diff --git a/lib/ansible/module_utils/basic.py b/lib/ansible/module_utils/basic.py
index a95e2697338..354e2d959f6 100644
--- a/lib/ansible/module_utils/basic.py
+++ b/lib/ansible/module_utils/basic.py
@@ -115,9 +115,9 @@ NoneType = type(None)
 # this matters, make sure to check for strings before checking for sequencetype
 try:
     from collections.abc import KeysView
-    SEQUENCETYPE = (Sequence, KeysView)
+    SEQUENCETYPE = (Sequence, frozenset, KeysView)
 except:
-    SEQUENCETYPE = Sequence
+    SEQUENCETYPE = (Sequence, frozenset)
 
 try:
     import json
@@ -2044,7 +2044,7 @@ class AnsibleModule(object):
                     else:
                         fallback_args = item
                 try:
-                    param = fallback_strategy(*fallback_args, **fallback_kwargs)
+                    param[k] = fallback_strategy(*fallback_args, **fallback_kwargs)
                 except AnsibleFallbackNotFound:
                     continue
 
diff --git a/test/units/module_utils/test_basic.py b/test/units/module_utils/test_basic.py
index d15fba61af3..8298697f4c3 100644
--- a/test/units/module_utils/test_basic.py
+++ b/test/units/module_utils/test_basic.py
@@ -260,6 +260,7 @@ class TestModuleUtilsBasic(ModuleTestCase):
 
     def test_module_utils_basic_ansible_module_creation(self):
         from ansible.module_utils import basic
+        from ansible.module_utils.parsing.convert_bool import BOOLEANS
 
         am = basic.AnsibleModule(
             argument_spec=dict(),
@@ -269,7 +270,8 @@ class TestModuleUtilsBasic(ModuleTestCase):
             foo=dict(required=True),
             bar=dict(),
             bam=dict(),
-            baz=dict(),
+            baz=dict(fallback=(basic.env_fallback, ['BAZ'])),
+            bar1=dict(type='bool', choices=BOOLEANS)
         )
         mut_ex = (('bar', 'bam'),)
         req_to = (('bam', 'baz'),)
@@ -342,16 +344,50 @@ class TestModuleUtilsBasic(ModuleTestCase):
                 supports_check_mode=True,
             )
 
+        # test fallback, should test ok as value of param required due to another param
+        # is set by environment variable
+        os.environ['BAZ'] = 'bad'
+        args = json.dumps(dict(ANSIBLE_MODULE_ARGS={"foo": "hello", "bam": "bad"}))
+
+        with swap_stdin_and_argv(stdin_data=args):
+            basic._ANSIBLE_ARGS = None
+            am = basic.AnsibleModule(
+                argument_spec=arg_spec,
+                mutually_exclusive=mut_ex,
+                required_together=req_to,
+                no_log=True,
+                check_invalid_arguments=False,
+                add_file_common_args=True,
+                supports_check_mode=True,
+            )
+        os.environ.pop('BAZ', None)
+
+        # should test ok, check for boolean values
+        args = json.dumps(dict(ANSIBLE_MODULE_ARGS={"foo": "hello", "bar1": "yes"}))
+        with swap_stdin_and_argv(stdin_data=args):
+            basic._ANSIBLE_ARGS = None
+            am = basic.AnsibleModule(
+                argument_spec=arg_spec,
+                mutually_exclusive=mut_ex,
+                required_together=req_to,
+                no_log=True,
+                check_invalid_arguments=False,
+                add_file_common_args=True,
+                supports_check_mode=True,
+            )
+
     def test_module_utils_basic_ansible_module_with_options_creation(self):
         from ansible.module_utils import basic
+        from ansible.module_utils.parsing.convert_bool import BOOLEANS
 
         options_spec = dict(
             foo=dict(required=True, aliases=['dup']),
             bar=dict(),
             bam=dict(),
-            baz=dict(),
+            baz=dict(fallback=(basic.env_fallback, ['BAZ'])),
             bam1=dict(),
-            bam2=dict(default='test')
+            bam2=dict(default='test'),
+            bam3=dict(type='bool', choices=BOOLEANS)
         )
         arg_spec = dict(
             foobar=dict(
@@ -509,6 +545,34 @@ class TestModuleUtilsBasic(ModuleTestCase):
                 supports_check_mode=True
             )
 
+        # test fallback, should test ok as value of param required due to another param
+        # is set by environment variable
+        os.environ['BAZ'] = 'bad'
+        args = json.dumps(dict(ANSIBLE_MODULE_ARGS={"foo": "hello", "bam": "bad"}))
+
+        with swap_stdin_and_argv(stdin_data=args):
+            basic._ANSIBLE_ARGS = None
+            am = basic.AnsibleModule(
+                argument_spec=arg_spec,
+                no_log=True,
+                check_invalid_arguments=False,
+                add_file_common_args=True,
+                supports_check_mode=True,
+            )
+        os.environ.pop('BAZ', None)
+
+        # should test ok, check for boolean values
+        args = json.dumps(dict(ANSIBLE_MODULE_ARGS={"foo": "hello", "bam3": "yes"}))
+        with swap_stdin_and_argv(stdin_data=args):
+            basic._ANSIBLE_ARGS = None
+            am = basic.AnsibleModule(
+                argument_spec=arg_spec,
+                no_log=True,
+                check_invalid_arguments=False,
+                add_file_common_args=True,
+                supports_check_mode=True,
+            )
+
     def test_module_utils_basic_ansible_module_type_check(self):
         from ansible.module_utils import basic