due to the circular nature of this example, the compiler goes into resolveCall for the same node twice in a nested manner

1. the first getResolvedSignature ends up calling resolveAnonymousTypeMembers for typeof BaseItem
2. in the process it preemptively sets empty signatures, members, index infos on that type here
3. but then it also computes real construct signatures here
4. this in turn leads to calling getResolvedSignature again for the same node and all
5. in that inner call we see no construct signatures on typeof BaseItem (those were set to an empty array) so the error is raised because signaturesRelatedTo fails to determine that this source (typeof BaseItem) has the required target signatures
6. this inner call errors and exits, caching the getCandidateForOverloadFailure's result as the links.resolvedSignature. That signature is (Base: new (...args: any[]) => any): any
7. this leads to resolving (): BaseItem as getDefaultConstructSignatures and that replaces the empty construct signatures preemptively set by resolveAnonymousTypeMembers
8. now we climb up the stack, going back to the first/outer getResolvedSignature call for this. When calling getSignatureApplicabilityError the compiler returns an error because it reuses cached RelationComparisonResult.Failed that was cached when relating the argument and parameter types in that inner call
9. so now the compiler computes getCandidateForOverloadFailure again and tries to elaborate this error (again!).
10. this time it succeeds when relating those 2 types because the construct signatures of typeof BaseItem changed "in-between". So the debug assert kicks finally kicks in and the compiler crashes

Thanks a ton for this PR and the explanation! It makes the crash make much more sense to me now.

I will say some of these steps still seem to have a bit of concerning logic and seem to help explain something else weird I noted on my issue, namely that there doesn't have to be a "real" loop in the base type for you to get an error like Argument of type 'typeof BaseItem' is not assignable to parameter of type 'new (...args: any[]) => any'.

Playground (make sure to make any edit to overcome the crash and view an error!)

tbh your example is somewhat convoluted to the point that I'm not sure if it should error or not. It's definitely outside of the "regular TS" territory 😅 so all I was after here was to fix the crash. Once this gets fixed you might want to raise a new issue about the circularity issue if you thing it shouldn't be reported