diff --git a/mypy/messages.py b/mypy/messages.py
@@ -3521,11 +3521,20 @@ def ignore_last_known_values(t: UnionType) -> Type:
     last_known_values are kept during union simplification, but may cause
     weird formatting for e.g. tuples of literals.
     """
+    # Flatten nested unions reached through type aliases so an item like
+    # ``AnotherAlias`` (where ``AnotherAlias = str | None``) does not
+    # bypass deduplication just because it is wrapped in a TypeAliasType.
+    # Keep recursive aliases intact so we don't try to expand them forever.
+    items = flatten_nested_unions(t.items, handle_recursive=False)
     union_items: list[Type] = []
     seen_instances = set()
-    for item in t.items:
-        if isinstance(item, ProperType) and isinstance(item, Instance):
-            erased = item.copy_modified(last_known_value=None)
+    for item in items:
+        if isinstance(item, TypeAliasType) and item.is_recursive:
+            union_items.append(item)
+            continue
+        proper = get_proper_type(item)
+        if isinstance(proper, Instance):
+            erased = proper.copy_modified(last_known_value=None)
             if erased in seen_instances:
                 continue
             seen_instances.add(erased)

diff --git a/test-data/unit/check-python312.test b/test-data/unit/check-python312.test
@@ -2282,6 +2282,19 @@ if isinstance(x, tuple):
 [builtins fixtures/tuple.pyi]
 [typing fixtures/typing-full.pyi]
 
+[case testPEP695TypeAliasUnionErrorDeduplicatesOverlappingItems]
+# Regression test for https://github.com/python/mypy/issues/22194
+# Overlapping aliases should not render as e.g. "str | str | None".
+type TextInput = str
+type ImageInput = str | None
+type SingleInput = TextInput | ImageInput
+
+def f(x: SingleInput) -> None: ...
+
+f(1)  # E: Argument 1 to "f" has incompatible type "int"; expected "str | None"
+[builtins fixtures/tuple.pyi]
+[typing fixtures/typing-full.pyi]
+
 [case testPEP695MultipleTypeVarTuples]
 from typing import Generic
 from typing_extensions import TypeVarTuple, Unpack

diff --git a/test-data/unit/check-type-aliases.test b/test-data/unit/check-type-aliases.test
@@ -1449,3 +1449,24 @@ Alias1: TypeAlias = Union[C, int]
 class SomeClass:
     pass
 [builtins fixtures/tuple.pyi]
+
+[case testUnionTypeAliasErrorDeduplicatesOverlappingItems]
+# Regression test for https://github.com/python/mypy/issues/22194
+# Overlapping aliases should not render as e.g. "str | str | None".
+from typing_extensions import TypeAlias
+
+TextInput: TypeAlias = str
+ImageInput: TypeAlias = str | None
+SingleInput: TypeAlias = TextInput | ImageInput
+
+def f(x: SingleInput) -> None: ...
+
+f(1)  # E: Argument 1 to "f" has incompatible type "int"; expected "str | None"
+
+Opt: TypeAlias = int | None
+U: TypeAlias = int | Opt
+
+def g(x: U) -> None: ...
+
+g("x")  # E: Argument 1 to "g" has incompatible type "str"; expected "int | None"
+[builtins fixtures/tuple.pyi]