Fresh {} is subtype of object

Author: ahejlsberg

src/compiler/checker.ts

@@ -18232,7 +18232,7 @@ namespace ts {
             // Since unions and intersections may reduce to `never`, we exclude them here.
             if (s & TypeFlags.Undefined && (!strictNullChecks && !(t & TypeFlags.UnionOrIntersection) || t & (TypeFlags.Undefined | TypeFlags.Void))) return true;
             if (s & TypeFlags.Null && (!strictNullChecks && !(t & TypeFlags.UnionOrIntersection) || t & TypeFlags.Null)) return true;
-            if (s & TypeFlags.Object && t & TypeFlags.NonPrimitive && !(relation === strictSubtypeRelation && isEmptyAnonymousObjectType(source))) return true;
+            if (s & TypeFlags.Object && t & TypeFlags.NonPrimitive && !(relation === strictSubtypeRelation && isEmptyAnonymousObjectType(source) && !(getObjectFlags(source) & ObjectFlags.FreshLiteral))) return true;
             if (relation === assignableRelation || relation === comparableRelation) {
                 if (s & TypeFlags.Any) return true;
                 // Type number or any numeric literal type is assignable to any numeric enum type or any
@@ -18978,7 +18978,7 @@ namespace ts {
                     return typeRelatedToSomeType(getRegularTypeOfObjectLiteral(source), target as UnionType, reportErrors && !(source.flags & TypeFlags.Primitive) && !(target.flags & TypeFlags.Primitive));
                 }
                 if (target.flags & TypeFlags.Intersection) {
-                    return typeRelatedToEachType(getRegularTypeOfObjectLiteral(source), target as IntersectionType, reportErrors, IntersectionState.Target);
+                    return typeRelatedToEachType(source, target as IntersectionType, reportErrors, IntersectionState.Target);
                 }
                 // Source is an intersection. For the comparable relation, if the target is a primitive type we hoist the
                 // constraints of all non-primitive types in the source into a new intersection. We do this because the