String union types in props inside generic types

TypeScript Version: 3.9.2 & 4.0.0-beta

Code

type A = {
    foo: number
}

type B<T extends string> = {
    [key in T]?: number
}

type C<T extends string> = A & B<T>

const f = <T extends string>(prop: T, value: number): C<T> => {
    const c: C<T> = {
        foo: 6
    }

    c[prop] = value

    return c
}

type Props = 'bar' | 'baz'

const o = f<Props>('bar', 6)

Expected behavior:
It should work :)

Actual behavior:
line 16: Type 'number' is not assignable to type 'C[T]'.

Playground Link: click

Start by running the provided Playground reproduction with the listed TypeScript versions and confirm the diagnostic on line 16. Trace the generic indexed assignment in the compiler, then add coverage so the example compiles without the reported error; no source file or test is named in the issue.