Wrong return type inference with the Union of Literal types

TypeScript Version: 2.2.0

Code

type T = 'a' | 'b'

const f1 = () => true ? 'a' : 'b'
const f2 = () => true ? 'a' : 'a'

const v1: T = f1()
const v2: T = f2()

Expected behavior:

Both will be ok.

Actual behavior:

Only the former is ok.

index.ts(7,7): error TS2322: Type 'string' is not assignable to type 'T'.

Minimal repro

const f = () => 'a' // inferred type f: () => string
const v: 'a' = f()  // Type 'string' is not assignable to type '"a"'

This is working as intended. See discussion here for the rationale.

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