diff --git a/lib/FlagDependencyUsagePlugin.js b/lib/FlagDependencyUsagePlugin.js
index 42dd4c0e2da..9531b4b9008 100644
--- a/lib/FlagDependencyUsagePlugin.js
+++ b/lib/FlagDependencyUsagePlugin.js
@@ -20,7 +20,7 @@ const isSubset = (biggerSet, subset) => {
 class FlagDependencyUsagePlugin {
 	apply(compiler) {
 		compiler.hooks.compilation.tap("FlagDependencyUsagePlugin", compilation => {
-			compilation.hooks.optimizeModulesAdvanced.tap(
+			compilation.hooks.optimizeDependencies.tap(
 				"FlagDependencyUsagePlugin",
 				modules => {
 					const processModule = (module, usedExports) => {
@@ -86,9 +86,9 @@ class FlagDependencyUsagePlugin {
 					}
 
 					const queue = [];
-					for (const chunk of compilation.chunks) {
-						if (chunk.entryModule) {
-							processModule(chunk.entryModule, true);
+					for (const preparedEntrypoint of compilation._preparedEntrypoints) {
+						if (preparedEntrypoint.module) {
+							processModule(preparedEntrypoint.module, true);
 						}
 					}
 
diff --git a/lib/dependencies/HarmonyExportImportedSpecifierDependency.js b/lib/dependencies/HarmonyExportImportedSpecifierDependency.js
index b4b2f23442b..d35a2b3e683 100644
--- a/lib/dependencies/HarmonyExportImportedSpecifierDependency.js
+++ b/lib/dependencies/HarmonyExportImportedSpecifierDependency.js
@@ -9,14 +9,27 @@ const HarmonyImportDependency = require("./HarmonyImportDependency");
 const Template = require("../Template");
 const HarmonyLinkingError = require("../HarmonyLinkingError");
 
+/** @typedef {import("../Module")} Module */
+
+/** @typedef {"missing"|"unused"|"empty-star"|"reexport-non-harmony-default"|"reexport-named-default"|"reexport-namespace-object"|"reexport-non-harmony-default-strict"|"reexport-fake-namespace-object"|"rexport-non-harmony-undefined"|"safe-reexport"|"checked-reexport"|"dynamic-reexport"} ExportModeType */
+
+/** @type {Map<string, string>} */
 const EMPTY_MAP = new Map();
 
 class ExportMode {
+	/**
+	 * @param {ExportModeType} type type of the mode
+	 */
 	constructor(type) {
+		/** @type {ExportModeType} */
 		this.type = type;
+		/** @type {string|null} */
 		this.name = null;
+		/** @type {Map<string, string>} */
 		this.map = EMPTY_MAP;
+		/** @type {Module|null} */
 		this.module = null;
+		/** @type {string|null} */
 		this.userRequest = null;
 	}
 }
@@ -51,7 +64,7 @@ class HarmonyExportImportedSpecifierDependency extends HarmonyImportDependency {
 		const name = this.name;
 		const id = this.id;
 		const used = this.originModule.isUsed(name);
-		const importedModule = this.module;
+		const importedModule = this._module;
 
 		if (!importedModule) {
 			const mode = new ExportMode("missing");
@@ -237,7 +250,7 @@ class HarmonyExportImportedSpecifierDependency extends HarmonyImportDependency {
 		const result = new Set();
 		// try to learn impossible exports from other star exports with provided exports
 		for (const otherStarExport of this.otherStarExports) {
-			const otherImportedModule = otherStarExport.module;
+			const otherImportedModule = otherStarExport._module;
 			if (
 				otherImportedModule &&
 				Array.isArray(otherImportedModule.buildMeta.providedExports)
@@ -310,7 +323,7 @@ class HarmonyExportImportedSpecifierDependency extends HarmonyImportDependency {
 	}
 
