This is only used in Do Notation with refutable patterns. e.g.:

    do  Just a <- m
        k a

Is desugared as:

    let f (Just a) = k a
        f _        = fail "Pattern match failure in do expression..."    
    in m >>= k

With -XApplicativeDo, there are two outstanding issues:

First, This will not compile (https:/ghc.haskell.orgtracghcticket/13648) as the body statements m1 and m2 are desugared incorrectly:

    f m1 m2 k = do
        m1
        m2
        k

To resolve, replace m1 with _ <- m1.

Second, fail must be in scope (https:/ghc.haskell.orgtracghcticket/13649) when wildcard patterns are used. The module Prelude.Graphted takes care of this, and custom preludes must as well. A GMonadFail constraint will not be added unless a refutable pattern is used.