When doing something with a Union, your code should be valid for every choice of the Union:

type U = int | str

def f(u: U) -> None:
    u.lower()  # type checking error

Having first-order functions as the Union choices and passing a wrong argument to them also gives an error:

from collections.abc import Callable

type Takes[T] = Callable[[T], object]

type U = Takes[int] | Takes[str]

def f(u: U) -> None:
    u(42)  # type checking error

But passing a lambda of a wrong type to a Union of higher-order functions does not produce an error:

from collections.abc import Callable

type Takes[T] = Callable[[T], object]

type U = Takes[Takes[int]] | Takes[Takes[str]]

def f(u: U) -> None:
    u(lambda v: v.lower())  # no error :(

Mypy shows an error for the above code (substituting PEP 695 type aliases with the old ones, since they're not yet supported by mypy), and I expect pyright to do the same.