 	_getErrors() {
-		const importedModule = this.module;
+		const importedModule = this._module;
 		if (!importedModule) {
 			return;
 		}
@@ -354,7 +367,7 @@ class HarmonyExportImportedSpecifierDependency extends HarmonyImportDependency {
 
 	updateHash(hash) {
 		super.updateHash(hash);
-		const hashValue = this.getHashValue(this.module);
+		const hashValue = this.getHashValue(this._module);
 		hash.update(hashValue);
 	}
 
@@ -387,7 +400,7 @@ HarmonyExportImportedSpecifierDependency.Template = class HarmonyExportImportedS
 			const used = dep.originModule.isUsed(dep.name);
 			if (!used) return NaN;
 		} else {
-			const importedModule = dep.module;
+			const importedModule = dep._module;
 
 			const activeFromOtherStarExports = dep._discoverActiveExportsFromOtherStartExports();
 
@@ -424,7 +437,7 @@ HarmonyExportImportedSpecifierDependency.Template = class HarmonyExportImportedS
 	getContent(dep) {
 		const mode = dep.getMode(false);
 		const module = dep.originModule;
-		const importedModule = dep.module;
+		const importedModule = dep._module;
 		const importVar = dep.getImportVar();
 
 		switch (mode.type) {
diff --git a/lib/dependencies/HarmonyImportDependency.js b/lib/dependencies/HarmonyImportDependency.js
index 099318072ff..162c1030037 100644
--- a/lib/dependencies/HarmonyImportDependency.js
+++ b/lib/dependencies/HarmonyImportDependency.js
@@ -11,32 +11,37 @@ const Template = require("../Template");
 class HarmonyImportDependency extends ModuleDependency {
 	constructor(request, originModule, sourceOrder, parserScope) {
 		super(request);
+		this.redirectedModule = undefined;
 		this.originModule = originModule;
 		this.sourceOrder = sourceOrder;
 		this.parserScope = parserScope;
 	}
 
+	get _module() {
+		return this.redirectedModule || this.module;
+	}
+
 	getReference() {
-		if (!this.module) return null;
-		return new DependencyReference(this.module, false, this.weak);
+		if (!this._module) return null;
+		return new DependencyReference(this._module, false, this.weak);
 	}
 
 	getImportVar() {
 		let importVarMap = this.parserScope.importVarMap;
 		if (!importVarMap) this.parserScope.importVarMap = importVarMap = new Map();
-		let importVar = importVarMap.get(this.module);
+		let importVar = importVarMap.get(this._module);
 		if (importVar) return importVar;
 		importVar = `${Template.toIdentifier(
 			`${this.userRequest}`
 		)}__WEBPACK_IMPORTED_MODULE_${importVarMap.size}__`;
-		importVarMap.set(this.module, importVar);
+		importVarMap.set(this._module, importVar);
 		return importVar;
 	}
 
 	getImportStatement(update, runtime) {
 		return runtime.importStatement({
 			update,
-			module: this.module,
+			module: this._module,
 			importVar: this.getImportVar(),
 			request: this.request,
 			originModule: this.originModule
@@ -45,7 +50,7 @@ class HarmonyImportDependency extends ModuleDependency {
 
 	updateHash(hash) {
 		super.updateHash(hash);
-		const importedModule = this.module;
+		const importedModule = this._module;
 		hash.update(
 			(importedModule &&
 				(!importedModule.buildMeta || importedModule.buildMeta.exportsType)) +
@@ -53,6 +58,11 @@ class HarmonyImportDependency extends ModuleDependency {
 		);
 		hash.update((importedModule && importedModule.id) + "");
 	}
+
+	disconnect() {
+		super.disconnect();
+		this.redirectedModule = undefined;
+	}
 }
 
 module.exports = HarmonyImportDependency;
@@ -71,7 +81,7 @@ HarmonyImportDependency.Template = class HarmonyImportDependencyTemplate {
 	static isImportEmitted(dep, source) {
 		let sourceInfo = importEmittedMap.get(source);
 		if (!sourceInfo) return false;
-		const key = dep.module || dep.request;
+		const key = dep._module || dep.request;
 		return key && sourceInfo.emittedImports.get(key);
 	}
 
