diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.todo-valid-functiondecl-hoisting.expect.md b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.todo-valid-functiondecl-hoisting.expect.md
new file mode 100644
index 0000000000..fb8988c8f8
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.todo-valid-functiondecl-hoisting.expect.md
@@ -0,0 +1,46 @@
+
+## Input
+
+```javascript
+import {Stringify} from 'shared-runtime';
+/**
+ * Also see error.todo-functiondecl-hoisting.tsx which shows *invalid*
+ * compilation cases.
+ *
+ * This bailout specifically is a false positive for since this function's only
+ * reference-before-definition are within other functions which are not invoked.
+ */
+function Foo() {
+  'use memo';
+
+  function foo() {
+    return bar();
+  }
+  function bar() {
+    return 42;
+  }
+
+  return <Stringify fn1={foo} fn2={bar} shouldInvokeFns={true} />;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Foo,
+  params: [],
+};
+
+```
+
+
+## Error
+
+```
+  13 |     return bar();
+  14 |   }
+> 15 |   function bar() {
+     |            ^^^ Todo: [PruneHoistedContexts] Rewrite hoisted function references (15:15)
+  16 |     return 42;
+  17 |   }
+  18 |
+```
+          
+      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.todo-valid-functiondecl-hoisting.tsx b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.todo-valid-functiondecl-hoisting.tsx
new file mode 100644
index 0000000000..063492b89c
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-compiler/src/__tests__/fixtures/compiler/error.todo-valid-functiondecl-hoisting.tsx
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+import {Stringify} from 'shared-runtime';
+/**
+ * Also see error.todo-functiondecl-hoisting.tsx which shows *invalid*
+ * compilation cases.
+ *
+ * This bailout specifically is a false positive for since this function's only
+ * reference-before-definition are within other functions which are not invoked.
+ */
+function Foo() {
+  'use memo';
+
+  function foo() {
+    return bar();
+  }
+  function bar() {
+    return 42;
+  }
+
+  return <Stringify fn1={foo} fn2={bar} shouldInvokeFns={true} />;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Foo,
+  params: [],
+};