Nested lookuptypes do not inference correctly

While trying to scope certain keys that would point to different types, I stumbled upon a problem when I needed to nest lookup types to lookup what type the key would correspond to. During decleration, this did not seem to be possible to get the compiler to understand. Applying the type does actually give out the correct type inferencing though. A simple example can be observed below.

TypeScript Version: 3.2.0-dev.201xxxxx
Tested with both 3.1.1 and typescript@next

Search Terms:
Lookuptypes, type inference, keyof

Code

interface Y {
  x: {
    x1: "x1";
    x2: "x2";
  }
}

interface Z {
  x1: number;
  x2: string;
  x3: number;
}

type H<K extends keyof Y, J extends keyof Y[K]> = (k: K, j: J) => Z[Y[K][J]]; // <----- Error Incorrectly?!
type T6 = H<"x", "x1">;
type T7 = H<"x", "x2">;
type T8 = H<"x", "x3">; // Errors Correctly!

// @ts-ignore
type L<K extends keyof Y, J extends keyof Y[K]> = (k: K, j: J) => Z[Y[K][J]];
type T3 = L<"x", "x1">;
type T4 = L<"x", "x2">;
type T5 = L<"x", "x3">; // Errors Correctly!

Expected behavior:
For the Z[Y[K][J]] in the example to not give error. Applying the type seems to work correctly.

Actual behavior:
Decleration of the type shows error when it should not.

Playground Link: https://www.typescriptlang.org/play/#src=interface%20Y%20%7B%0D%0A%20%20x%3A%20%7B%0D%0A%20%20%20%20x1%3A%20%22x1%22%3B%0D%0A%20%20%20%20x2%3A%20%22x2%22%3B%0D%0A%20%20%7D%0D%0A%7D%0D%0A%0D%0Ainterface%20Z%20%7B%0D%0A%20%20x1%3A%20number%3B%0D%0A%20%20x2%3A%20string%3B%0D%0A%20%20x3%3A%20number%3B%0D%0A%7D%0D%0A%0D%0A%0D%0Atype%20H%3CK%20extends%20keyof%20Y%2C%20J%20extends%20keyof%20Y%5BK%5D%3E%20%3D%20(k%3A%20K%2C%20j%3A%20J)%20%3D%3E%20Z%5BY%5BK%5D%5BJ%5D%5D%3B%0D%0A%0D%0Atype%20T6%20%3D%20H%3C%22x%22%2C%20%22x1%22%3E%3B%0D%0Atype%20T7%20%3D%20H%3C%22x%22%2C%20%22x2%22%3E%3B%0D%0Atype%20T8%20%3D%20H%3C%22x%22%2C%20%22x3%22%3E%3B%0D%0A%0D%0A%2F%2F%20%40ts-ignore%0D%0Atype%20L%3CK%20extends%20keyof%20Y%2C%20J%20extends%20keyof%20Y%5BK%5D%3E%20%3D%20(k%3A%20K%2C%20j%3A%20J)%20%3D%3E%20Z%5BY%5BK%5D%5BJ%5D%5D%3B%0D%0A%0D%0Atype%20T3%20%3D%20L%3C%22x%22%2C%20%22x1%22%3E%3B%0D%0Atype%20T4%20%3D%20L%3C%22x%22%2C%20%22x2%22%3E%3B%0D%0Atype%20T5%20%3D%20L%3C%22x%22%2C%20%22x3%22%3E%3B%0D%0A

Start with the linked TypeScript Playground example and reproduce the diagnostic on the nested indexed access in type H. Trace the compiler's handling of Z[Y[K][J]] for generic lookup types; done means the declaration is accepted while the invalid T8 case still reports an error.