diff --git a/crates/ty_python_semantic/resources/mdtest/boundness_declaredness/public.md b/crates/ty_python_semantic/resources/mdtest/boundness_declaredness/public.md
index 5dc20fa1d48bae..fd596758babcdb 100644
--- a/crates/ty_python_semantic/resources/mdtest/boundness_declaredness/public.md
+++ b/crates/ty_python_semantic/resources/mdtest/boundness_declaredness/public.md
@@ -237,11 +237,11 @@ b: SomeUnknownName = 1  # error: [unresolved-reference]
 ```py
 from mod import a, b
 
-reveal_type(a)  # revealed: Unknown | Literal[1]
+reveal_type(a)  # revealed: int
 reveal_type(b)  # revealed: Unknown
 
 # All external modifications of `a` are allowed:
-a = None
+a = None  # error: [invalid-assignment]
 ```
 
 ### Undeclared and possibly unbound
@@ -265,11 +265,11 @@ if flag:
 # on top of this document.
 from mod import a, b
 
-reveal_type(a)  # revealed: Unknown | Literal[1]
+reveal_type(a)  # revealed: int
 reveal_type(b)  # revealed: Unknown
 
 # All external modifications of `a` are allowed:
-a = None
+a = None  # error: [invalid-assignment]
 ```
 
 ### Undeclared and unbound
diff --git a/crates/ty_python_semantic/resources/mdtest/del.md b/crates/ty_python_semantic/resources/mdtest/del.md
index e0d8a495c2afaa..ece1b79d7cbdde 100644
--- a/crates/ty_python_semantic/resources/mdtest/del.md
+++ b/crates/ty_python_semantic/resources/mdtest/del.md
@@ -108,7 +108,7 @@ def foo():
     global x
     def bar():
         # allowed, refers to `x` in the global scope
-        reveal_type(x)  # revealed: Unknown | Literal[1]
+        reveal_type(x)  # revealed: int
     bar()
     del x  # allowed, deletes `x` in the global scope (though we don't track that)
 ```
diff --git a/crates/ty_python_semantic/resources/mdtest/import/conditional.md b/crates/ty_python_semantic/resources/mdtest/import/conditional.md
index d2896ae2cd27af..679a96ba2ea2a0 100644
--- a/crates/ty_python_semantic/resources/mdtest/import/conditional.md
+++ b/crates/ty_python_semantic/resources/mdtest/import/conditional.md
@@ -25,8 +25,8 @@ reveal_type(y)
 # error: [possibly-missing-import] "Member `y` of module `maybe_unbound` may be missing"
 from maybe_unbound import x, y
 
-reveal_type(x)  # revealed: Unknown | Literal[3]
-reveal_type(y)  # revealed: Unknown | Literal[3]
+reveal_type(x)  # revealed: int
+reveal_type(y)  # revealed: int
 ```
 
 ## Maybe unbound annotated
@@ -56,7 +56,7 @@ Importing an annotated name prefers the declared type over the inferred type:
 # error: [possibly-missing-import] "Member `y` of module `maybe_unbound_annotated` may be missing"
 from maybe_unbound_annotated import x, y
 
-reveal_type(x)  # revealed: Unknown | Literal[3]
+reveal_type(x)  # revealed: int
 reveal_type(y)  # revealed: int
 ```
 
diff --git a/crates/ty_python_semantic/resources/mdtest/import/dunder_all.md b/crates/ty_python_semantic/resources/mdtest/import/dunder_all.md
index 1fcdefb2ddbf37..d80301f8517a26 100644
--- a/crates/ty_python_semantic/resources/mdtest/import/dunder_all.md
+++ b/crates/ty_python_semantic/resources/mdtest/import/dunder_all.md
@@ -784,7 +784,7 @@ class A: ...
 from subexporter import *
 
 # TODO: Should we avoid including `Unknown` for this case?
-reveal_type(__all__)  # revealed: Unknown | list[Unknown | str]
+reveal_type(__all__)  # revealed: list[Unknown | str]
 
