diff --git a/packages/babel-plugin-proposal-object-rest-spread/src/index.js b/packages/babel-plugin-proposal-object-rest-spread/src/index.js
index 1ac3b3af3b..2bf068e21e 100644
--- a/packages/babel-plugin-proposal-object-rest-spread/src/index.js
+++ b/packages/babel-plugin-proposal-object-rest-spread/src/index.js
@@ -150,6 +150,12 @@ export default function(api, opts) {
 
         path.get("id").traverse(
           {
+            // If there's a default-value AssignmentPattern within the ObjectPattern,
+            // we should not traverse into it, lest we end up in another function body.
+            // (The parent traversal will handle it.)
+            AssignmentPattern(path) {
+              path.skip();
+            },
             RestElement(path) {
               if (!path.parentPath.isObjectPattern()) {
                 // Return early if the parent is not an ObjectPattern, but
diff --git a/packages/babel-plugin-proposal-object-rest-spread/test/fixtures/regression/gh-7388/input.js b/packages/babel-plugin-proposal-object-rest-spread/test/fixtures/regression/gh-7388/input.js
new file mode 100644
index 0000000000..a311921880
--- /dev/null
+++ b/packages/babel-plugin-proposal-object-rest-spread/test/fixtures/regression/gh-7388/input.js
@@ -0,0 +1,12 @@
+function fn0(obj0) {
+  const {
+    fn1 = (obj1 = {}) => {
+      const {
+        fn2 = (obj2 = {}) => {
+          const {a, ...rest} = obj2;
+          console.log(rest);
+        }
+      } = obj1;
+    }
+  } = obj0;
+}
diff --git a/packages/babel-plugin-proposal-object-rest-spread/test/fixtures/regression/gh-7388/output.js b/packages/babel-plugin-proposal-object-rest-spread/test/fixtures/regression/gh-7388/output.js
new file mode 100644
index 0000000000..97254741cb
--- /dev/null
+++ b/packages/babel-plugin-proposal-object-rest-spread/test/fixtures/regression/gh-7388/output.js
@@ -0,0 +1,15 @@
+function fn0(obj0) {
+  const {
+    fn1 = (obj1 = {}) => {
+      const {
+        fn2 = (obj2 = {}) => {
+          const {
+            a
+          } = obj2,
+                rest = babelHelpers.objectWithoutProperties(obj2, ["a"]);
+          console.log(rest);
+        }
+      } = obj1;
+    }
+  } = obj0;
+}