Haskell puzzle

In Haskell, is the following transformation always legal? \x->\y->e transforms to \x y->e After answering this question, please scroll down about 75 lines for a follow-up question. What if the two lambda-bound variables are the same? I.e., the lhs is \x->\x->e Please refer to Section 3.3 of the Haskell 98 Report, para 3 (one line para).