@@ -85,7 +95,7 @@ HarmonyImportDependency.Template = class HarmonyImportDependencyTemplate {
 				})
 			);
 		}
-		const key = dep.module || dep.request;
+		const key = dep._module || dep.request;
 		if (key && sourceInfo.emittedImports.get(key)) return;
 		sourceInfo.emittedImports.set(key, true);
 		const content = dep.getImportStatement(false, runtime);
diff --git a/lib/dependencies/HarmonyImportSideEffectDependency.js b/lib/dependencies/HarmonyImportSideEffectDependency.js
index dcfb52499a8..a41c1b95bc6 100644
--- a/lib/dependencies/HarmonyImportSideEffectDependency.js
+++ b/lib/dependencies/HarmonyImportSideEffectDependency.js
@@ -11,7 +11,7 @@ class HarmonyImportSideEffectDependency extends HarmonyImportDependency {
 	}
 
 	getReference() {
-		if (this.module && this.module.factoryMeta.sideEffectFree) return null;
+		if (this._module && this._module.factoryMeta.sideEffectFree) return null;
 
 		return super.getReference();
 	}
@@ -23,7 +23,7 @@ class HarmonyImportSideEffectDependency extends HarmonyImportDependency {
 
 HarmonyImportSideEffectDependency.Template = class HarmonyImportSideEffectDependencyTemplate extends HarmonyImportDependency.Template {
 	getHarmonyInitOrder(dep) {
-		if (dep.module && dep.module.factoryMeta.sideEffectFree) return NaN;
+		if (dep._module && dep._module.factoryMeta.sideEffectFree) return NaN;
 		return super.getHarmonyInitOrder(dep);
 	}
 };
diff --git a/lib/dependencies/HarmonyImportSpecifierDependency.js b/lib/dependencies/HarmonyImportSpecifierDependency.js
index b24ffe4fb2a..3a9ba5ae4ef 100644
--- a/lib/dependencies/HarmonyImportSpecifierDependency.js
+++ b/lib/dependencies/HarmonyImportSpecifierDependency.js
@@ -21,6 +21,7 @@ class HarmonyImportSpecifierDependency extends HarmonyImportDependency {
 	) {
 		super(request, originModule, sourceOrder, parserScope);
 		this.id = id === null ? null : `${id}`;
+		this.redirectedId = undefined;
 		this.name = name;
 		this.range = range;
 		this.strictExportPresence = strictExportPresence;
@@ -35,11 +36,15 @@ class HarmonyImportSpecifierDependency extends HarmonyImportDependency {
 		return "harmony import specifier";
 	}
 
+	get _id() {
+		return this.redirectedId || this.id;
+	}
+
 	getReference() {
-		if (!this.module) return null;
+		if (!this._module) return null;
 		return new DependencyReference(
-			this.module,
-			this.id && !this.namespaceObjectAsContext ? [this.id] : true,
+			this._module,
+			this._id && !this.namespaceObjectAsContext ? [this._id] : true,
 			false
 		);
 	}
@@ -65,7 +70,7 @@ class HarmonyImportSpecifierDependency extends HarmonyImportDependency {
 	}
 
 	_getErrors() {
-		const importedModule = this.module;
+		const importedModule = this._module;
 		if (!importedModule) {
 			return;
 		}
@@ -74,11 +79,11 @@ class HarmonyImportSpecifierDependency extends HarmonyImportDependency {
 			// It's not an harmony module
 			if (
 				this.originModule.buildMeta.strictHarmonyModule &&
-				this.id !== "default"
+				this._id !== "default"
 			) {
 				// In strict harmony modules we only support the default export
-				const exportName = this.id
-					? `the named export '${this.id}'`
+				const exportName = this._id
+					? `the named export '${this._id}'`
 					: "the namespace object";
 				return [
 					new HarmonyLinkingError(
@@ -89,20 +94,20 @@ class HarmonyImportSpecifierDependency extends HarmonyImportDependency {
 			return;
 		}
 
