I believe there’s a bug in InstCombiner::reassociateShiftAmtsOfTwoSameDirectionShifts(), illustrated by https://rise4fun.com/Alive/ne8y. I’ll post a bug on the tracker as soon as I can get an account set up.
Short form: when identifying the two shifts to combine, it does so while ignoring any zero-extensions of those values. In this case, the values are both i1 zero-extended to i3s, so when taking their sum, SimplifyAddInst emits an xor, causing the shift to basically disappear.
I could write more, but the Alive link is probably more concise.
Let me know what you think / if there’s some followup needed, etc.