`typeVersions` substitution occurs multiple times causing resolution to fail

TypeScript Version: 4.0.3, 4.1.0-dev.20201027

When module direcotry is imported which is mapped to typedefs through typeVersions typescript ends up doing path substitution multiple times and ends up with a wrong lookup path leading to failed resolution. I have created minimal reproducible example https://github.com/Gozala/bug-tsc-path-substitution/tree/double-substitution

Where you can see that src/index.ts imports bar/src module which seems to do the following:

1. typesVersion substitution is applied to 'src', which matched pattern '*'

   Trying substitution 'dist/*', candidate module location: 'dist/src'.

2. Which triggers following lookups:

• node_modules/bar/dist/src.ts
• node_modules/bar/dist/src.tsx
• node_modules/bar/dist/src.d.ts

3. After neither found instead of looking up at node_modules/bar/dist/src/index.(ts,tsx,d.ts) it seems to look at 'package.json' 'main' field and do second path substitution:

   'package.json' has 'main' field 'src/index.js' that references 'node_modules/bar/dist/src/src/index.js'.

4. Which fails because it ends up looking for dist/src/dist/src/index instead of dist/src/index.
5. This is especially problematic because typescript seems to generate import paths like bar/src in place of bar as illustrated by node_modules/foo/ where original import was for bar but typedefs emitted have bar/src instead (for no apparent reason)

Search Terms:

• module resolution
• typeVersions
• double substitution

Code

• main.ts
• bar/src/index

Expected behavior:

After considering following paths:

• node_modules/bar/dist/src.ts
• node_modules/bar/dist/src.tsx
• node_modules/bar/dist/src.d.ts

Following paths should be considered

• node_modules/bar/dist/src/index.ts
• node_modules/bar/dist/src/index.tsx
• node_modules/bar/dist/src/index.d.ts

Actual behavior:

Instead after considering following paths

After considering following paths:

• node_modules/bar/dist/src.ts
• node_modules/bar/dist/src.tsx
• node_modules/bar/dist/src.d.ts

TS seems to do another path substitute for dist/src/index.js ends up with wrong path node_modules/bar/dist/src/dist/src/index.js which cases failure in finding dist/src/index.d.ts

Playground Link:

Can't demonstrate with playground, as many files are involved. Please see demo repo instead
https://github.com/Gozala/bug-tsc-path-substitution/tree/double-substitution

Related Issues:

• https://github.com/microsoft/TypeScript/issues/41281
• As mentioned earlier generated typedefs seems to add /src to otherwise bar imports (which don't exhibit this problem). Which on it's own seems surprising making this a lot more problematic.