-		if (!this.id) {
+		if (!this._id) {
 			return;
 		}
 
-		if (importedModule.isProvided(this.id) !== false) {
+		if (importedModule.isProvided(this._id) !== false) {
 			// It's provided or we are not sure
 			return;
 		}
 
 		// We are sure that it's not provided
 		const idIsNotNameMessage =
-			this.id !== this.name ? ` (imported as '${this.name}')` : "";
+			this._id !== this.name ? ` (imported as '${this.name}')` : "";
 		const errorMessage = `"export '${
-			this.id
+			this._id
 		}'${idIsNotNameMessage} was not found in '${this.userRequest}'`;
 		return [new HarmonyLinkingError(errorMessage)];
 	}
@@ -114,10 +119,10 @@ class HarmonyImportSpecifierDependency extends HarmonyImportDependency {
 
 	updateHash(hash) {
 		super.updateHash(hash);
-		const importedModule = this.module;
-		hash.update((importedModule && this.id) + "");
+		const importedModule = this._module;
+		hash.update((importedModule && this._id) + "");
 		hash.update(
-			(importedModule && this.id && importedModule.isUsed(this.id)) + ""
+			(importedModule && this._id && importedModule.isUsed(this._id)) + ""
 		);
 		hash.update(
 			(importedModule &&
@@ -129,6 +134,11 @@ class HarmonyImportSpecifierDependency extends HarmonyImportDependency {
 				importedModule.used + JSON.stringify(importedModule.usedExports)) + ""
 		);
 	}
+
+	disconnect() {
+		super.disconnect();
+		this.redirectedId = undefined;
+	}
 }
 
 HarmonyImportSpecifierDependency.Template = class HarmonyImportSpecifierDependencyTemplate extends HarmonyImportDependency.Template {
@@ -140,9 +150,9 @@ HarmonyImportSpecifierDependency.Template = class HarmonyImportSpecifierDependen
 
 	getContent(dep, runtime) {
 		const exportExpr = runtime.exportFromImport({
-			module: dep.module,
+			module: dep._module,
 			request: dep.request,
-			exportName: dep.id,
+			exportName: dep._id,
 			originModule: dep.originModule,
 			asiSafe: dep.shorthand,
 			isCall: dep.call,
diff --git a/lib/optimize/ConcatenatedModule.js b/lib/optimize/ConcatenatedModule.js
index 5b744261aaa..32774a94982 100644
--- a/lib/optimize/ConcatenatedModule.js
+++ b/lib/optimize/ConcatenatedModule.js
@@ -308,7 +308,7 @@ class ConcatenatedModule extends Module {
 				for (const d of m.dependencies.filter(
 					dep =>
 						!(dep instanceof HarmonyImportDependency) ||
-						!modulesSet.has(dep.module)
+						!modulesSet.has(dep._module)
 				)) {
 					this.dependencies.push(d);
 				}
@@ -459,7 +459,7 @@ class ConcatenatedModule extends Module {
 						) {
 							const exportName = dep.name;
 							const importName = dep.id;
-							const importedModule = dep.module;
+							const importedModule = dep._module;
 							if (exportName && importName) {
 								if (!reexportMap.has(exportName)) {
 									reexportMap.set(exportName, {
@@ -1145,7 +1145,7 @@ class HarmonyImportSpecifierDependencyConcatenatedTemplate {
 	}
 
 	getHarmonyInitOrder(dep) {
-		const module = dep.module;
+		const module = dep._module;
 		const info = this.modulesMap.get(module);
 		if (!info) {
 			return this.originalTemplate.getHarmonyInitOrder(dep);
@@ -1154,7 +1154,7 @@ class HarmonyImportSpecifierDependencyConcatenatedTemplate {
 	}
 
 	harmonyInit(dep, source, runtimeTemplate, dependencyTemplates) {
-		const module = dep.module;
+		const module = dep._module;
 		const info = this.modulesMap.get(module);
 		if (!info) {
 			this.originalTemplate.harmonyInit(
@@ -1168,7 +1168,7 @@ class HarmonyImportSpecifierDependencyConcatenatedTemplate {
 	}
 
