Implicit Conversion to Smaller Data Types?

I’ve been working on a project where I have to do a lot of interesting data manipulation. Unfortunately, dealing with implicit conversions has been part of the norm. So naturally, I managed to run across an interesting scenario that had me stumped, thinking that I ran into a strange edge case.

The tl;dr version is that this wasn’t an edge case or some undocumented issue or a bug or anything other than the db engine doing its job. I was looking at one scenario and missed the rest of the clues. But it’s worth sharing how these things are easily missed.