"Types .. have no overlap" (2367) error when LHS generic type's constraint extends RHS generic type, new in 4.8

[yseymour]

Bug Report

🔎 Search Terms

2367 types overlap generic constraint

🕗 Version & Regression Information

This changed between versions 4.7.4 and 4.8.2.

⏯ Playground Link

Playground link with relevant code

💻 Code

class C<T> {
    constructor(readonly x: T) {}

    good<U extends T>(y: U) {
        if (y === this.x) {}
    }

    bad<U extends T | string>(y: U) {
        if (y === this.x) {} // <- OK in 4.7.4, error in 4.8.2
    }
}

🙁 Actual behavior

The code type-checks OK in 4.7.4.

In 4.8.2 error 2367 (types 'U' and 'T' have no overlap) is thrown on the if guard in bad().

🙂 Expected behavior

T | string includes T, so there is overlap between the two sides of the comparison, therefore the diagnostic seems to be incorrect.