I'm not that familiar with TypeScript, but it feels odd to define Values here when it is used above in the file. Seems confusing.

Can't form field values be of types other than string?

I end up removing string here with any and used any instead of unknown is several different other places, as that really makes the most sense with this Form component.

In relation to your first point, the Values defined above is consolidated to the FormProps type.
Given FormProps takes a generic that means we should also pass a generic into the Form component that will in turn get passed to FormProps -> props: PropsWithChildren< FormProps< Values > >

This would allow us to create a Form component as such: <Form<Product>></Form> meaning that Values is automatically replaced by the Product type and so the initialValues prop will only accept values in the format of Product nothing else.

Btw I make use of extends here, which is TypeScripts way of saying: you can only pass a generic type that follows the Record< string, string > format.
Meaning that I can't do something like this: <Form<string>></Form>, but <Form<{ name: string }></Form> is valid.

Why is it value: unknown when Values is Record< string, string >?

Good point actually, I might of missed this ( to many occurrences of close to the same types) I replace the unknown with any and replaced Record< string, string > with Record< string, any > to more accurately reflect a Form object.