Unexpected "Object is possibly undefined" error

[chrisprice]

TypeScript Version: 2.3.4

Code

const foo = (bar?: { baz: number }) => {
 if (bar == null) {
 bar = { baz: 0 };
 }
 const baz = () => {
 console.log(bar.baz); // Object is possibly undefined
 };
 baz();
};

Playground link

Expected behavior:
No error

Actual behavior:
Error "Object is possibly undefined"

[ikatyang]

Duplicate of #16889, see #9998 for more detail.

[mhegazy]

Automatically closing this issue for housekeeping purposes. The issue labels indicate that it is unactionable at the moment or has already been addressed.