>>> import typing
>>> T = typing.TypeVar('T')
>>> (int | T)[typing.Union[str, list]]
NotImplemented

See also issue44633. But in this case the expected result is int | str | list or typing.Union[init, str, list].

@Serhiy, this doesn't just affect typing.Union, it seems that the rest of the typing types don't substitute:

>>> (int | T)[typing.List[str]]
Traceback (most recent call last):
  File "<stdin>", line 1, in <module>
TypeError: Each union arg must be a type, got typing.List[str]

We should probably loosen the check during the union_getitem substitution -- no need to raise the TypeError or check for is_union, just blindly replace the TypeVar. We already do this for types.GenericAlias:

>>> list[T][1]
list[1]

Or if you want to continue checking, maybe checking for PyCallable_Check(obj) in substitution is enough - typing internally accepts callable(o) too:

https://github.com/python/cpython/blob/3.10/Lib/typing.py#L146

There is also problem with other typing types:

>>> (int | T)[typing.List]
Traceback (most recent call last):
  File "<stdin>", line 1, in <module>
TypeError: Each union argument must be a type, got typing.List
>>> (int | T)[typing.List[int]]
Traceback (most recent call last):
  File "<stdin>", line 1, in <module>
TypeError: Each union argument must be a type, got typing.List[int]
>>> (int | T)[typing.Hashable]
Traceback (most recent call last):
  File "<stdin>", line 1, in <module>
TypeError: Each union argument must be a type, got typing.Hashable
>>> (int | T)[typing.Callable[[int], str]]
Traceback (most recent call last):
  File "<stdin>", line 1, in <module>
TypeError: Each union argument must be a type, got typing.Callable[[int], str]
>>> (int | T)[typing.ParamSpec('P')]
Traceback (most recent call last):
  File "<stdin>", line 1, in <module>
TypeError: Each union argument must be a type, got ~P

Despite the fact that they support the | operator.

We can add one by one special support of different types supporting the | operator (ParamSpec, _GenericAlias, _CallableGenericAlias, _UnionGenericAlias, _LiteralGenericAlias, _ConcatenateGenericAlias, _AnnotatedAlias, _SpecialGenericAlias, _CallableType, _TupleType), but it is cumbersome and errorprone. We will need to synchronize code of unionobject.c with typing every time we add new kind of types.

PR 27247 uses more general approach. It calls the | operator for arguments after substitution. So all types which support the | operator are now automatically supported. But the result of parameter substitution can now be typing.Union instead of types.Union.

>>> import typing
>>> import collections.abc
>>> T = typing.TypeVar('T')
>>> (int | T)[list]
int | list
>>> (int | T)[typing.List]
typing.Union[int, typing.List]
>>> (int | T)[list[int]]
int | list[int]
>>> (int | T)[typing.List[int]]
typing.Union[int, typing.List[int]]
>>> (int | T)[collections.abc.Hashable]
int | collections.abc.Hashable
>>> (int | T)[typing.Hashable]
typing.Union[int, typing.Hashable]
>>> (int | T)[collections.abc.Sequence[int]]
int | collections.abc.Sequence[int]
>>> (int | T)[typing.Sequence[int]]
typing.Union[int, typing.Sequence[int]]
>>> (int | T)[collections.abc.Callable[[int], str]]
int | collections.abc.Callable[[int], str]
>>> (int | T)[typing.Callable[[int], str]]
typing.Union[int, typing.Callable[[int], str]]
>>> (int | T)[typing.TypeVar('S')]
int | ~S
>>> (int | T)[typing.ParamSpec('P')]
typing.Union[int, ~P]
>>> (int | T)[str | list]
int | str | list
>>> (int | T)[typing.Union[str, list]]
typing.Union[int, str, list]

I need someone else to own this, sorry.

New changeset 2e3744d50b6e30ea24351e55b4352dcc58fd469e by Serhiy Storchaka in branch 'main':
bpo-44653: Support typing types in parameter substitution in the union type. (GH-27247)
https://github.com/python/cpython/commit/2e3744d50b6e30ea24351e55b4352dcc58fd469e

New changeset 21db59fc75b6ebb01bf120a8e5930fe032174f73 by Miss Islington (bot) in branch '3.10':
bpo-44653: Support typing types in parameter substitution in the union type. (GH-27247) (#27296)
https://github.com/python/cpython/commit/21db59fc75b6ebb01bf120a8e5930fe032174f73

Thanks Serhiy for the report and the fix, and Ken for reviews.

Thanks for taking over here, Ł!