diff --git a/src/compiler/checker.ts b/src/compiler/checker.ts
index 5fd321dc90a48..86d1021145897 100644
--- a/src/compiler/checker.ts
+++ b/src/compiler/checker.ts
@@ -15866,7 +15866,7 @@ namespace ts {
                     if (unionParent && !result && targetIsOptional) {
                         result = isRelatedTo(source, undefinedType);
                     }
-                    if (unionParent && !result && reportErrors) {
+                    if (unionParent && !result && source.flags & TypeFlags.Union) {
                         // The easiest way to get the right errors here is to un-defer (which may be costly)
                         // If it turns out this is too costly too often, we can replicate the error handling logic within
                         // typeRelatedToSomeType without the discriminatable type branch (as that requires a manifest union
diff --git a/tests/baselines/reference/excessPropertyCheckWithUnions.errors.txt b/tests/baselines/reference/excessPropertyCheckWithUnions.errors.txt
index efd14c3579779..1776dc16076e2 100644
--- a/tests/baselines/reference/excessPropertyCheckWithUnions.errors.txt
+++ b/tests/baselines/reference/excessPropertyCheckWithUnions.errors.txt
@@ -26,9 +26,9 @@ tests/cases/compiler/excessPropertyCheckWithUnions.ts(66,9): error TS2322: Type
       Object literal may only specify known properties, and 'b' does not exist in type 'AN'.
 tests/cases/compiler/excessPropertyCheckWithUnions.ts(87,5): error TS2322: Type '{ tag: "button"; type: "submit"; href: string; }' is not assignable to type 'Union'.
   Object literal may only specify known properties, and 'href' does not exist in type 'Button'.
-tests/cases/compiler/excessPropertyCheckWithUnions.ts(108,5): error TS2322: Type 'string' is not assignable to type 'IValue'.
-tests/cases/compiler/excessPropertyCheckWithUnions.ts(113,67): error TS2322: Type 'string' is not assignable to type 'number'.
-tests/cases/compiler/excessPropertyCheckWithUnions.ts(114,63): error TS2322: Type 'string' is not assignable to type 'number'.
+tests/cases/compiler/excessPropertyCheckWithUnions.ts(148,5): error TS2322: Type 'string' is not assignable to type 'IValue'.
+tests/cases/compiler/excessPropertyCheckWithUnions.ts(153,67): error TS2322: Type 'string' is not assignable to type 'number'.
+tests/cases/compiler/excessPropertyCheckWithUnions.ts(154,63): error TS2322: Type 'string' is not assignable to type 'number'.
 
 
 ==== tests/cases/compiler/excessPropertyCheckWithUnions.ts (14 errors) ====
@@ -161,13 +161,53 @@ tests/cases/compiler/excessPropertyCheckWithUnions.ts(114,63): error TS2322: Typ
 !!! error TS2322:   Object literal may only specify known properties, and 'href' does not exist in type 'Button'.
     };
     
+    
+    // Repro from #33732
+    
+    interface I1 {
+        prop1: string;
+    }
+    
+    interface I2 {
+        prop2: string;
+    }
+    
+    interface I3 extends Record<string, string> {
+    
+    }
+    
+    type Properties =
+        | { [key: string]: never }
+        | I1
+        | I2
+        | I3
+        ;
+    
+    
+    declare const prop1: string;
+    declare const prop2: string | undefined;
+    
+    function F1(_arg: { props: Properties }) { }
+    F1({
+        props: {
+            prop1,
+            prop2,
+        },
+    });
+    
+    function F2(_props: Properties) { }
+    F2({
+        prop1,
+        prop2,
+    });
+    
     // Repro from #34611
     
     interface IValue {
       value: string
     }
     
-    interface StringKeys { 
+    interface StringKeys {
         [propertyName: string]: IValue;
     };
     
diff --git a/tests/baselines/reference/excessPropertyCheckWithUnions.js b/tests/baselines/reference/excessPropertyCheckWithUnions.js
index 34cd337705a34..ff17e8641a3aa 100644
--- a/tests/baselines/reference/excessPropertyCheckWithUnions.js
+++ b/tests/baselines/reference/excessPropertyCheckWithUnions.js
@@ -88,13 +88,53 @@ const obj: Union = {
     href: 'foo',
 };
 
+
+// Repro from #33732
+
+interface I1 {
+    prop1: string;
+}
+
+interface I2 {
+    prop2: string;
+}
+
+interface I3 extends Record<string, string> {
+
+}
+
+type Properties =
+    | { [key: string]: never }
+    | I1
+    | I2
+    | I3
+    ;
+
+
+declare const prop1: string;
+declare const prop2: string | undefined;
+
+function F1(_arg: { props: Properties }) { }
+F1({
+    props: {
+        prop1,
+        prop2,
+    },
+});
+
+function F2(_props: Properties) { }
+F2({
+    prop1,
+    prop2,
+});
+
 // Repro from #34611
 
 interface IValue {
   value: string
 }
 
-interface StringKeys { 
+interface StringKeys {
     [propertyName: string]: IValue;
 };
 
