Nested exhaustive match/case not refining the type

[marpulli]

Describe the Bug

If a nested match/case statement returns on all branches, it doesn't correctly refine the type from the outer branch.

In this example, I'd expect "z" to be inferred as non-null after the if statement but it is inferred as int | None.

from typing import reveal_type, Sequence
from typing import *


AdmitOrReject = Literal["admit", "reject"]

def x(z: int | None, y: AdmitOrReject):
    if z is None:
        match y:
            case "admit":
                return 5
            case "reject":
                return 5
    reveal_type(z)
    return z
    

x(5, "reject")

Sandbox Link

https://pyrefly.org/sandbox/?project=v2.pZW_DoIwEMZfpcEBYoidWEgcfAKNq10aaIABMFAN9un9rtBYlGCMbPT-tNf73dcfJNPTGV8iFjy31CXRHPK60sfurCy_eyebFxFIsoggRkGdtYrADiiBM0QmRWcd8DF7pGyWyTEKZMwC7bXUWYmg1wp9EE2F3aaN34we7climDvk1zjvjiIDCj0PM_5RmUOU-KVPfmT5hGrDTuMCm_oDOQWNxQ2iDcp2otmgGYqVWl_7lHMX3nYFVw3P26znswjOaH7kXVb2KZinY60dgh5p_6E5HGEO11gOCWV4rOL5BA

(Only applicable for extension issues) IDE Information

No response