Do not qualify local functions whne complexifying them.

src/EditorFeatures/CSharpTest/CodeActions/InlineTemporary/InlineTemporaryTests.cs

@@ -4848,6 +4848,39 @@ void Test()
     }
 
     object Helper(CancellationToken ct) { return null; }
+}");
+        }
+
+        [WorkItem(8716, "https://github.com/dotnet/roslyn/issues/8716")]
+        [Fact, Trait(Traits.Feature, Traits.Features.CodeActionsInlineTemporary)]
+        public async Task DoNotQualifyInlinedLocalFunction()
+        {
+            await TestInRegularAndScriptAsync(@"
+using System;
+class C
+{
+    void Main()
+    {
+        void LocalFunc()
+        {
+            Console.Write(2);
+        }
+        var [||]local = new Action(LocalFunc);
+        local();
+    }
+}",
+@"
+using System;
+class C
+{
+    void Main()
+    {
+        void LocalFunc()
+        {
+            Console.Write(2);
+        }
+        new Action(LocalFunc)();
+    }
 }");
         }
     }

src/Workspaces/CSharp/Portable/Simplification/CSharpSimplificationService.Expander.cs

@@ -692,7 +692,8 @@ SyntaxToken GetNewIdentifier(SyntaxToken _identifier)
                     }
                     else
                     {
-                        if (!IsPropertyNameOfObjectInitializer(originalSimpleName))
+                        if (!IsPropertyNameOfObjectInitializer(originalSimpleName) &&
+                            !symbol.IsLocalFunction())
                         {
                             ExpressionSyntax left;