);
+    seq_util u(m);
+    seq_rewriter rw(m);
+
+    sort_ref str_sort(u.str.mk_string_sort(), m);
+
+    zstring sa("a"), sb("b");
+    expr_ref re_a(u.re.mk_to_re(u.str.mk_string(sa)), m);
+    expr_ref re_b(u.re.mk_to_re(u.str.mk_string(sb)), m);
+    expr_ref a_star(u.re.mk_star(re_a), m);
+    expr_ref ab(u.re.mk_union(re_a, re_b), m);
+    expr_ref ab_star(u.re.mk_star(ab), m);
+
+    expr_ref d_ab = rw.mk_brz_derivative(ab);
+    std::cout << "D(a|b) = " << mk_pp(d_ab, m) << "\n";
+
+    // Both the 'a' branch and the 'b' branch of D(a|b) must reach epsilon.
+    // Collect the regex leaves of the symbolic derivative and require at
+    // least two distinct accepting leaves (one for 'a' and one for 'b').
+    expr_ref_vector leaves(m);
+    auto collect = [&](expr* e, auto&& self) -> void {
+        expr* c, *t, *f;
+        if (m.is_ite(e, c, t, f) || u.re.is_union(e, t, f) || u.re.is_antimirov_union(e, t, f)) {
+            self(t, self);
+            self(f, self);
+            return;
+        }
+        if (u.re.is_empty(e)) return;
+        leaves.push_back(e);
+    };
+    collect(d_ab, collect);
+    unsigned nullable_leaves = 0;
+    for (expr* l : leaves) {
+        expr_ref n = rw.is_nullable(l);
+        if (m.is_true(n)) ++nullable_leaves;
+    }
+    std::cout << "D(a|b) leaves=" << leaves.size()
+              << " nullable=" << nullable_leaves << "\n";
+    ENSURE(nullable_leaves >= 2);
+
+    // Bisim must report the two languages are not equivalent.
+    seq::regex_bisim bisim(rw);
+    lbool eq = bisim.are_equivalent(a_star, ab_star);
+    std::cout << "bisim(a*, (a|b)*) = "
+              << (eq == l_true ? "true" : eq == l_false ? "false" : "undef") << "\n";
+    ENSURE(eq == l_false);
+}
+
+void tst_seq_regex_bisim() {
+    test_a_star_neq_ab_star();
+}