 	apply(dep, source, runtime, dependencyTemplates) {
-		const module = dep.module;
+		const module = dep._module;
 		const info = this.modulesMap.get(module);
 		if (!info) {
 			this.originalTemplate.apply(dep, source, runtime, dependencyTemplates);
@@ -1179,14 +1179,14 @@ class HarmonyImportSpecifierDependencyConcatenatedTemplate {
 		const strictFlag = dep.originModule.buildMeta.strictHarmonyModule
 			? "_strict"
 			: "";
-		if (dep.id === null) {
+		if (dep._id === null) {
 			content = `__WEBPACK_MODULE_REFERENCE__${info.index}_ns${strictFlag}__`;
 		} else if (dep.namespaceObjectAsContext) {
 			content = `__WEBPACK_MODULE_REFERENCE__${
 				info.index
-			}_ns${strictFlag}__[${JSON.stringify(dep.id)}]`;
+			}_ns${strictFlag}__[${JSON.stringify(dep._id)}]`;
 		} else {
-			const exportData = Buffer.from(dep.id, "utf-8").toString("hex");
+			const exportData = Buffer.from(dep._id, "utf-8").toString("hex");
 			content = `__WEBPACK_MODULE_REFERENCE__${
 				info.index
 			}_${exportData}${callFlag}${strictFlag}__`;
@@ -1205,7 +1205,7 @@ class HarmonyImportSideEffectDependencyConcatenatedTemplate {
 	}
 
 	getHarmonyInitOrder(dep) {
-		const module = dep.module;
+		const module = dep._module;
 		const info = this.modulesMap.get(module);
 		if (!info) {
 			return this.originalTemplate.getHarmonyInitOrder(dep);
@@ -1214,7 +1214,7 @@ class HarmonyImportSideEffectDependencyConcatenatedTemplate {
 	}
 
 	harmonyInit(dep, source, runtime, dependencyTemplates) {
-		const module = dep.module;
+		const module = dep._module;
 		const info = this.modulesMap.get(module);
 		if (!info) {
 			this.originalTemplate.harmonyInit(
@@ -1228,7 +1228,7 @@ class HarmonyImportSideEffectDependencyConcatenatedTemplate {
 	}
 
 	apply(dep, source, runtime, dependencyTemplates) {
-		const module = dep.module;
+		const module = dep._module;
 		const info = this.modulesMap.get(module);
 		if (!info) {
 			this.originalTemplate.apply(dep, source, runtime, dependencyTemplates);
@@ -1302,7 +1302,7 @@ class HarmonyExportImportedSpecifierDependencyConcatenatedTemplate {
 	}
 
 	getExports(dep) {
-		const importModule = dep.module;
+		const importModule = dep._module;
 		if (dep.id) {
 			// export { named } from "module"
 			return [
@@ -1336,7 +1336,7 @@ class HarmonyExportImportedSpecifierDependencyConcatenatedTemplate {
 	}
 
 	getHarmonyInitOrder(dep) {
-		const module = dep.module;
+		const module = dep._module;
 		const info = this.modulesMap.get(module);
 		if (!info) {
 			return this.originalTemplate.getHarmonyInitOrder(dep);
@@ -1345,7 +1345,7 @@ class HarmonyExportImportedSpecifierDependencyConcatenatedTemplate {
 	}
 
 	harmonyInit(dep, source, runtime, dependencyTemplates) {
-		const module = dep.module;
+		const module = dep._module;
 		const info = this.modulesMap.get(module);
 		if (!info) {
 			this.originalTemplate.harmonyInit(
@@ -1360,7 +1360,7 @@ class HarmonyExportImportedSpecifierDependencyConcatenatedTemplate {
 
