Bug: Functional properties make inference non-working in case of circular type parameter constraints like T extends M<T>

[devanshj]

Bug Report

🔎 Search Terms

Circular type parameter constraint, inference change due to presence of functional property
Related: #40439

🕗 Version & Regression Information

Tested with v4.3.4

⏯ Playground Link

Playground

💻 Code

declare const m: <T extends M<T>>(m: T) => T

type M<Self, V = Prop<Self, "v">> =
  { v: V
  , t?: (v: V) => void
  }

type Prop<T, K> = K extends keyof T ? T[K] : "error"

// expected : M<{ v: number, t?: (v: number) => void }>
// actual   : M<unknown>
m({
  v: 1,
  t: k => {}
})

// expected : M<{ v: number }>
// actual   : M<{ v: number }>
m({
  v: 1
})

🙁 Actual behavior

In first function call of m, the parameter is inferred as M<unknown> in other words the TypeScript couldn't infer anything.

🙂 Expected behavior

In first function call of m, the parameter should be inferred as M<{ v: number, t?: (v: number) => void }>. Especially given that removal of t works as seen in the second function call. Presence of a functional property shouldn't make the inference completely non-working.

[devanshj]

Oh shoot I realized it's same as #40439 ahaha