 __all__.append("B")
 
diff --git a/crates/ty_python_semantic/resources/mdtest/import/module_getattr.md b/crates/ty_python_semantic/resources/mdtest/import/module_getattr.md
index 8e947ab655b8da..7d1665ef9653cf 100644
--- a/crates/ty_python_semantic/resources/mdtest/import/module_getattr.md
+++ b/crates/ty_python_semantic/resources/mdtest/import/module_getattr.md
@@ -40,10 +40,10 @@ def __getattr__(name: str) -> int:
 import mixed_module
 
 # Explicit attribute should take precedence
-reveal_type(mixed_module.explicit_attr)  # revealed: Unknown | Literal["explicit"]
+reveal_type(mixed_module.explicit_attr)  # revealed: str
 
 # `__getattr__` should handle unknown attributes
-reveal_type(mixed_module.dynamic_attr)  # revealed: str
+reveal_type(mixed_module.dynamic_attr)  # revealed: int
 ```
 
 `mixed_module.py`:
@@ -51,8 +51,8 @@ reveal_type(mixed_module.dynamic_attr)  # revealed: str
 ```py
 explicit_attr = "explicit"
 
-def __getattr__(name: str) -> str:
-    return "dynamic"
+def __getattr__(name: str) -> int:
+    return 1
 ```
 
 ## Precedence: submodules vs `__getattr__`
diff --git a/crates/ty_python_semantic/resources/mdtest/import/namespace.md b/crates/ty_python_semantic/resources/mdtest/import/namespace.md
index 3b5f63e9818b35..af7d1ab036a9d8 100644
--- a/crates/ty_python_semantic/resources/mdtest/import/namespace.md
+++ b/crates/ty_python_semantic/resources/mdtest/import/namespace.md
@@ -91,19 +91,23 @@ If there's a namespace package with the same name as a module, the module takes
 `foo.py`:
 
 ```py
-x = "module"
+class FromModule: ...
+
+x = FromModule
 ```
 
 `foo/bar.py`:
 
 ```py
-x = "namespace"
+class FromNamespace: ...
+
+x = FromNamespace
 ```
 
 ```py
 from foo import x
 
-reveal_type(x)  # revealed: Unknown | Literal["module"]
+reveal_type(x)  # revealed: <class 'FromModule'>
 
 import foo.bar  # error: [unresolved-import]
 ```
diff --git a/crates/ty_python_semantic/resources/mdtest/import/star.md b/crates/ty_python_semantic/resources/mdtest/import/star.md
index c66012b10396cb..ae7dc6bb9858b6 100644
--- a/crates/ty_python_semantic/resources/mdtest/import/star.md
+++ b/crates/ty_python_semantic/resources/mdtest/import/star.md
@@ -144,8 +144,8 @@ X = (Y := 3) + 4
 ```py
 from exporter import *
 
-reveal_type(X)  # revealed: Unknown | Literal[7]
-reveal_type(Y)  # revealed: Unknown | Literal[3]
+reveal_type(X)  # revealed: int
+reveal_type(Y)  # revealed: int
 ```
 
 ### Global-scope symbols defined in many other ways
@@ -781,9 +781,9 @@ else:
 from exporter import *
 
 # error: [possibly-unresolved-reference]
-reveal_type(A)  # revealed: Unknown | Literal[1]
+reveal_type(A)  # revealed: int
 
-reveal_type(B)  # revealed: Unknown | Literal[2, 3]
+reveal_type(B)  # revealed: int
 ```
 
