TS needs a little help here; otherwise it considers commonIndent as string | undefined. Even though there's the commonIndent === undefined check above, the reference here is in a closure and could possibly be used somewhere outside.

An alternative would be to create a new binding just for the closure, like so:

let commonIndent = lines.pop();
if (commonIndent === undefined || !RE_BLANK.test(commonIndent)) {
    throw new RangeError("Closing delimiter must appear on a new line.");
}

// commonIndent is inferred and guaranteed to be a string.
let commonLength = commonIndent.length;
function dedent(line: string, idx: number): string {
    let lineIndent = line.slice(0, (commonIndent as string).length);
    // ...
}

return lines.map(dedent).join("\n");

I thiknk this reads quite well too, but the drawback is that this solution pollutes and compiled JS. OTOH, the commonIndent as string assertion is TS-only and is removed during compilation.

I did a quick check on this in the playground and it seems declaring commonIndent as a const and writing dedent as an arrow function (so the function won't be hoisted) should allow the commonIndent === undefined type guard to work correctly.

You're right, thank you! I implemented your suggestion, and it made me think that just getting rid of the closure would also be a solution :) So I ended up doing that instead.