Cannot use <component> with variable "is" prop

[mtorromeo]

When trying to assign a dynamic tag to the is prop of <component> I get the error:

error TS2345: Argument of type '{}' is not assignable to parameter of type 'string & Record<string, unknown>'.
  Type '{}' is not assignable to type 'string'.

Minimal reproduction component:

<script lang="ts" setup>
const tag = 'label';
</script>

<template>
  <component :is="tag">test</component>
// ^^^^^^^^^ Type '{}' is not assignable to type 'string'.
</template>

Stackblitz

[johnsoncodehk]

Duplicate of #2725