 ### Reachability constraints in the importing module
@@ -804,7 +804,7 @@ if coinflip():
     from exporter import *
 
 # error: [possibly-unresolved-reference]
-reveal_type(A)  # revealed: Unknown | Literal[1]
+reveal_type(A)  # revealed: int
 ```
 
 ### Reachability constraints in the exporting module *and* the importing module
diff --git a/crates/ty_python_semantic/resources/mdtest/known_constants.md b/crates/ty_python_semantic/resources/mdtest/known_constants.md
index db53b807dcac93..91b8b579a9ce12 100644
--- a/crates/ty_python_semantic/resources/mdtest/known_constants.md
+++ b/crates/ty_python_semantic/resources/mdtest/known_constants.md
@@ -95,7 +95,7 @@ TYPE_CHECKING: bool = ...
 ```py
 from constants import TYPE_CHECKING
 
-reveal_type(TYPE_CHECKING)  # revealed: Literal[True]
+reveal_type(TYPE_CHECKING)  # revealed: bool
 
 from stub import TYPE_CHECKING
 
diff --git a/crates/ty_python_semantic/resources/mdtest/narrow/assignment.md b/crates/ty_python_semantic/resources/mdtest/narrow/assignment.md
index 8f329502525389..f692c59835a1c4 100644
--- a/crates/ty_python_semantic/resources/mdtest/narrow/assignment.md
+++ b/crates/ty_python_semantic/resources/mdtest/narrow/assignment.md
@@ -34,7 +34,7 @@ class _:
 [reveal_type(a.z) for _ in range(1)]  # revealed: Literal[0]
 
 def _():
-    reveal_type(a.x)  # revealed: Unknown | int | None
+    reveal_type(a.x)  # revealed: int | None
     reveal_type(a.y)  # revealed: Unknown | None
     reveal_type(a.z)  # revealed: Unknown | None
 
@@ -75,7 +75,7 @@ class _:
 
     if cond():
         a = A()
-    reveal_type(a.x)  # revealed: int | None | Unknown
+    reveal_type(a.x)  # revealed: int | None
     reveal_type(a.y)  # revealed: Unknown | None
     reveal_type(a.z)  # revealed: Unknown | None
 
@@ -295,10 +295,10 @@ class C:
 
 def _():
     # error: [possibly-missing-attribute]
-    reveal_type(b.a.x[0])  # revealed: Unknown | int | None
+    reveal_type(b.a.x[0])  # revealed: int | None
     # error: [possibly-missing-attribute]
-    reveal_type(b.a.x)  # revealed: Unknown | list[int | None]
-    reveal_type(b.a)  # revealed: Unknown | A | None
+    reveal_type(b.a.x)  # revealed: list[int | None]
+    reveal_type(b.a)  # revealed: A | None
 ```
 
 ## Invalid assignments are not used for narrowing
diff --git a/crates/ty_python_semantic/resources/mdtest/narrow/complex_target.md b/crates/ty_python_semantic/resources/mdtest/narrow/complex_target.md
index 5a61c9e8d299f0..479238d617cea2 100644
--- a/crates/ty_python_semantic/resources/mdtest/narrow/complex_target.md
+++ b/crates/ty_python_semantic/resources/mdtest/narrow/complex_target.md
@@ -167,11 +167,11 @@ if c.x is not None:
 
 if c.x is not None:
     def _():
-        reveal_type(c.x)  # revealed: Unknown | int | None
+        reveal_type(c.x)  # revealed: int | None
 
 def _():
     if c.x is not None:
-        reveal_type(c.x)  # revealed: (Unknown & ~None) | int
+        reveal_type(c.x)  # revealed: int
 ```
 
 ## Subscript narrowing
diff --git a/crates/ty_python_semantic/resources/mdtest/narrow/conditionals/nested.md b/crates/ty_python_semantic/resources/mdtest/narrow/conditionals/nested.md
index dd10ff95859e01..f27b3deb08170d 100644
--- a/crates/ty_python_semantic/resources/mdtest/narrow/conditionals/nested.md
+++ b/crates/ty_python_semantic/resources/mdtest/narrow/conditionals/nested.md
@@ -86,7 +86,7 @@ class B:
     reveal_type(a.x)  # revealed: Literal["a"]
 
 def f():
-    reveal_type(a.x)  # revealed: Unknown | str | None
+    reveal_type(a.x)  # revealed: str | None
 
