I've heard that, but never seen an example*. If the type system complains of an issue in other code after a local change, doesn't that mean that the other code indeed needs updating (modulo false positives, which should be rarer with granular types).

Or is this about libraries and API compatibility?

* I have seen examples of spooky-action-at-a-distance where usage of a function changes its inferred type, but that goes away if functions are allowed to have union types, which is complicated but not impossible. See: https://github.com/microsoft/TypeScript/issues/15114