To be honest, that proposal sounds like it would make the problem even worse, by blurring the line between dicts and dataclasses even more.

How does creating anonymous TypedDicts (and allowing them to be nested on the fly) blur the line "even more" when those features are not supported by dataclasses?

I mean I agree w.r.t. the blurriness in general but this PEP is not going to change anything about that, in neither direction.

True, but I think what I don't like is that this PEP essentially creates an entire new way of "type definitions" that is separate from the type definitions we already have.

I get the rationale for "anonymous strict" return types, but then I think a better way would be to think up some way to accomplish that for dataclasses.