 [reveal_type(a.x) for _ in range(1)]  # revealed: Literal["a"]
 
@@ -96,7 +96,7 @@ class C:
     reveal_type(a.x)  # revealed: str | None
 
 def g():
-    reveal_type(a.x)  # revealed: Unknown | str | None
+    reveal_type(a.x)  # revealed: str | None
 
 [reveal_type(a.x) for _ in range(1)]  # revealed: str | None
 
@@ -109,7 +109,7 @@ class D:
     reveal_type(a.x)  # revealed: Literal["a"]
 
 def h():
-    reveal_type(a.x)  # revealed: Unknown | str | None
+    reveal_type(a.x)  # revealed: str | None
 
 # TODO: should be `str | None`
 [reveal_type(a.x) for _ in range(1)]  # revealed: Literal["a"]
@@ -190,7 +190,7 @@ def f(x: str | None):
             reveal_type(g)  # revealed: str
 
         if a.x is not None:
-            reveal_type(a.x)  # revealed: (Unknown & ~None) | str
+            reveal_type(a.x)  # revealed: str
 
         if l[0] is not None:
             reveal_type(l[0])  # revealed: str
@@ -206,7 +206,7 @@ def f(x: str | None):
             reveal_type(g)  # revealed: str
 
         if a.x is not None:
-            reveal_type(a.x)  # revealed: (Unknown & ~None) | str
+            reveal_type(a.x)  # revealed: str
 
         if l[0] is not None:
             reveal_type(l[0])  # revealed: str
@@ -382,12 +382,12 @@ def f():
     if a.x is not None:
         def _():
             # Lazy nested scope narrowing is not performed on attributes/subscripts because it's difficult to track their changes.
-            reveal_type(a.x)  # revealed: Unknown | str | None
+            reveal_type(a.x)  # revealed: str | None
 
         class D:
-            reveal_type(a.x)  # revealed: (Unknown & ~None) | str
+            reveal_type(a.x)  # revealed: str
 
-        [reveal_type(a.x) for _ in range(1)]  # revealed: (Unknown & ~None) | str
+        [reveal_type(a.x) for _ in range(1)]  # revealed: str
 
     if l[0] is not None:
         def _():
@@ -473,11 +473,11 @@ def f():
         if a.x is not None:
             def _():
                 if a.x != 1:
-                    reveal_type(a.x)  # revealed: (Unknown & ~Literal[1]) | str | None
+                    reveal_type(a.x)  # revealed: str | None
 
             class D:
                 if a.x != 1:
-                    reveal_type(a.x)  # revealed: (Unknown & ~Literal[1] & ~None) | str
+                    reveal_type(a.x)  # revealed: str
 
         if l[0] is not None:
             def _():
diff --git a/crates/ty_python_semantic/resources/mdtest/public_types.md b/crates/ty_python_semantic/resources/mdtest/public_types.md
index 4a6ef1c6fb7e57..1f4d0a5ccac190 100644
--- a/crates/ty_python_semantic/resources/mdtest/public_types.md
+++ b/crates/ty_python_semantic/resources/mdtest/public_types.md
@@ -263,7 +263,7 @@ if flag():
     x = 1
 
     def f() -> None:
-        reveal_type(x)  # revealed: Unknown | Literal[1, 2]
+        reveal_type(x)  # revealed: int
     # Function only used inside this branch
     f()
 
diff --git a/crates/ty_python_semantic/resources/mdtest/scopes/builtin.md b/crates/ty_python_semantic/resources/mdtest/scopes/builtin.md
index ae684a22d92cd5..b1dd1fbef63ec6 100644
--- a/crates/ty_python_semantic/resources/mdtest/scopes/builtin.md
+++ b/crates/ty_python_semantic/resources/mdtest/scopes/builtin.md
@@ -29,8 +29,8 @@ if flag():
     chr: int = 1
 
