Fix union inference of generic class and its generic type

mypy/constraints.py

@@ -276,7 +276,11 @@ def infer_constraints_for_callable(
 
 
 def infer_constraints(
-    template: Type, actual: Type, direction: int, skip_neg_op: bool = False
+    template: Type,
+    actual: Type,
+    direction: int,
+    skip_neg_op: bool = False,
+    can_have_union_overlapping: bool = True,
 ) -> list[Constraint]:
     """Infer type constraints.
 
@@ -316,11 +320,15 @@ def infer_constraints(
         res = _infer_constraints(template, actual, direction, skip_neg_op)
         type_state.inferring.pop()
         return res
-    return _infer_constraints(template, actual, direction, skip_neg_op)
+    return _infer_constraints(template, actual, direction, skip_neg_op, can_have_union_overlapping)
 
 
 def _infer_constraints(
-    template: Type, actual: Type, direction: int, skip_neg_op: bool
+    template: Type,
+    actual: Type,
+    direction: int,
+    skip_neg_op: bool,
+    can_have_union_overlapping: bool = True,
 ) -> list[Constraint]:
     orig_template = template
     template = get_proper_type(template)
@@ -383,13 +391,46 @@ def _infer_constraints(
         return res
     if direction == SUPERTYPE_OF and isinstance(actual, UnionType):
         res = []
+
+        def _can_have_overlapping(_item: Type, _actual: UnionType) -> bool:
+            # There is a special overlapping case, where we have a Union of where two types
+            # are the same, but one of them contains the other.
+            # For example, we have Union[Sequence[T], Sequence[Sequence[T]]]
+            # In this case, only the second one can have overlapping because it contains the other.
+            # So, in case of list[list[int]], second one would be chosen.
+            if isinstance(p_item := get_proper_type(_item), Instance) and p_item.args:
+                other_items = [o_item for o_item in _actual.items if o_item is not a_item]
+
+                if len(other_items) == 1 and other_items[0] in p_item.args:
+                    return True
+
+                if len(other_items) > 1:
+                    union_args = [
+                        p_arg
+                        for arg in p_item.args
+                        if isinstance(p_arg := get_proper_type(arg), UnionType)
+                    ]
+
+                    for union_arg in union_args:
+                        if all(o_item in union_arg.items for o_item in other_items):
+                            return True
+
+            return False
+
         for a_item in actual.items:
             # `orig_template` has to be preserved intact in case it's recursive.
             # If we unwrapped ``type[...]`` previously, wrap the item back again,
             # as ``type[...]`` can't be removed from `orig_template`.
             if type_type_unwrapped:
                 a_item = TypeType.make_normalized(a_item)
-            res.extend(infer_constraints(orig_template, a_item, direction))
+            res.extend(
+                infer_constraints(
+                    orig_template,
+                    a_item,
+                    direction,
+                    can_have_union_overlapping=_can_have_overlapping(a_item, actual),
+                )
+            )
         return res
 
     # Now the potential subtype is known not to be a Union or a type
@@ -410,10 +451,30 @@ def _infer_constraints(
         # When the template is a union, we are okay with leaving some
         # type variables indeterminate. This helps with some special
         # cases, though this isn't very principled.
+
+        def _is_item_overlapping_actual_type(_item: Type) -> bool:
+            # Overlapping occurs when we have a Union where two types are
+            # compatible and the more generic one is chosen.
+            # For example, in Union[T, Sequence[T]], we have to choose
+            # Sequence[T] if actual type is list[int].
+            # This returns true if the item is an argument of other item
+            # that is subtype of the actual type
+            return any(
+                isinstance(p_item_to_compare := get_proper_type(item_to_compare), Instance)
+                and mypy.subtypes.is_subtype(actual, erase_typevars(p_item_to_compare))
+                and _item in p_item_to_compare.args
+                for item_to_compare in template.items
+                if _item is not item_to_compare
+            )
+
         result = any_constraints(
             [
                 infer_constraints_if_possible(t_item, actual, direction)
-                for t_item in template.items
+                for t_item in [
+                    item
+                    for item in template.items
+                    if not (can_have_union_overlapping and _is_item_overlapping_actual_type(item))
+                ]
             ],
             eager=False,
         )

test-data/unit/check-inference.test

@@ -873,13 +873,7 @@ def g(x: Union[T, List[T]]) -> List[T]: pass
 def h(x: List[str]) -> None: pass
 g('a')() # E: "List[str]" not callable
 
-# The next line is a case where there are multiple ways to satisfy a constraint
-# involving a Union. Either T = List[str] or T = str would turn out to be valid,
-# but mypy doesn't know how to branch on these two options (and potentially have
-# to backtrack later) and defaults to T = Never. The result is an
-# awkward error message. Either a better error message, or simply accepting the
-# call, would be preferable here.
-g(['a']) # E: Argument 1 to "g" has incompatible type "List[str]"; expected "List[Never]"
+g(['a'])
 
 h(g(['a']))
 
@@ -891,6 +885,53 @@ i(b, a, b)
 i(a, b, b) # E: Argument 1 to "i" has incompatible type "List[int]"; expected "List[str]"
 [builtins fixtures/list.pyi]
 
+[case testInferenceOfUnionOfGenericClassAndItsGenericType]
+from typing import Generic, TypeVar, Union
+
+T = TypeVar('T')
+
+class GenericClass(Generic[T]):
+    def __init__(self, value: T) -> None:
+        self.value = value
+
+def method_with_union(arg: Union[GenericClass[T], T]) -> GenericClass[T]:
+    if not isinstance(arg, GenericClass):
+        arg = GenericClass(arg)
+    return arg
+
+result_1 = method_with_union(GenericClass("test"))
+reveal_type(result_1) # N: Revealed type is "__main__.GenericClass[builtins.str]"
+
+result_2 = method_with_union("test")
+reveal_type(result_2) # N: Revealed type is "__main__.GenericClass[builtins.str]"
+
+[builtins fixtures/isinstance.pyi]
+
+[case testInferenceOfUnionOfSequenceOfAnyAndSequenceOfSequence]
+from typing import Sequence, Iterable, TypeVar, Union
+
+T = TypeVar("T")
+S = TypeVar("S")
+
+def sub_method(value: Union[S, Iterable[S]]) -> Iterable[S]:
+    pass
+
+def method(value: Union[Sequence[T], Sequence[Sequence[T]]]) -> None:
+    reveal_type(sub_method(value)) # N: Revealed type is "typing.Iterable[typing.Sequence[T`-1]]"
+
+[case testInferenceOfUnionOfUnionWithSequenceAndSequenceOfThatUnion]
+from typing import Sequence, Iterable, TypeVar, Union
+
+T = Union[str, Sequence[int]]
+S = TypeVar("S", bound=T)
+
+def sub_method(value: Union[S, Iterable[S]]) -> Iterable[S]:
+    pass
+
+def method(value: Union[T, Sequence[T]]) -> None:
+    reveal_type(sub_method(value)) # N: Revealed type is "typing.Iterable[Union[builtins.str, typing.Sequence[builtins.int]]]"
+
+
 [case testCallableListJoinInference]
 from typing import Any, Callable