This is clever and worth reading, and I didn't know about some of the 3.12 changes. Overall though I think the author has some pain in store. Using functions like map in Python result in Python iterators which are mutable objects (they consume and throw away an element of the sequence on each iteration) and this often causes hassles unless you convert them to lists (which burns memory and maybe does unnecessary computation). Also, Python's type checking stuff (at least Mypy) are mostly a bug catching feature. They aren't like a real type system though: mistyped programs can still get through, and properly typed ones can get flagged. It's better than nothing and I use it, but it's nowhere near e.g. Haskell.
I don't think I would call this functional. Python is decidedly not at all functional - there's no way to declare arbitrary functions inline, no chaining of map/filter etc.
But the static types are definitely welcome. I didn't know about the type keyword. Apparently it makes it support forward references.
You're still limited by lambda expressions though. And in general the language is still statement based, not expression based. You can't do a = if foo then x else y type things (except for the one-off and backwards x if foo else y; they were so close!).
This is quite cool and a very interesting read. I'm not sure if it's something I would want to use in a real project, because it looks like you're basically inventing a new language within Python's type system itself, which is a little weird. That said, I feel like I learned a lot from reading this, and it was a very interesting demonstration of what you can do with Python's type-checking system.