I think it’s fine if syntactically it looks like there is a witness of Never as long as there isn’t actually one (because that would lead to unsoundness).
For example, consider the case where a function takes a callback:
import sys
from collections.abc import Callable
def f(callback: Callable[[int], int]) -> list[int]:
return [callback(1), callback(2)]
f(callback=lambda x: sys.exit())
The type checker has to assume here that Never is compatible with any return type.