 def _():
-    # TODO: Should ideally be `Unknown | Literal[1] | (def abs(x: SupportsAbs[_T], /) -> _T)`
-    reveal_type(abs)  # revealed: Unknown | Literal[1]
+    # TODO: Should ideally be `Literal[1] | (def abs(x: SupportsAbs[_T], /) -> _T)`
+    reveal_type(abs)  # revealed: int
     # TODO: Should ideally be `int | (def chr(i: SupportsIndex, /) -> str)`
     reveal_type(chr)  # revealed: int
 ```
diff --git a/crates/ty_python_semantic/resources/mdtest/scopes/eager.md b/crates/ty_python_semantic/resources/mdtest/scopes/eager.md
index 286f2eb26163d4..d8fdd5e0c9ff09 100644
--- a/crates/ty_python_semantic/resources/mdtest/scopes/eager.md
+++ b/crates/ty_python_semantic/resources/mdtest/scopes/eager.md
@@ -12,7 +12,7 @@ Function definitions are evaluated lazily.
 x = 1
 
 def f():
-    reveal_type(x)  # revealed: Unknown | Literal[1, 2]
+    reveal_type(x)  # revealed: int
 
 x = 2
 ```
@@ -283,7 +283,7 @@ x = 1
 
 def _():
     class C:
-        # revealed: Unknown | Literal[1]
+        # revealed: int
         [reveal_type(x) for _ in [1]]
         x = 2
 ```
@@ -389,7 +389,7 @@ x = int
 class C:
     var: ClassVar[x]
 
-reveal_type(C.var)  # revealed: Unknown | int | str
+reveal_type(C.var)  # revealed: int | str
 
 x = str
 ```
diff --git a/crates/ty_python_semantic/resources/mdtest/scopes/global.md b/crates/ty_python_semantic/resources/mdtest/scopes/global.md
index e7156e85de51d8..21479dc5f2f70c 100644
--- a/crates/ty_python_semantic/resources/mdtest/scopes/global.md
+++ b/crates/ty_python_semantic/resources/mdtest/scopes/global.md
@@ -8,7 +8,7 @@ A name reference to a never-defined symbol in a function is implicitly a global
 x = 1
 
 def f():
-    reveal_type(x)  # revealed: Unknown | Literal[1]
+    reveal_type(x)  # revealed: int
 ```
 
 ## Explicit global in function
@@ -18,7 +18,7 @@ x = 1
 
 def f():
     global x
-    reveal_type(x)  # revealed: Unknown | Literal[1]
+    reveal_type(x)  # revealed: int
 ```
 
 ## Unassignable type in function
@@ -201,7 +201,7 @@ x = 42
 
 def f():
     global x
-    reveal_type(x)  # revealed: Unknown | Literal[42]
+    reveal_type(x)  # revealed: int
     x = "56"
     reveal_type(x)  # revealed: Literal["56"]
 ```
diff --git a/crates/ty_python_semantic/resources/mdtest/scopes/moduletype_attrs.md b/crates/ty_python_semantic/resources/mdtest/scopes/moduletype_attrs.md
index 7c6c3e6d9ea32f..16240e81d966a2 100644
--- a/crates/ty_python_semantic/resources/mdtest/scopes/moduletype_attrs.md
+++ b/crates/ty_python_semantic/resources/mdtest/scopes/moduletype_attrs.md
@@ -73,10 +73,10 @@ __spec__ = 42  # error: [invalid-assignment] "Object of type `Literal[42]` is no
 ```py
 import module
 
