Prevent substitution types from leaking out of non-deferred conditionals

src/compiler/checker.ts

@@ -17951,6 +17951,10 @@ export function createTypeChecker(host: TypeCheckerHost): TypeChecker {
             result.aliasTypeArguments = aliasSymbol ? aliasTypeArguments : instantiateTypes(root.aliasTypeArguments, mapper!); // TODO: GH#18217
             break;
         }
+        if (result.flags & TypeFlags.Substitution) {
+            const substitution = result as SubstitutionType;
+            result = getIntersectionType([substitution.baseType, substitution.constraint]);
+        }
         return extraTypes ? getUnionType(append(extraTypes, result)) : result;
         // We tail-recurse for generic conditional types that (a) have not already been evaluated and cached, and
         // (b) are non distributive, have a check type that is unaffected by instantiation, or have a non-union check

tests/baselines/reference/substitutionTypeUsedAsIndex.symbols

@@ -0,0 +1,23 @@
+//// [tests/cases/compiler/substitutionTypeUsedAsIndex.ts] ////
+
+=== substitutionTypeUsedAsIndex.ts ===
+// repro from https://github.com/microsoft/TypeScript/issues/54886
+
+interface Dict_54886 {
+>Dict_54886 : Symbol(Dict_54886, Decl(substitutionTypeUsedAsIndex.ts, 0, 0))
+
+  foo: 1;
+>foo : Symbol(Dict_54886.foo, Decl(substitutionTypeUsedAsIndex.ts, 2, 22))
+
+  bar: 1;
+>bar : Symbol(Dict_54886.bar, Decl(substitutionTypeUsedAsIndex.ts, 3, 9))
+}
+
+type FF_54886 = "foo" extends "foo" | "bar" ? "foo" : never;
+>FF_54886 : Symbol(FF_54886, Decl(substitutionTypeUsedAsIndex.ts, 5, 1))
+
+type C_54886 = Dict_54886[FF_54886]; // ok
+>C_54886 : Symbol(C_54886, Decl(substitutionTypeUsedAsIndex.ts, 7, 60))
+>Dict_54886 : Symbol(Dict_54886, Decl(substitutionTypeUsedAsIndex.ts, 0, 0))
+>FF_54886 : Symbol(FF_54886, Decl(substitutionTypeUsedAsIndex.ts, 5, 1))
+

tests/baselines/reference/substitutionTypeUsedAsIndex.types

@@ -0,0 +1,19 @@
+//// [tests/cases/compiler/substitutionTypeUsedAsIndex.ts] ////
+
+=== substitutionTypeUsedAsIndex.ts ===
+// repro from https://github.com/microsoft/TypeScript/issues/54886
+
+interface Dict_54886 {
+  foo: 1;
+>foo : 1
+
+  bar: 1;
+>bar : 1
+}
+
+type FF_54886 = "foo" extends "foo" | "bar" ? "foo" : never;
+>FF_54886 : "foo"
+
+type C_54886 = Dict_54886[FF_54886]; // ok
+>C_54886 : 1
+

tests/cases/compiler/substitutionTypeUsedAsIndex.ts

@@ -0,0 +1,12 @@
+// @strict: true
+// @noEmit: true
+
+// repro from https://github.com/microsoft/TypeScript/issues/54886
+
+interface Dict_54886 {
+  foo: 1;
+  bar: 1;
+}
+
+type FF_54886 = "foo" extends "foo" | "bar" ? "foo" : never;
+type C_54886 = Dict_54886[FF_54886]; // ok