diff --git a/lib/install/is-only-dev.js b/lib/install/is-only-dev.js
index ef41e8ad1a265..2877c61a227d0 100644
--- a/lib/install/is-only-dev.js
+++ b/lib/install/is-only-dev.js
@@ -28,6 +28,7 @@ function andIsOnlyDev (name, seen) {
       return isDev && !isProd
     } else {
       if (seen.has(req)) return true
+      seen = new Set(seen)
       seen.add(req)
       return isOnlyDev(req, seen)
     }
diff --git a/lib/install/is-only-optional.js b/lib/install/is-only-optional.js
index 72d6f065e6745..f1b731578d942 100644
--- a/lib/install/is-only-optional.js
+++ b/lib/install/is-only-optional.js
@@ -10,6 +10,7 @@ function isOptional (node, seen) {
   if (seen.has(node) || node.requiredBy.length === 0) {
     return false
   }
+  seen = new Set(seen)
   seen.add(node)
   const swOptional = node.fromShrinkwrap && node.package._optional
   return node.requiredBy.every(function (req) {
diff --git a/test/tap/install-dep-classification.js b/test/tap/install-dep-classification.js
new file mode 100644
index 0000000000000..b5de7e9b8deb1
--- /dev/null
+++ b/test/tap/install-dep-classification.js
@@ -0,0 +1,160 @@
+'use strict'
+var path = require('path')
+var fs = require('graceful-fs')
+var mkdirp = require('mkdirp')
+var rimraf = require('rimraf')
+var test = require('tap').test
+var common = require('../common-tap.js')
+
+var base = path.join(__dirname, path.basename(__filename, '.js'))
+var optionalDir = path.join(base, 'optional')
+var optionalJson = {
+  name: 'optional',
+  version: '1.0.0',
+  optionalDependencies: {
+    'example': '../example-1.0.0.tgz'
+  }
+}
+var devDir = path.join(base, 'dev')
+var devJson = {
+  name: 'dev',
+  version: '1.0.0',
+  devDependencies: {
+    'example': '../example-1.0.0.tgz'
+  }
+}
+
+function setup () {
+  cleanup()
+  mkdirp.sync(optionalDir)
+  fs.writeFileSync(path.join(optionalDir, 'package.json'), JSON.stringify(optionalJson))
+  mkdirp.sync(devDir)
+  fs.writeFileSync(path.join(devDir, 'package.json'), JSON.stringify(devJson))
+
+  fs.writeFileSync(path.join(base, 'example-1.0.0.tgz'), Buffer.from(
+    '1f8b0800000000000003ed8fc10ac2300c8677f62946cedaa5d8f5e0db64' +
+    '5b1853d795758a38f6ee4607e261370722f4bbfce5cb4f493c9527aa39f3' +
+    '73aa63e85cb23288688d4997fc136d304df6b945adad45e9c923375a72ed' +
+    '4596b884817a59e5db7fe65bd277fe0923386a190ec0376afd99610b57ee' +
+    '43d339715aa14231157b7615bbb2e100871148664a65b47b15d450dfa554' +
+    'ccb2f890d3b4f9f57d9148241259e60112d8208a00080000',
+    'hex'
+  ))
+  fs.writeFileSync(path.join(base, 'a-1.0.0.tgz'), Buffer.from(
+    '1f8b0800000000000003edcfc10e82300c0660ce3ec5d2b38e4eb71d789b' +
+    '010d41e358187890f0ee56493c71319218937d977feb9aa50daebab886f2' +
+    'b0a43cc7ce671b4344abb558ab3f2934223b198b4a598bdcc707a38f9c5b' +
+    '0fb2668c83eb79946fff597611effc131378772528c0c11e6ed4c7b6f37c' +
+    '53122572a5a640be265fb514a198a0e43729f3f2f06a9043738779defd7a' +
+    '89244992e4630fd69e456800080000',
+    'hex'
+  ))
+  fs.writeFileSync(path.join(base, 'b-1.0.0.tgz'), Buffer.from(
+    '1f8b08000000000000032b484cce4e4c4fd52f80d07a59c5f9790c540606' +
+    '06066626260ad8c4c1c0d85c81c1d8d4ccc0d0d0cccc00a80ec830353103' +
+    'd2d4760836505a5c925804740aa5e640bca200a78708a856ca4bcc4d55b2' +
+    '524a52d2512a4b2d2acecccf03f20cf50cf40c946ab906da79a360148c82' +
+    '51300a680400106986b400080000',
+    'hex'
+  ))
+}
+
+function cleanup () {
+  rimraf.sync(base)
+}
+
+test('setup', function (t) {
+  setup()
+  t.end()
+})
+
+test('optional dependency identification', function (t) {
+  common.npm(
+    ['install', '--no-optional'],
+    {cwd: optionalDir},
+    function (er, code, stdout, stderr) {
+      t.is(code, 0, 'no error code')
+      t.is(stderr, '', 'no error output')
+      t.notOk(fs.existsSync(path.join(optionalDir, 'node_modules')), 'did not install anything')
+      t.similar(JSON.parse(fs.readFileSync(path.join(optionalDir, 'package-lock.json'), 'utf8')), {
+        dependencies: {
+          a: {
+            version: 'file:../a-1.0.0.tgz',
+            optional: true,
+          },
+          b: {
+            version: 'file:../b-1.0.0.tgz',
+            optional: true
+          },
+          example: {
+            version: "1.0.0",
+            optional: true,
+          }
+        }
+      }, 'locks dependencies as optional')
+      t.end()
+    }
+  )
+})
+
+test('development dependency identification', function (t) {
+  common.npm(
+    ['install', '--only=prod'],
+    {cwd: devDir},
+    function (er, code, stdout, stderr) {
+      t.is(code, 0, 'no error code')
+      t.is(stderr, '', 'no error output')
+      t.notOk(fs.existsSync(path.join(devDir, 'node_modules')), 'did not install anything')
+      t.similar(JSON.parse(fs.readFileSync(path.join(devDir, 'package-lock.json'), 'utf8')), {
+        dependencies: {
+          a: {
+            version: 'file:../a-1.0.0.tgz',
+            dev: true,
+          },
+          b: {
+            version: 'file:../b-1.0.0.tgz',
+            dev: true
+          },
+          example: {
+            version: "1.0.0",
+            dev: true,
+          }
+        }
+      }, 'locks dependencies as dev')
+      t.end()
+    }
+  )
+})
+
+test('default dependency identification', function (t) {
+  common.npm(
+    ['install'],
+    {cwd: optionalDir},
+    function (er, code, stdout, stderr) {
+      t.is(code, 0, 'no error code')
+      t.is(stderr, '', 'no error output')
+      t.similar(JSON.parse(fs.readFileSync(path.join(optionalDir, 'package-lock.json'), 'utf8')), {
+        dependencies: {
+          a: {
+            version: 'file:../a-1.0.0.tgz',
+            optional: true,
+          },
+          b: {
+            version: 'file:../b-1.0.0.tgz',
+            optional: true
+          },
+          example: {
+            version: "1.0.0",
+            optional: true,
+          }
+        }
+      }, 'locks dependencies as optional')
+      t.end()
+    }
+  )
+})
+
+test('cleanup', function (t) {
+  cleanup()
+  t.end()
+})