 	apply(dep, source, runtime, dependencyTemplates) {
 		if (dep.originModule === this.rootModule) {
-			if (this.modulesMap.get(dep.module)) {
+			if (this.modulesMap.get(dep._module)) {
 				const exportDefs = this.getExports(dep);
 				for (const def of exportDefs) {
 					const info = this.modulesMap.get(def.module);
diff --git a/lib/optimize/SideEffectsFlagPlugin.js b/lib/optimize/SideEffectsFlagPlugin.js
index e503262a6ea..a38eb2f8a08 100644
--- a/lib/optimize/SideEffectsFlagPlugin.js
+++ b/lib/optimize/SideEffectsFlagPlugin.js
@@ -9,6 +9,15 @@ const HarmonyExportImportedSpecifierDependency = require("../dependencies/Harmon
 const HarmonyImportSideEffectDependency = require("../dependencies/HarmonyImportSideEffectDependency");
 const HarmonyImportSpecifierDependency = require("../dependencies/HarmonyImportSpecifierDependency");
 
+/** @typedef {import("../Module")} Module */
+/** @typedef {import("../Dependency")} Dependency */
+
+/**
+ * @typedef {Object} ExportInModule
+ * @property {Module} module the module
+ * @property {string} exportName the name of the export
+ */
+
 class SideEffectsFlagPlugin {
 	apply(compiler) {
 		compiler.hooks.normalModuleFactory.tap("SideEffectsFlagPlugin", nmf => {
@@ -42,10 +51,12 @@ class SideEffectsFlagPlugin {
 			compilation.hooks.optimizeDependencies.tap(
 				"SideEffectsFlagPlugin",
 				modules => {
+					/** @type {Map<Module, Map<string, ExportInModule>>} */
 					const reexportMaps = new Map();
 
 					// Capture reexports of sideEffectFree modules
 					for (const module of modules) {
+						/** @type {Dependency[]} */
 						const removeDependencies = [];
 						for (const dep of module.dependencies) {
 							if (dep instanceof HarmonyImportSideEffectDependency) {
@@ -72,12 +83,6 @@ class SideEffectsFlagPlugin {
 								}
 							}
 						}
-						for (const dep of removeDependencies) {
-							module.removeDependency(dep);
-							dep.module.reasons = dep.module.reasons.filter(
-								r => r.dependency !== dep
-							);
-						}
 					}
 
 					// Flatten reexports
@@ -97,7 +102,6 @@ class SideEffectsFlagPlugin {
 					}
 
 					// Update imports along the reexports from sideEffectFree modules
-					const updates = [];
 					for (const pair of reexportMaps) {
 						const module = pair[0];
 						const map = pair[1];
@@ -106,28 +110,12 @@ class SideEffectsFlagPlugin {
 							if (dep instanceof HarmonyImportSpecifierDependency) {
 								const mapping = map.get(dep.id);
 								if (mapping) {
-									updates.push({
-										dep,
-										mapping,
-										module,
-										reason
-									});
+									dep.redirectedModule = mapping.module;
+									dep.redirectedId = mapping.exportName;
 								}
 							}
 						}
 					}
-
-					// Execute updates
-					for (const update of updates) {
-						const dep = update.dep;
-						const mapping = update.mapping;
-						const module = update.module;
-						const reason = update.reason;
-						dep.module = mapping.module;
-						dep.id = mapping.exportName;
-						module.removeReason(reason.module, dep);
-						mapping.module.addReason(reason.module, dep);
-					}
 				}
 			);
 		});
diff --git a/test/__snapshots__/StatsTestCases.test.js.snap b/test/__snapshots__/StatsTestCases.test.js.snap
index 6d359b7f07c..e898e401754 100644
--- a/test/__snapshots__/StatsTestCases.test.js.snap
+++ b/test/__snapshots__/StatsTestCases.test.js.snap
@@ -680,15 +680,15 @@ exports[`StatsTestCases should print correct stats for concat-and-sideeffects 1`
     |     ModuleConcatenation bailout: Module is an entry point
     | ./node_modules/pmodule/a.js 49 bytes [built]
     | ./node_modules/pmodule/aa.js 24 bytes [built]
-[1] ./node_modules/pmodule/b.js 49 bytes [built]
+[1] ./node_modules/pmodule/index.js 63 bytes [built]
     ModuleConcatenation bailout: Module is not in any chunk
-[2] ./node_modules/pmodule/bb.js 24 bytes [built]
+[2] ./node_modules/pmodule/b.js 49 bytes [built]
     ModuleConcatenation bailout: Module is not in any chunk
-[3] ./node_modules/pmodule/c.js 49 bytes [built]
+[3] ./node_modules/pmodule/bb.js 24 bytes [built]
     ModuleConcatenation bailout: Module is not in any chunk
-[4] ./node_modules/pmodule/cc.js 24 bytes [built]
+[4] ./node_modules/pmodule/c.js 49 bytes [built]
     ModuleConcatenation bailout: Module is not in any chunk
-[5] ./node_modules/pmodule/index.js 63 bytes [built]
+[5] ./node_modules/pmodule/cc.js 24 bytes [built]
     ModuleConcatenation bailout: Module is not in any chunk"
 `;
 
