Contravariance then, right. Thanks! I haven't gotten into Typescript yet, and at this point it looks fairly large and a little daunting, so this is helpful.
The major tradeoff, IMO, is that it is even toggle-able at all, let alone being a feature switch that is enabled by default.
If you enter any random TS project today, odds are it isn't using that switch, and enabling the switch will lead you down a month long rabbit-hole of fixing cascading type errors.
Not only that, but since it isn't required many libraries in the ecosystem won't be using it. Comparing my experiences with TypeScript and Flow vs. my experiences with Haskell, any optional type system is going to leave a lot of gaps if you don't have a pretty strict not-invented-here culture.