Regression in distributing on conditional types with `T extends T` after updating to 5.4

[SuperKXT]

🔎 Search Terms

"conditional", "distributive", "distribution"

🕗 Version & Regression Information

• This changed between versions 5.3 and 5.4

⏯ Playground Link

https://tsplay.dev/w1GDym

💻 Code

type obj = {
 foo: 1;
 bar: 2;
};

type keyContaining1<
 str extends string,
 keys extends keyof obj = keyof obj,
> = keys extends infer key extends keyof obj
 ? key extends `${string}${str}${string}`
 ? obj[key]
 : never
 : never;

type _1 = keyContaining1<"foo">;
// ^? type _1 = 4

type keyContaining2<
 str extends string,
 keys extends keyof obj = keyof obj,
> = keys extends keys
 ? keys extends `${string}${str}${string}`
 ? obj[keys]
 : never
 : never;

type _2 = keyContaining2<"foo">;
// ^? type _1 = never

🙁 Actual behavior

The value of the generic param collapses to never when an additional conditional is added after the distributive conditional.
The error happens only when distributing with T extends T.
T extends any, T extends unknown, T extends infer U works fine.

🙂 Expected behavior

That the distributive type works similarly to the previous versions.

Additional information about the issue

No response

[RyanCavanaugh]

Bisects to #56515

[ahejlsberg]

I see what the issue is. I'll put up a PR shortly.