diff --git a/test/watchCases/side-effects/issue-7400/0/index.js b/test/watchCases/side-effects/issue-7400/0/index.js
new file mode 100644
index 00000000000..d8337fc74ad
--- /dev/null
+++ b/test/watchCases/side-effects/issue-7400/0/index.js
@@ -0,0 +1,6 @@
+import { doStuff } from "./require-me";
+
+it("should compile correctly", () => {
+    expect(doStuff()).toEqual(42);
+    expect(WATCH_STEP).toEqual("0");
+});
\ No newline at end of file
diff --git a/test/watchCases/side-effects/issue-7400/0/my-module/index.js b/test/watchCases/side-effects/issue-7400/0/my-module/index.js
new file mode 100644
index 00000000000..f4cbd0d4ca1
--- /dev/null
+++ b/test/watchCases/side-effects/issue-7400/0/my-module/index.js
@@ -0,0 +1 @@
+export { default as myFunction } from './myFunction'
diff --git a/test/watchCases/side-effects/issue-7400/0/my-module/myFunction.js b/test/watchCases/side-effects/issue-7400/0/my-module/myFunction.js
new file mode 100644
index 00000000000..2433d166ffa
--- /dev/null
+++ b/test/watchCases/side-effects/issue-7400/0/my-module/myFunction.js
@@ -0,0 +1,3 @@
+export default function myFunction() {
+    return 42;
+}
diff --git a/test/watchCases/side-effects/issue-7400/0/my-module/package.json b/test/watchCases/side-effects/issue-7400/0/my-module/package.json
new file mode 100644
index 00000000000..6cb57d98708
--- /dev/null
+++ b/test/watchCases/side-effects/issue-7400/0/my-module/package.json
@@ -0,0 +1,4 @@
+{
+  "module": "index.js",
+  "sideEffects": false
+}
diff --git a/test/watchCases/side-effects/issue-7400/0/require-me.js b/test/watchCases/side-effects/issue-7400/0/require-me.js
new file mode 100644
index 00000000000..b2eaf2c6b3d
--- /dev/null
+++ b/test/watchCases/side-effects/issue-7400/0/require-me.js
@@ -0,0 +1,5 @@
+import { myFunction } from "./my-module";
+
+export function doStuff() {
+    return myFunction();
+}
diff --git a/test/watchCases/side-effects/issue-7400/1/index.js b/test/watchCases/side-effects/issue-7400/1/index.js
new file mode 100644
index 00000000000..080df54a9c0
--- /dev/null
+++ b/test/watchCases/side-effects/issue-7400/1/index.js
@@ -0,0 +1,6 @@
+import { doStuff } from "./require-me";
+
+it("should compile correctly", () => {
+    expect(doStuff()).toEqual(42);
+    expect(WATCH_STEP).toEqual("1");
+});
\ No newline at end of file
diff --git a/test/watchCases/side-effects/issue-7400/webpack.config.js b/test/watchCases/side-effects/issue-7400/webpack.config.js
new file mode 100644
index 00000000000..2bd35aa7c7e
--- /dev/null
+++ b/test/watchCases/side-effects/issue-7400/webpack.config.js
@@ -0,0 +1,5 @@
+module.exports = {
+	optimization: {
+		sideEffects: true
+	}
+};