Can someone explain how does Typescript inferred the type of Generic T here?

Question

How did typescript inferred that: T will be "basic" | "minimal" instead of the entire object passed. Can someone please explain how is this possible? How does typescript infer types?

type TProjectionKeyValue = { [key: string]: 0 | 1 };

type PType = "basic" | "minimal";

const ProjectionBuilder = <T extends PType>(projections: { [key in T]: TProjectionKeyValue }, defaultProjection: string = "basic") => {
  const buildProjection = (requiredProjections: T[]) => {
    
  };

  return buildProjection;
};

const mainProjections = ProjectionBuilder({
  basic: {
    name: 0,
    kdldl: 1,
    jkjk: 0
  },
  minimal: {}
});

const x = {
  basic: {
    name: 0,
    kdldl: 1,
    jkjk: 0
  },
  minimal: {}
}