Seemingly erroneous incompatible type "list[int]"; expected "Iterable[Never]"

Bug Report
mypy seems to not like an argument of type Union[T, Iterable[T]] where T = TypeVar("T"), instead considering it to be Iterable[Never].

To Reproduce

https://mypy-play.net/?mypy=latest&python=3.12&gist=1471ed0391c1e251edc0ecd85a28d684

from typing import List, Iterable, TypeVar, Union

T = TypeVar("T")

def coerce_list(x: Union[T, Iterable[T]]) -> List[T]:
    reveal_type(x)
    raise NotImplementedError()

def test() -> None:
    coerce_list(1)
    coerce_list([1, 2])

Expected Behavior
I expected no errors. I expected [1, 2] to match Iterable[T] with T = int.

Actual Behavior

example.py:6: note: Revealed type is "Union[T`-1, typing.Iterable[T`-1]]"
example.py:11: error: Argument 1 to "coerce_list" has incompatible type "list[int]"; expected "Iterable[Never]"  [arg-type]
Found 1 error in 1 file (checked 1 source file)

I'm confused why the revealed type of x looks to be correct (although I don't understand the -1 part), but the expected type of the parameter is Iterable[Never].

Your Environment

• Mypy version used: mypy 1.8.0 (compiled: yes)
• Mypy command-line flags: (none)
• Mypy configuration options from mypy.ini (and other config files): (none)
• Python version used: 3.11.2 (Debian 12)

Start by running the linked mypy-play reproduction, or the shown example.py, with mypy 1.8.0 and current mypy to compare behavior. Trace how generic arguments are inferred for Union[T, Iterable[T]], then verify that both coerce_list(1) and coerce_list([1, 2]) pass without errors.