Setting paths in lib's tsconfig breaks app

We've got a multiproject build where app depends on lib.

lib exports a client function that creates a Connect RPC client from a service definition.

This compiles fine until we add a paths section to lib's tsconfig, at which point app's build fails with

app/src/client.ts:4:14 - error TS2742: The inferred type of 'example' cannot be named without a reference to '../../node_modules/@ahaines/lib/src/api/protobuf/example_pb.js'. This is likely not portable. A type annotation is necessary.

4 export const example = client(Service).example;
               ~~~~~~~

To see it in action, run

$ npm install
$ npm run repro

To bisect it, I ran

$ every-ts bisect start v5.4.2 v5.3.3
$ every-ts bisect run ./repro