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Type not assignable for string literal in signature #38201

Description

TypeScript Version: 3.8.3

Search Terms:
string literal
string alias
is not assignable to parameter of type

Expected behavior:
No type check errors

Actual behavior:

No overload matches this call.
  The last overload gave the following error.
    Argument of type 'tAlgorithm' is not assignable to parameter of type '"oct"'.
      Type '"EC"' is not assignable to type '"oct"'.

Related Issues:

Code

interface KeyStore {
    generate(kty: 'EC', crv?: string, parameters?: object, isprivate?: boolean): void;
    generate(kty: 'OKP', crv?: string, parameters?: object, isprivate?: boolean): void;
    generate(kty: 'RSA', bitlength?: number, parameters?: object, isprivate?: boolean): void;
    generate(kty: 'oct', bitlength?: number, parameters?: object): void;
}

type tAlgorithm = "RSA" | "EC" | "OKP" | "oct";

function generateKey(alg: tAlgorithm, crvOrSize: string | number) {
    return ({} as KeyStore).generate(alg, crvOrSize);
}
Output
"use strict";
function generateKey(alg) {
    return {}.generate(alg, "P-256");
}
Compiler Options
{
  "compilerOptions": {
    "noImplicitAny": true,
    "strictNullChecks": true,
    "strictFunctionTypes": true,
    "strictPropertyInitialization": true,
    "strictBindCallApply": true,
    "noImplicitThis": true,
    "noImplicitReturns": true,
    "useDefineForClassFields": false,
    "alwaysStrict": true,
    "allowUnreachableCode": false,
    "allowUnusedLabels": false,
    "downlevelIteration": false,
    "noEmitHelpers": false,
    "noLib": false,
    "noStrictGenericChecks": false,
    "noUnusedLocals": false,
    "noUnusedParameters": false,
    "esModuleInterop": true,
    "preserveConstEnums": false,
    "removeComments": false,
    "skipLibCheck": false,
    "checkJs": false,
    "allowJs": false,
    "declaration": true,
    "experimentalDecorators": false,
    "emitDecoratorMetadata": false,
    "target": "ES2017",
    "module": "ESNext"
  }
}

Playground Link: Provided

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    Working as IntendedThe behavior described is the intended behavior; this is not a bug

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