Environment

• Operating System: Darwin
• Node Version: v18.15.0
• Nuxt Version: 3.8.0
• CLI Version: 3.9.1
• Nitro Version: 2.7.0
• Package Manager: yarn@1.22.19
• Builder: -
• User Config: app, vite, css, components, imports, modules, nitro, runtimeConfig, postcss, devtools, typescript
• Runtime Modules: nuxt-vitest@0.10.2, @vueuse/nuxt@10.5.0, @pinia/nuxt@0.4.11, @formkit/nuxt@1.2.2
• Build Modules: -

Reproduction

1. In a Nuxt project, use $fetch and pass the server property. Notice typescript doesn't show any problems.
2. Add a generic to $fetch, notice typescript now says server isn't supported.

Describe the bug

When using the generic form of $fetch, typescript shows server isn't supported but when you remove the generic it is.

Additional context

Added to this repo via @danielroe advice via discord internal/bugs. I'm sure he probably has more insight but this is all I know.

Logs

No response