@@ -170,6 +210,18 @@ var obj = {
     // should have error here
     href: 'foo'
 };
+function F1(_arg) { }
+F1({
+    props: {
+        prop1: prop1,
+        prop2: prop2
+    }
+});
+function F2(_props) { }
+F2({
+    prop1: prop1,
+    prop2: prop2
+});
 ;
 var dataSpecification = {
     foo: "asdfsadffsd"
diff --git a/tests/baselines/reference/excessPropertyCheckWithUnions.symbols b/tests/baselines/reference/excessPropertyCheckWithUnions.symbols
index 8fb86125a5731..18db4abf564ac 100644
--- a/tests/baselines/reference/excessPropertyCheckWithUnions.symbols
+++ b/tests/baselines/reference/excessPropertyCheckWithUnions.symbols
@@ -254,59 +254,143 @@ const obj: Union = {
 
 };
 
+
+// Repro from #33732
+
+interface I1 {
+>I1 : Symbol(I1, Decl(excessPropertyCheckWithUnions.ts, 87, 2))
+
+    prop1: string;
+>prop1 : Symbol(I1.prop1, Decl(excessPropertyCheckWithUnions.ts, 92, 14))
+}
+
+interface I2 {
+>I2 : Symbol(I2, Decl(excessPropertyCheckWithUnions.ts, 94, 1))
+
+    prop2: string;
+>prop2 : Symbol(I2.prop2, Decl(excessPropertyCheckWithUnions.ts, 96, 14))
+}
+
+interface I3 extends Record<string, string> {
+>I3 : Symbol(I3, Decl(excessPropertyCheckWithUnions.ts, 98, 1))
+>Record : Symbol(Record, Decl(lib.es5.d.ts, --, --))
+
+}
+
+type Properties =
+>Properties : Symbol(Properties, Decl(excessPropertyCheckWithUnions.ts, 102, 1))
+
+    | { [key: string]: never }
+>key : Symbol(key, Decl(excessPropertyCheckWithUnions.ts, 105, 9))
+
+    | I1
+>I1 : Symbol(I1, Decl(excessPropertyCheckWithUnions.ts, 87, 2))
+
+    | I2
+>I2 : Symbol(I2, Decl(excessPropertyCheckWithUnions.ts, 94, 1))
+
+    | I3
+>I3 : Symbol(I3, Decl(excessPropertyCheckWithUnions.ts, 98, 1))
+
+    ;
+
+
+declare const prop1: string;
+>prop1 : Symbol(prop1, Decl(excessPropertyCheckWithUnions.ts, 112, 13))
+
+declare const prop2: string | undefined;
+>prop2 : Symbol(prop2, Decl(excessPropertyCheckWithUnions.ts, 113, 13))
+
+function F1(_arg: { props: Properties }) { }
+>F1 : Symbol(F1, Decl(excessPropertyCheckWithUnions.ts, 113, 40))
+>_arg : Symbol(_arg, Decl(excessPropertyCheckWithUnions.ts, 115, 12))
+>props : Symbol(props, Decl(excessPropertyCheckWithUnions.ts, 115, 19))
+>Properties : Symbol(Properties, Decl(excessPropertyCheckWithUnions.ts, 102, 1))
+
+F1({
+>F1 : Symbol(F1, Decl(excessPropertyCheckWithUnions.ts, 113, 40))
+
+    props: {
+>props : Symbol(props, Decl(excessPropertyCheckWithUnions.ts, 116, 4))
+
+        prop1,
+>prop1 : Symbol(prop1, Decl(excessPropertyCheckWithUnions.ts, 117, 12))
+
+        prop2,
+>prop2 : Symbol(prop2, Decl(excessPropertyCheckWithUnions.ts, 118, 14))
+
+    },
+});
+
+function F2(_props: Properties) { }
+>F2 : Symbol(F2, Decl(excessPropertyCheckWithUnions.ts, 121, 3))
+>_props : Symbol(_props, Decl(excessPropertyCheckWithUnions.ts, 123, 12))
+>Properties : Symbol(Properties, Decl(excessPropertyCheckWithUnions.ts, 102, 1))
+
+F2({
+>F2 : Symbol(F2, Decl(excessPropertyCheckWithUnions.ts, 121, 3))
+
+    prop1,
+>prop1 : Symbol(prop1, Decl(excessPropertyCheckWithUnions.ts, 124, 4))
+
+    prop2,
+>prop2 : Symbol(prop2, Decl(excessPropertyCheckWithUnions.ts, 125, 10))
+
+});
+
 // Repro from #34611
 
 interface IValue {
->IValue : Symbol(IValue, Decl(excessPropertyCheckWithUnions.ts, 87, 2))
+>IValue : Symbol(IValue, Decl(excessPropertyCheckWithUnions.ts, 127, 3))
 
   value: string
->value : Symbol(IValue.value, Decl(excessPropertyCheckWithUnions.ts, 91, 18))
+>value : Symbol(IValue.value, Decl(excessPropertyCheckWithUnions.ts, 131, 18))
 }
 
