Hot to fix "Type 'string' is not assignable to type 'T'"?

Use Overloading:

function createArray(length: number, value: string): string[];

function createArray<T>(length: number, value: T): T[];

function createArray<T>(length: number, value: T|string): (T|string)[] {
    let result = [];
    for (let i = 0; i < length; i++) {
        if (typeof value === 'string') {
            result[i] = value + '_' + i;  // Type 'string' is not assignable to type 'T'. 'T' could be instantiated with an arbitrary type which could be unrelated to 'string'.
        } else {
            result[i] = value;
        }
        
    }
    return result;
}

console.log(createArray(3, 'x'));           // ["x_0", "x_1", "x_2"] 

console.log(createArray(3, 23));            // [23, 23, 23]

console.log(createArray(3, {hi: "hello"})); // [{
                                            //   "hi": "hello"
                                            // }, {
                                            //   "hi": "hello"
                                            // }, {
                                            //   "hi": "hello"
                                            // }] 

See demo.