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Will probably merge in an hour or two

So #42588 undoes #41891, right? Just cross-linking them.

I hope you can bring it back at some point 🙏

Yeah, we had a lot of mixed feedback. I will say about half the team really wanted this and another half felt uneasy about it. We got feedback from existing projects that inferring template literal types by default was questionable at best.

Even though the original concern was about combinatoric explosions of string types, I think in the future we might be open to inferring literal strings when they can be constructed, but not necessarily template string types.

For example

function foo(x: "a" | "b")
  const str = `hello ${x}`; // "a" | "b"
}

but not

function foo(x: string)
  const str = `hello ${x}`; // `hello ${string}`
}