sub class method params assignability check doesn't give error with string vs literals

[LabhanshAgrawal]

TypeScript Version: 3.9.2 (also tested in nightly)

Search Terms:
TS2416 literal
subclass methods literals

Code

class foo {
  fn(x: string) {
    return x;
  }
}

class bar extends foo {
  fn(x: 'a' | 'b' | 'c') {
    return '';
  }
}

class baz extends foo {
  fn(x: 'a' | 'b' | 'c' | undefined) {
    return '';
  }
}

Expected behavior:

Getting an error Property 'fn' in type <sub class> is not assignable to the same property in base type 'foo'.
As

Types of parameters 'x' and 'x' are incompatible.
      Type 'string' is not assignable to type <corresponding param type of fn in sub class>.

for both classes bar and baz

Actual behavior:

The error is only shown on class baz. It should also be there on bar as string is not assignable to 'a' | 'b' | 'c' also.

Playground Link: playground

Related Issues: couldn't find (#35151 came up in search and looked similar but it was a different issue.)

[RyanCavanaugh]

Class method types are compared bivariantly; see comments in #18654

[typescript-bot]

This issue has been marked 'Working as Intended' and has seen no recent activity. It has been automatically closed for house-keeping purposes.