Wrong Pick inference starting from version 3.6.0

[Siegrift]

TypeScript Version: >3.6.0

Search Terms: Pick, Exclude, Omit

Code

type Set1<T, K1 extends keyof T> = T extends any[] ? T : Pick<T, Exclude<keyof T, K1>> & {
  [SK1 in K1]-?: Required<Pick<T, SK1>>;
}[K1];

type Set2<T, K1 extends keyof T, K2 extends keyof T[K1]> = T extends any[] ? T : Pick<T, Exclude<keyof T, K1>> & {
  [SK1 in K1]-?: Required<{
      [key in K1]: Set1<T[K1], K2>;
  }>;
}[K1];

declare function set<T, K1 extends keyof T>(source: T, path: [K1], value: T[K1]): Set1<T, K1>;

declare function set<T, K1 extends keyof T, K2 extends keyof T[K1]>(source: T, path: [K1, K2], value: T[K1][K2]): Set2<T, K1, K2>;


interface State {
  a: {
    b: string;
    c: number;
  };
  d: boolean;
}

const state: State = {
  a: {
    b: "",
    c: 0,
  },
  d: false,
};

const newState: State = set(state, ["a", 'b'], 'why'); // error

Expected behavior:
Type of the return value of set function should be assignable to State

Actual behavior:

Type 'Pick<State, "d"> & { a: (Pick<{ b: string; c: number; }, never> & Pick<{ b: string; c: number; }, "b">) | (Pick<{ b: string; c: number; }, never> & Pick<{ b: string; c: number; }, "c">); }' is not assignable to type 'State'.
  Types of property 'a' are incompatible.
    Type '(Pick<{ b: string; c: number; }, never> & Pick<{ b: string; c: number; }, "b">) | (Pick<{ b: string; c: number; }, never> & Pick<{ b: string; c: number; }, "c">)' is not assignable to type '{ b: string; c: number; }'.
      Property 'c' is missing in type 'Pick<{ b: string; c: number; }, never> & Pick<{ b: string; c: number; }, "b">' but required in type '{ b: string; c: number; }'.

Playground Link:
http://www.typescriptlang.org/play/#code/C4TwDgpgBAyhwEYA8AVANFA0gqEAewEAdgCYDOUA1hCAPYBmUKAfFALxO4HHlQCGREAG0AulAD8nAFxQACgEsAxpVQYAonkUAbAK4kISanUbosCZqwBkUAN4BYAFBQoQmNijyiZkQFpxMgCUIAEcdeQAnCBIkBWVVWGwLAG5HAF8hbBEUh0dQSFh4ACZ493xCUgojBiYMTEKuct4qkwyEEVYOFAaeCgFhMUkumViVUw1tPQNmmrMLKGt7Jxc3HE9vP0CQsMjoxed9lyMPL0yZOERUVpFawuZs51S7tKvsx31tPkioeh0iRWB5LQvGR4CUcGUelQaNUWAAKMi0HThRQQGSmMB8YAACxkVwwADc+LpUUwrgBKM7wZCmRKvBzvLSfaA-P4AoFQEHAMHdCpQ4wzOo8prQlqZZjwxHIknozE4lzYG7XKCE4loq4ZQoiCkFYDFGkIG5PHLGzyEcL0Pgo2DATHQPb8GT25wAIxkZGA4U8AHN7vtFDIiDoALbOiDhX2pX0kGTO2i0LQQATZVKORyKIHujk2whnbPQDj2viOxwHV1QABE5bQJb9MgADNWlqlG85o98iSDG5HUw500RM0QIAB3GB53O29gc+DwvMYITlvhVqAAcmdy6Vy6HWJAy7JSSAA
(Playground doesn't support >3.6.0 at this time, so there it works)

My observatioins:

• If I remove the d property from state, the code works
• If I remove the T extends any[] ? T : in Set1 and Set2 declarations the code works
• For some reason, the code infers third generic argument of set (a.k.a K2 extends keyof T[K1]) as "b" | "c" which might be the issue here. However, I don't understand why it does it.
• Tried looking at releases for 3.6.0 but I didn't see anything directly related.

Related Issues:
I tried looking for them, but it's hard to know what to search for... The closest to my problem seemed #28884, but it's not directly related (I think).

[weswigham]

I have identified the issue, I think. I believe this regressed due to b75a90e - namely what happens is first, since we have no inferences, we contextually type K1 with the declared, uninstantiated signature. Then we have a type for K1, and when we're looking up the contextual type for the other array position, we go "ah, look, we have inferences now", and we try to instantiate the contextual type. This wouldn't be too bad, usually (since K2 wouldn't have an inference yet), except since we also try the returnMapper (which does exist), we end up instantiating K2 with unknown (since it has no inferences). unknown isn't assignable to the constraint, keyof T[K1], so we then take that instead, and instantiate that - out most recent inference for K1 at that time is "a" | "d" (which we made from the returnMapper during comparability checking with the first overload) - State["a" | "d"] is {b: string, c: number} | boolean, and keyof that is never (as boolean has no keys).