Callable with Iterator[T] return type and default function with compatible return type, errors

Bug Report

I am trying to add some type hints to a module that takes a filename and reads it with a caller supplied reader (most common csv.reader and csv.DictReader). I noticed when I do not supply a default, mypy is fine, however, when I do, it complains about incompatibility.

To Reproduce

import csv
from typing import Callable, Iterable, Iterator, Text, TypeVar

T = TypeVar('T')

def foo(x: str, reader: Callable[[Iterable[Text]], Iterator[T]]) -> Iterator[T]:
    return reader(x)


# Is fine, resolves to Iterator[List[str]]
x = foo('bar.txt', csv.reader)


# Complains that _reader is not compatible with Iterator[T]
def baz(x: str, reader: Callable[[Iterable[Text]], Iterator[T]] = csv.reader) -> Iterator[T]:
    return reader(x)

When I look at the _reader definition I see

class _reader(Iterator[List[str]]):
    dialect: Dialect
    line_num: int
    if sys.version_info >= (3, 0):
        def __next__(self) -> List[str]: ...
    else:
        def next(self) -> List[str]: ...

So it is a subclass of Iterator[List[str]] which should be compatible with Iterator[T]

Expected Behavior

No mypy error is shown

Actual Behavior

mypy complains about using csv.reader as the default value of the reader argument due to it not matching _reader.

Your Environment

• Mypy version used: 0.812
• Mypy command-line flags:
• Mypy configuration options from mypy.ini (and other config files):

[mypy]
# Most copied from https://github.com/python/mypy/blob/675ae1afc8a5b0a9a515292c7e9d6bc2a38887be/mypy_self_check.ini
disallow_untyped_calls = True
disallow_untyped_defs = True
disallow_incomplete_defs = True
check_untyped_defs = True
disallow_subclassing_any = True
warn_no_return = True
strict_optional = True
strict_equality = True
no_implicit_optional = True
disallow_any_generics = True
disallow_any_unimported = True
warn_redundant_casts = True
warn_unused_ignores = True
warn_unused_configs = True
show_traceback = True
show_error_codes = True

# Should be removed if we use typehints everywhere
follow_imports = silent
python_version = 3.9

[mypy-memory_profiler.*]
ignore_missing_imports = True

• Python version used: 3.9.1
• Operating system and version: Ubuntu 20.10

Start by running the supplied Python snippet with mypy 0.812 and compare the generic reader parameter in foo with the default in baz. Trace how mypy checks a default callable against a generic return type. Done means baz accepts csv.reader without an incompatibility error while preserving the existing behavior for foo.