As of version 0.656, the Vector3 type is incompatible with the newly added vector type (returned from the Luau vector library) despite them being completely identical. Since typeof(vector) == 'Vector3' and they act the same at runtime it should be expected that the types are compatible.
--!strict
local _:Vector3 = vector.zero --Type 'vector' could not be converted to 'Vector3'
local _:vector = Vector3.zero --Type 'Vector3' could not be converted to 'vector'
Expected behavior
Either vector becomes an alias of Vector3 (or vice versa), or the types become compatible with eachother. However since .x, .y and .z are used to access the vector type and .X, .Y and .Z are used on Vector3 there should be typechecking support for accessing components regardless of the case used.