Issues with TypeScript Generics and Strict Mode in Schema Transformation

const makeSchema =
  <Fields extends Schema.Struct.Fields>(
    fields: Fields,
    derivedIdFn: (self: Schema.Schema.Type<Schema.Struct<Fields>>) => string) => {
  return Schema.Struct(fields).pipe(
    Schema.transform(
      Schema.typeSchema(
        Schema.Struct(fields).pipe(Schema.extend(Schema.Struct({ derivedId: Schema.String })))
      ),
      {
        decode: (input) => {
          const newDerivedId = derivedIdFn(input)
          return { ...input, derivedId: newDerivedId }
        },
        encode: (input) => {
          const { derivedId, ...rest } = input
          return rest
        }
      }
    )
  )
}