Narrowing via property check fails when adding parent type to declaration

TypeScript Version: 3.8.3

Search Terms:

• property check refinement

Expected behavior: No error, type is narrowed to SubA.

Actual behavior: Type is narrowed to never and produces an error.

Related Issues:

• https://github.com/microsoft/TypeScript/issues/1260

Code

This code type checks:

interface Base {
  base: number;
}

interface SubA extends Base {
  a: string;
  other: boolean;
}
interface SubB extends Base {
  b: string;
}

function foo(x: SubA | SubB | null) {
  x = x || {base: 1, b: 'b'};
  if (x && 'a' in x && x.a == 'str') {
    x.other;  // ok
  }
}

A very tiny tweak (adding Base | to the parameter type) breaks things, though:

function foo(x: Base | SubA | SubB | null) {
  x = x || {base: 1, b: 'b'};
  if (x && 'a' in x && x.a == 'str') {  // <-- Property 'a' does not exist on type 'never'. (2339)
    x.other;  // <-- Property 'other' does not exist on type 'never'. (2339)
  }
}

This makes some sense since foo could be called with something assignable to Base that has an a but is not specifically a SubA. But what doesn't make sense to me is that removing the assignment on the first line makes the error go away:

function foo(x: Base | SubA | SubB | null) {
  if (x && 'a' in x && x.a == 'str') {  // ok
    x.other;  // ok
  }
}

That assignment seeming has no bearing on if statement (the default value doesn't have an a property). So why does it affect the inferred type in it?

Either the second and third example should both error or neither of them should.

"use strict";
function foo(x) {
    x = x || {base: 1, b: 'b'};
    if (x && 'a' in x && x.a == 'str') {
        x.other;
    }
}

{
  "compilerOptions": {
    "noImplicitAny": true,
    "strictNullChecks": true,
    "strictFunctionTypes": true,
    "strictPropertyInitialization": true,
    "strictBindCallApply": true,
    "noImplicitThis": true,
    "noImplicitReturns": true,
    "alwaysStrict": true,
    "esModuleInterop": true,
    "declaration": true,
    "experimentalDecorators": true,
    "emitDecoratorMetadata": true,
    "moduleResolution": 2,
    "target": "ES2017",
    "jsx": "React",
    "module": "ESNext"
  }
}

Playground Link: Provided

Start with the provided TypeScript Playground reproduction and compare the three foo examples, focusing on how the assignment changes property-check narrowing. The issue is done when the behavior is made consistent across those examples and the reported never errors are resolved or intentionally documented.