diff --git a/packages/compiler-cli/src/ngtsc/translator/src/type_translator.ts b/packages/compiler-cli/src/ngtsc/translator/src/type_translator.ts
index 52eb0546392..c1f5e4e3f92 100644
--- a/packages/compiler-cli/src/ngtsc/translator/src/type_translator.ts
+++ b/packages/compiler-cli/src/ngtsc/translator/src/type_translator.ts
@@ -251,14 +251,16 @@ class TypeTranslatorVisitor implements o.ExpressionVisitor, o.TypeVisitor {
   visitWrappedNodeExpr(ast: o.WrappedNodeExpr<any>, context: Context): ts.TypeNode {
     const node: ts.Node = ast.node;
     if (ts.isEntityName(node)) {
-      return ts.factory.createTypeReferenceNode(node, /* typeArguments */ undefined);
+      return ts.factory.createTypeReferenceNode(node);
     } else if (ts.isTypeNode(node)) {
       return node;
     } else if (ts.isLiteralExpression(node)) {
       return ts.factory.createLiteralTypeNode(node);
+    } else if (ts.isTypeParameterDeclaration(node)) {
+      return ts.factory.createTypeReferenceNode(node.name);
     } else {
       throw new Error(
-        `Unsupported WrappedNodeExpr in TypeTranslatorVisitor: ${ts.SyntaxKind[node.kind]}`,
+        `Unsupported WrappedNodeExpr in TypeTranslatorVisitor: ${ts.SyntaxKind[node.kind]} in ${node.getSourceFile()?.fileName}`,
       );
     }
   }
diff --git a/packages/compiler-cli/src/ngtsc/typecheck/src/tcb_adapter.ts b/packages/compiler-cli/src/ngtsc/typecheck/src/tcb_adapter.ts
index 3be223c35d6..d62de049511 100644
--- a/packages/compiler-cli/src/ngtsc/typecheck/src/tcb_adapter.ts
+++ b/packages/compiler-cli/src/ngtsc/typecheck/src/tcb_adapter.ts
@@ -121,7 +121,11 @@ export function adaptTypeCheckBlockMetadata(
       ...adaptGenerics(
         dir.ref.node as ClassDeclaration<ts.ClassDeclaration>,
         env,
-        TcbGenericContextBehavior.UseEmitter,
+        // The directive that we're processing is its own dependency
+        // so we should the same generic context behavior.
+        extractRef(dir.ref).key === extractRef(ref).key
+          ? genericContextBehavior
+          : TcbGenericContextBehavior.UseEmitter,
       ),
     };
 
@@ -201,13 +205,7 @@ export function adaptTypeCheckBlockMetadata(
     },
     component: {
       ref: extractRef(ref as Reference<ClassDeclaration>),
-      ...adaptGenerics(
-        ref.node,
-        env,
-        env.config.useContextGenericType
-          ? genericContextBehavior
-          : TcbGenericContextBehavior.FallbackToAny,
-      ),
+      ...adaptGenerics(ref.node, env, genericContextBehavior),
     },
   };
 }
@@ -224,6 +222,10 @@ function adaptGenerics(
   let typeArguments: string[] | null;
 
   if (node.typeParameters !== undefined && node.typeParameters.length > 0) {
+    if (!env.config.useContextGenericType) {
+      genericContextBehavior = TcbGenericContextBehavior.FallbackToAny;
+    }
+
     switch (genericContextBehavior) {
       case TcbGenericContextBehavior.UseEmitter:
         const emitter = new TypeParameterEmitter(node.typeParameters, env.reflector);
diff --git a/packages/compiler-cli/test/ngtsc/ngtsc_spec.ts b/packages/compiler-cli/test/ngtsc/ngtsc_spec.ts
index 975b9a2bc7b..52b769ccede 100644
--- a/packages/compiler-cli/test/ngtsc/ngtsc_spec.ts
+++ b/packages/compiler-cli/test/ngtsc/ngtsc_spec.ts
@@ -10788,10 +10788,12 @@ runInEachFileSystem((os: string) => {
       expect(codes).toEqual([ngErrorCode(ErrorCode.NGMODULE_BOOTSTRAP_IS_STANDALONE)]);
     });
 
-    it('should compile a component with a complex generic', () => {
-      env.write(
-        'test.ts',
-        `
+    [true, false].forEach((strictTemplates) => {
+      it(`[strictTemplates: ${strictTemplates}] should compile a component with a complex generic`, () => {
+        env.tsconfig({strictTemplates});
+        env.write(
+          'test.ts',
+          `
           import {Component} from '@angular/core';
 
           @Component({
@@ -10803,10 +10805,37 @@ runInEachFileSystem((os: string) => {
             TOptions extends { [K in keyof T]?: T[K] } = object
           > {}
         `,
-      );
+        );
 
-      const diags = env.driveDiagnostics();
-      expect(diags.length).toBe(0);
+        const diags = env.driveDiagnostics();
+        expect(diags.length).toBe(0);
+      });
+
+      // See #67704.
+      it(`[strictTemplates: ${strictTemplates}] should compile a directive with a generic that has type parameters`, () => {
+        env.tsconfig({strictTemplates});
+        env.write(
+          'test.ts',
+          `
+            import {Directive} from '@angular/core';
+
+            type Foo<T> = {prop: T};
+
+            @Directive({
+              host: {
+                '[class.some-class]': 'foo || bar' // Only necessary to enable type checking.
+              },
+            })
+            export class TestDir<T, U = T extends Foo<infer V> ? V : never> {
+              foo?: T;
+              bar?: U;
+            }
+        `,
+        );
+
+        const diags = env.driveDiagnostics();
+        expect(diags.length).toBe(0);
+      });
     });
 
     describe('InjectorDef emit optimizations for standalone', () => {