-interface StringKeys { 
->StringKeys : Symbol(StringKeys, Decl(excessPropertyCheckWithUnions.ts, 93, 1))
+interface StringKeys {
+>StringKeys : Symbol(StringKeys, Decl(excessPropertyCheckWithUnions.ts, 133, 1))
 
     [propertyName: string]: IValue;
->propertyName : Symbol(propertyName, Decl(excessPropertyCheckWithUnions.ts, 96, 5))
->IValue : Symbol(IValue, Decl(excessPropertyCheckWithUnions.ts, 87, 2))
+>propertyName : Symbol(propertyName, Decl(excessPropertyCheckWithUnions.ts, 136, 5))
+>IValue : Symbol(IValue, Decl(excessPropertyCheckWithUnions.ts, 127, 3))
 
 };
 
 interface NumberKeys {
->NumberKeys : Symbol(NumberKeys, Decl(excessPropertyCheckWithUnions.ts, 97, 2))
+>NumberKeys : Symbol(NumberKeys, Decl(excessPropertyCheckWithUnions.ts, 137, 2))
 
     [propertyName: number]: IValue;
->propertyName : Symbol(propertyName, Decl(excessPropertyCheckWithUnions.ts, 100, 5))
->IValue : Symbol(IValue, Decl(excessPropertyCheckWithUnions.ts, 87, 2))
+>propertyName : Symbol(propertyName, Decl(excessPropertyCheckWithUnions.ts, 140, 5))
+>IValue : Symbol(IValue, Decl(excessPropertyCheckWithUnions.ts, 127, 3))
 }
 
 type ObjectDataSpecification = StringKeys | NumberKeys;
->ObjectDataSpecification : Symbol(ObjectDataSpecification, Decl(excessPropertyCheckWithUnions.ts, 101, 1))
->StringKeys : Symbol(StringKeys, Decl(excessPropertyCheckWithUnions.ts, 93, 1))
->NumberKeys : Symbol(NumberKeys, Decl(excessPropertyCheckWithUnions.ts, 97, 2))
+>ObjectDataSpecification : Symbol(ObjectDataSpecification, Decl(excessPropertyCheckWithUnions.ts, 141, 1))
+>StringKeys : Symbol(StringKeys, Decl(excessPropertyCheckWithUnions.ts, 133, 1))
+>NumberKeys : Symbol(NumberKeys, Decl(excessPropertyCheckWithUnions.ts, 137, 2))
 
 
 const dataSpecification: ObjectDataSpecification = {  // Error
->dataSpecification : Symbol(dataSpecification, Decl(excessPropertyCheckWithUnions.ts, 106, 5))
->ObjectDataSpecification : Symbol(ObjectDataSpecification, Decl(excessPropertyCheckWithUnions.ts, 101, 1))
+>dataSpecification : Symbol(dataSpecification, Decl(excessPropertyCheckWithUnions.ts, 146, 5))
+>ObjectDataSpecification : Symbol(ObjectDataSpecification, Decl(excessPropertyCheckWithUnions.ts, 141, 1))
 
     foo: "asdfsadffsd"
->foo : Symbol(foo, Decl(excessPropertyCheckWithUnions.ts, 106, 52))
+>foo : Symbol(foo, Decl(excessPropertyCheckWithUnions.ts, 146, 52))
 
 };
 
 // Repro from #34611
 
 const obj1: { [x: string]: number } | { [x: number]: number } = { a: 'abc' };  // Error
->obj1 : Symbol(obj1, Decl(excessPropertyCheckWithUnions.ts, 112, 5))
->x : Symbol(x, Decl(excessPropertyCheckWithUnions.ts, 112, 15))
->x : Symbol(x, Decl(excessPropertyCheckWithUnions.ts, 112, 41))
->a : Symbol(a, Decl(excessPropertyCheckWithUnions.ts, 112, 65))
+>obj1 : Symbol(obj1, Decl(excessPropertyCheckWithUnions.ts, 152, 5))
+>x : Symbol(x, Decl(excessPropertyCheckWithUnions.ts, 152, 15))
+>x : Symbol(x, Decl(excessPropertyCheckWithUnions.ts, 152, 41))
+>a : Symbol(a, Decl(excessPropertyCheckWithUnions.ts, 152, 65))
 