-reveal_type(module.__file__)  # revealed: Unknown | None
+reveal_type(module.__file__)  # revealed: None
 reveal_type(module.__path__)  # revealed: list[str]
 reveal_type(module.__doc__)  # revealed: Unknown
-reveal_type(module.__spec__)  # revealed: Unknown | ModuleSpec | None
+reveal_type(module.__spec__)  # revealed: ModuleSpec | None
 # error: [unresolved-attribute]
 reveal_type(module.__warningregistry__)  # revealed: Unknown
 
diff --git a/crates/ty_python_semantic/resources/mdtest/scopes/unbound.md b/crates/ty_python_semantic/resources/mdtest/scopes/unbound.md
index 43c8f5f5644e42..71b483cf87188e 100644
--- a/crates/ty_python_semantic/resources/mdtest/scopes/unbound.md
+++ b/crates/ty_python_semantic/resources/mdtest/scopes/unbound.md
@@ -17,7 +17,7 @@ class C:
         x = 2
 
 # error: [possibly-missing-attribute] "Attribute `x` on type `<class 'C'>` may be missing"
-reveal_type(C.x)  # revealed: Unknown | Literal[2]
+reveal_type(C.x)  # revealed: Unknown | int
 reveal_type(C.y)  # revealed: Unknown | Literal[1]
 ```
 
@@ -37,7 +37,7 @@ class C:
     # Possibly unbound variables in enclosing scopes are considered bound.
     y = x
 
-reveal_type(C.y)  # revealed: Unknown | Literal[1, "abc"]
+reveal_type(C.y)  # revealed: Unknown | Literal[1] | str
 ```
 
 ## Possibly unbound in class scope with multiple declarations
diff --git a/crates/ty_python_semantic/resources/primer/bad.txt b/crates/ty_python_semantic/resources/primer/bad.txt
index bfff92bd22c8aa..59fa3b5d6ede2a 100644
--- a/crates/ty_python_semantic/resources/primer/bad.txt
+++ b/crates/ty_python_semantic/resources/primer/bad.txt
@@ -1,2 +1 @@
 spark  # too many iterations (in `exported_names` query)
-steam.py  # hangs (single threaded)
diff --git a/crates/ty_python_semantic/src/place.rs b/crates/ty_python_semantic/src/place.rs
index 993075cd5da488..33a50d28b911e0 100644
--- a/crates/ty_python_semantic/src/place.rs
+++ b/crates/ty_python_semantic/src/place.rs
@@ -822,7 +822,11 @@ fn place_by_id<'db>(
                 )
             });
 
-            if scope.file(db).is_stub(db) || scope.scope(db).visibility().is_private() {
+            if scope.node(db).scope_kind().is_module() {
+                inferred
+                    .map_type(|ty| ty.promote_literals(db, false))
+                    .into()
+            } else if scope.file(db).is_stub(db) || scope.scope(db).visibility().is_private() {
                 // We generally trust module-level undeclared places in stubs and do not union
                 // with `Unknown`. If we don't do this, simple aliases like `IOError = OSError` in
                 // stubs would result in `IOError` being a union of `OSError` and `Unknown`, which
diff --git a/crates/ty_python_semantic/src/types.rs b/crates/ty_python_semantic/src/types.rs
index a9111f35819dab..5a25adc46c5fd2 100644
--- a/crates/ty_python_semantic/src/types.rs
+++ b/crates/ty_python_semantic/src/types.rs
@@ -1171,20 +1171,37 @@ impl<'db> Type<'db> {
     /// Note that this function tries to promote literals to a more user-friendly form than their
     /// fallback instance type. For example, `def _() -> int` is promoted to `Callable[[], int]`,
     /// as opposed to `FunctionType`.
-    pub(crate) fn promote_literals(self, db: &'db dyn Db) -> Type<'db> {
-        self.apply_type_mapping(db, &TypeMapping::PromoteLiterals)
+    pub(crate) fn promote_literals(
+        self,
+        db: &'db dyn Db,
+        promote_modules_and_functions: bool,
+    ) -> Type<'db> {
+        self.apply_type_mapping(
+            db,
+            &TypeMapping::PromoteLiterals {
+                promote_modules_and_functions,
+            },
+        )
     }
 
