fix: Schema.extend with nested union (#2396)

.changeset/warm-crews-whisper.md

@@ -0,0 +1,5 @@
+---
+"@effect/schema": patch
+---
+
+Fix extend with nested union.

packages/schema/src/Schema.ts

@@ -2335,7 +2335,11 @@ const intersectUnionMembers = (
   AST.Union.make(
     xs.flatMap((x) => {
       return ys.map((y) => {
-        if (AST.isTypeLiteral(x)) {
+        if (AST.isUnion(x)) {
+          return intersectUnionMembers(x.types, [y], path)
+        } else if (AST.isUnion(y)) {
+          return intersectUnionMembers([x], y.types, path)
+        } else if (AST.isTypeLiteral(x)) {
           if (AST.isTypeLiteral(y)) {
             return intersectTypeLiterals(x, y, path)
           } else if (

packages/schema/test/Schema/extend.test.ts

@@ -115,6 +115,26 @@ describe("Schema > extend", () => {
       expect(is({ a: "b" })).toBe(false)
     })
 
+    it(`union extend on nested union`, () => {
+      const schema = S.union(
+        S.union(
+          S.struct({ a: S.literal("a") }),
+          S.struct({ a: S.literal("b") })
+        ),
+        S.struct({ b: S.literal("b") })
+      ).pipe(
+        S.extend(S.struct({ c: S.boolean }))
+      )
+      const is = S.is(schema)
+
+      expect(is({ a: "a", c: false })).toBe(true)
+      expect(is({ b: "b", c: false })).toBe(true)
+      expect(is({ a: "b", c: false })).toBe(true)
+
+      expect(is({ a: "a" })).toBe(false)
+      expect(is({ a: "b" })).toBe(false)
+    })
+
     it(`union extend union`, () => {
       const schema = S.union(
         S.struct({ a: S.literal("a") }),