 const obj2: { [x: string]: number } | { a: number } = { a: 5, c: 'abc' };  // Error
->obj2 : Symbol(obj2, Decl(excessPropertyCheckWithUnions.ts, 113, 5))
->x : Symbol(x, Decl(excessPropertyCheckWithUnions.ts, 113, 15))
->a : Symbol(a, Decl(excessPropertyCheckWithUnions.ts, 113, 39))
->a : Symbol(a, Decl(excessPropertyCheckWithUnions.ts, 113, 55))
->c : Symbol(c, Decl(excessPropertyCheckWithUnions.ts, 113, 61))
+>obj2 : Symbol(obj2, Decl(excessPropertyCheckWithUnions.ts, 153, 5))
+>x : Symbol(x, Decl(excessPropertyCheckWithUnions.ts, 153, 15))
+>a : Symbol(a, Decl(excessPropertyCheckWithUnions.ts, 153, 39))
+>a : Symbol(a, Decl(excessPropertyCheckWithUnions.ts, 153, 55))
+>c : Symbol(c, Decl(excessPropertyCheckWithUnions.ts, 153, 61))
 
diff --git a/tests/baselines/reference/excessPropertyCheckWithUnions.types b/tests/baselines/reference/excessPropertyCheckWithUnions.types
index 38e9a6c81e7a4..5f19bbd3ffbfc 100644
--- a/tests/baselines/reference/excessPropertyCheckWithUnions.types
+++ b/tests/baselines/reference/excessPropertyCheckWithUnions.types
@@ -312,6 +312,81 @@ const obj: Union = {
 
 };
 
+
+// Repro from #33732
+
+interface I1 {
+    prop1: string;
+>prop1 : string
+}
+
+interface I2 {
+    prop2: string;
+>prop2 : string
+}
+
+interface I3 extends Record<string, string> {
+
+}
+
+type Properties =
+>Properties : Properties
+
+    | { [key: string]: never }
+>key : string
+
+    | I1
+    | I2
+    | I3
+    ;
+
+
+declare const prop1: string;
+>prop1 : string
+
+declare const prop2: string | undefined;
+>prop2 : string | undefined
+
+function F1(_arg: { props: Properties }) { }
+>F1 : (_arg: { props: Properties; }) => void
+>_arg : { props: Properties; }
+>props : Properties
+
+F1({
+>F1({    props: {        prop1,        prop2,    },}) : void
+>F1 : (_arg: { props: Properties; }) => void
+>{    props: {        prop1,        prop2,    },} : { props: { prop1: string; prop2: string | undefined; }; }
+
+    props: {
+>props : { prop1: string; prop2: string | undefined; }
+>{        prop1,        prop2,    } : { prop1: string; prop2: string | undefined; }
+
+        prop1,
+>prop1 : string
+
+        prop2,
+>prop2 : string | undefined
+
+    },
+});
+
+function F2(_props: Properties) { }
+>F2 : (_props: Properties) => void
+>_props : Properties
+
+F2({
+>F2({    prop1,    prop2,}) : void
+>F2 : (_props: Properties) => void
+>{    prop1,    prop2,} : { prop1: string; prop2: string | undefined; }
+
+    prop1,
+>prop1 : string
+
+    prop2,
+>prop2 : string | undefined
+
+});
+
 // Repro from #34611
 
 interface IValue {
@@ -319,7 +394,7 @@ interface IValue {
 >value : string
 }
 
-interface StringKeys { 
+interface StringKeys {
     [propertyName: string]: IValue;
 >propertyName : string
 
diff --git a/tests/cases/compiler/excessPropertyCheckWithUnions.ts b/tests/cases/compiler/excessPropertyCheckWithUnions.ts
index 635c5c2a7d3f6..9e6a65961f628 100644
--- a/tests/cases/compiler/excessPropertyCheckWithUnions.ts
+++ b/tests/cases/compiler/excessPropertyCheckWithUnions.ts
@@ -88,13 +88,53 @@ const obj: Union = {
     href: 'foo',
 };
 
+
+// Repro from #33732
+
+interface I1 {
+    prop1: string;
+}
+
+interface I2 {
+    prop2: string;
+}
+
+interface I3 extends Record<string, string> {
+
+}
+
+type Properties =
+    | { [key: string]: never }
+    | I1
+    | I2
+    | I3
+    ;
+
+
+declare const prop1: string;
+declare const prop2: string | undefined;
+
+function F1(_arg: { props: Properties }) { }
+F1({
+    props: {
+        prop1,
+        prop2,
+    },
+});
+
+function F2(_props: Properties) { }
+F2({
+    prop1,
+    prop2,
+});
+
 // Repro from #34611
 
 interface IValue {
   value: string
 }
 
-interface StringKeys { 
+interface StringKeys {
     [propertyName: string]: IValue;
 };