Weird use of Omit

middleearth.ts

type Species = 'hobbit' | 'orc' | 'elf' | 'man';

interface MiddleEarthDenizen {
    name:  string
    species: Species
}

interface Hobbit extends Omit<MiddleEarthDenizen, 'species'> {
    burrow: string
    species: 'hobbit'
}

let h1: Hobbit = {name: 'Bilbo', burrow: 'Bag End', species: 'hobbit'};

function showMiddleEarthDenizen(denizen: MiddleEarthDenizen) {
    console.log(h1);
}

showMiddleEarthDenizen(h1);