Each bullet below shows a call to `interp' as if tracing the function.
When the argument is a number, identifier, or function expression, we
also show the immediate result.

*  {with {f {with {y 10}                 where [empty]
              {fun {x} {+ x y}}}}
     {with {y 8}
       {f y}}}

* {with {y 10}                 where  [empty]
    {fun {x} {+ x y}}}

* 10                 where   [empty]

* {fun {x} {+ x y}}  where y = 10
 => <<< {fun {x} {+ x y}} where y = 10 >>>, which is a closure

* {with {y 8} {f y}}   where f = <<< {fun {x} {+ x y}} with y = 10 >>>
 
* 8   where f = <<< {fun {x} {+ x y}} with y = 10 >>>
  => 8

* {f y}   where y = 8  and
                f = <<< {fun {x} {+ x y}} with y = 10 >>>
 
*f       where y = 8  and
               f = <<< {fun {x} {+ x y}} with y = 10 >>>
  => <<< {fun {x} {+ x y}} with y = 10 >>>
  
* y       where y = 8  and
             f = <<< {fun {x} {+ x y}} with y = 10 >>>
  =>  8
  
* {+ x y}  with x = 8 and y = 10

* x with x = 8 and y = 10
   => 8

* y with x = 8 and y = 10
   => 10

... so the result is 18.