[ty] fix inferring type variable from string literal argument

crates/ty_python_semantic/resources/mdtest/generics/legacy/functions.md

@@ -880,3 +880,31 @@ def f(x: T) -> T:
 def g(x: S) -> S:
     return f(x)  # error: [invalid-argument-type]
 ```
+
+## Inferring typevars in iterable parameters from literal string and bytes arguments
+
+```py
+from typing import Iterable, TypeVar
+from typing_extensions import LiteralString
+
+FlatT = TypeVar("FlatT")
+
+def flatten(*iterables: Iterable[FlatT]) -> list[FlatT]:
+    return [x for iterable in iterables for x in iterable]
+
+def flatten_covariant(*iterables: Iterable[FlatT]) -> tuple[FlatT, ...]:
+    return tuple(x for iterable in iterables for x in iterable)
+
+reveal_type(flatten("abc", (1, 2, 3)))  # revealed: list[str | int]
+# TODO: we could have `Literal["a", "b", "c"]` instead of `str` here
+reveal_type(flatten_covariant("abc", (1, 2, 3)))  # revealed: tuple[str | Literal[1, 2, 3], ...]
+
+def literal_string_case(literal_string: LiteralString):
+    reveal_type(flatten(literal_string, (1, 2, 3)))  # revealed: list[str | int]
+
+reveal_type(flatten(b"abc"))  # revealed: list[int]
+reveal_type(flatten(b"abc", ("x",)))  # revealed: list[int | str]
+# TODO: we could have `Literal[97, 98, 99]` instead of `int` in the next two lines
+reveal_type(flatten_covariant(b"abc"))  # revealed: tuple[int, ...]
+reveal_type(flatten_covariant(b"abc", ("x",)))  # revealed: tuple[int | Literal["x"], ...]
+```

crates/ty_python_semantic/src/types/generics.rs

@@ -2254,6 +2254,19 @@ impl<'db> SpecializationBuilder<'db> {
                 }
             }
 
+            (
+                formal @ (Type::NominalInstance(_) | Type::ProtocolInstance(_)),
+                actual_literal @ (Type::StringLiteral(_)
+                | Type::LiteralString
+                | Type::BytesLiteral(_)),
+            ) => {
+                // Retry specialization with the literal's fallback instance (`str` / `bytes`)
+                // so literal iterables can contribute to generic inference.
+                if let Some(actual_instance) = actual_literal.literal_fallback_instance(self.db) {
+                    return self.infer_map_impl(formal, actual_instance, polarity, f, seen);
+                }
+            }
+
             (formal, Type::ProtocolInstance(actual_protocol)) => {
                 // TODO: This will only handle protocol classes that explicit inherit
                 // from other generic protocol classes by listing it as a base class.