     /// Like [`Type::promote_literals`], but does not recurse into nested types.
-    fn promote_literals_impl(self, db: &'db dyn Db) -> Type<'db> {
+    fn promote_literals_impl(
+        self,
+        db: &'db dyn Db,
+        promote_modules_and_functions: bool,
+    ) -> Type<'db> {
         match self {
             Type::StringLiteral(_) | Type::LiteralString => KnownClass::Str.to_instance(db),
             Type::BooleanLiteral(_) => KnownClass::Bool.to_instance(db),
             Type::IntLiteral(_) => KnownClass::Int.to_instance(db),
             Type::BytesLiteral(_) => KnownClass::Bytes.to_instance(db),
-            Type::ModuleLiteral(_) => KnownClass::ModuleType.to_instance(db),
             Type::EnumLiteral(literal) => literal.enum_class_instance(db),
-            Type::FunctionLiteral(literal) => Type::Callable(literal.into_callable_type(db)),
+            Type::ModuleLiteral(_) if promote_modules_and_functions => {
+                KnownClass::ModuleType.to_instance(db)
+            }
+            Type::FunctionLiteral(literal) if promote_modules_and_functions => {
+                Type::Callable(literal.into_callable_type(db))
+            }
             _ => self,
         }
     }
@@ -6037,7 +6054,7 @@ impl<'db> Type<'db> {
                         self
                     }
                 }
-                TypeMapping::PromoteLiterals
+                TypeMapping::PromoteLiterals { .. }
                     | TypeMapping::BindLegacyTypevars(_)
                     | TypeMapping::MarkTypeVarsInferable(_) => self,
                 TypeMapping::Materialize(materialization_kind)  => {
@@ -6059,7 +6076,7 @@ impl<'db> Type<'db> {
                         self
                     }
                 }
-                TypeMapping::PromoteLiterals
+                TypeMapping::PromoteLiterals { .. }
                     | TypeMapping::BindLegacyTypevars(_)
                     | TypeMapping::BindSelf(_)
                     | TypeMapping::ReplaceSelf { .. }
@@ -6074,7 +6091,7 @@ impl<'db> Type<'db> {
                 }
                 TypeMapping::Specialization(_) |
                 TypeMapping::PartialSpecialization(_) |
-                TypeMapping::PromoteLiterals |
+                TypeMapping::PromoteLiterals { .. } |
                 TypeMapping::BindSelf(_) |
                 TypeMapping::ReplaceSelf { .. } |
                 TypeMapping::MarkTypeVarsInferable(_) |
@@ -6085,7 +6102,7 @@ impl<'db> Type<'db> {
                 let function = Type::FunctionLiteral(function.apply_type_mapping_impl(db, type_mapping, visitor));
 
                 match type_mapping {
-                    TypeMapping::PromoteLiterals => function.promote_literals_impl(db),
+                    TypeMapping::PromoteLiterals { promote_modules_and_functions } => function.promote_literals_impl(db, *promote_modules_and_functions),
                     _ => function
                 }
             }
@@ -6193,7 +6210,7 @@ impl<'db> Type<'db> {
                 TypeMapping::ReplaceSelf { .. } |
                 TypeMapping::MarkTypeVarsInferable(_) |
                 TypeMapping::Materialize(_) => self,
-                TypeMapping::PromoteLiterals => self.promote_literals_impl(db)
+                TypeMapping::PromoteLiterals { promote_modules_and_functions } => self.promote_literals_impl(db, *promote_modules_and_functions)
             }
 
             Type::Dynamic(_) => match type_mapping {
@@ -6203,7 +6220,7 @@ impl<'db> Type<'db> {
                 TypeMapping::BindSelf(_) |
                 TypeMapping::ReplaceSelf { .. } |
                 TypeMapping::MarkTypeVarsInferable(_) |
-                TypeMapping::PromoteLiterals => self,
+                TypeMapping::PromoteLiterals { .. } => self,
                 TypeMapping::Materialize(materialization_kind) => match materialization_kind {
                     MaterializationKind::Top => Type::object(),
                     MaterializationKind::Bottom => Type::Never,
@@ -6730,7 +6747,7 @@ pub enum TypeMapping<'a, 'db> {
     PartialSpecialization(PartialSpecialization<'a, 'db>),
     /// Replaces any literal types with their corresponding promoted type form (e.g. `Literal["string"]`
     /// to `str`, or `def _() -> int` to `Callable[[], int]`).
-    PromoteLiterals,
+    PromoteLiterals { promote_modules_and_functions: bool },
     /// Binds a legacy typevar with the generic context (class, function, type alias) that it is
     /// being used in.
     BindLegacyTypevars(BindingContext<'db>),
@@ -6763,7 +6780,7 @@ impl<'db> TypeMapping<'_, 'db> {
         match self {
             TypeMapping::Specialization(_)
             | TypeMapping::PartialSpecialization(_)
-            | TypeMapping::PromoteLiterals
+            | TypeMapping::PromoteLiterals { .. }
             | TypeMapping::BindLegacyTypevars(_)
             | TypeMapping::MarkTypeVarsInferable(_)
             | TypeMapping::Materialize(_) => context,
diff --git a/crates/ty_python_semantic/src/types/call/bind.rs b/crates/ty_python_semantic/src/types/call/bind.rs
index 59a38e303beed4..94348dffb0ef11 100644
--- a/crates/ty_python_semantic/src/types/call/bind.rs
+++ b/crates/ty_python_semantic/src/types/call/bind.rs
@@ -2498,9 +2498,12 @@ impl<'a, 'db> ArgumentTypeChecker<'a, 'db> {
             // The inherited generic context is used when inferring the specialization of a generic
             // class from a constructor call. In this case (only), we promote any typevars that are
             // inferred as a literal to the corresponding instance type.
-            builder
-                .build(gc)
-                .apply_type_mapping(self.db, &TypeMapping::PromoteLiterals)
+            builder.build(gc).apply_type_mapping(
+                self.db,
+                &TypeMapping::PromoteLiterals {
+                    promote_modules_and_functions: true,
+                },
+            )
         });
     }
 
diff --git a/crates/ty_python_semantic/src/types/diagnostic.rs b/crates/ty_python_semantic/src/types/diagnostic.rs
index ea7d54841c8f8f..de65181fa1c55e 100644
--- a/crates/ty_python_semantic/src/types/diagnostic.rs
+++ b/crates/ty_python_semantic/src/types/diagnostic.rs
@@ -2662,7 +2662,7 @@ pub(crate) fn report_undeclared_protocol_member(
     if definition.kind(db).is_unannotated_assignment() {
         let binding_type = binding_type(db, definition);
 
-        let suggestion = binding_type.promote_literals(db);
+        let suggestion = binding_type.promote_literals(db, true);
 
         if should_give_hint(db, suggestion) {
             diagnostic.set_primary_message(format_args!(
diff --git a/crates/ty_python_semantic/src/types/infer/builder.rs b/crates/ty_python_semantic/src/types/infer/builder.rs
index 204d14d5700ded..a45ad91e0b9192 100644
--- a/crates/ty_python_semantic/src/types/infer/builder.rs
+++ b/crates/ty_python_semantic/src/types/infer/builder.rs
@@ -5432,7 +5432,7 @@ impl<'db, 'ast> TypeInferenceBuilder<'db, 'ast> {
 
                 // Convert any element literals to their promoted type form to avoid excessively large
                 // unions for large nested list literals, which the constraint solver struggles with.
-                let inferred_elt_ty = inferred_elt_ty.promote_literals(self.db());
+                let inferred_elt_ty = inferred_elt_ty.promote_literals(self.db(), true);
 
                 builder
                     .infer(Type::TypeVar(*elt_ty), inferred_elt_ty)