Is this meant to track the standard library changes to take advantage of (and demonstrate viability) of the feature? If not, we need a separate issue.

No, this tracks the compiler feature alone.

Beyond an issue, that would require a separate swift-evolution proposal.

Good point. But someone should still do that work in parallel with the implementation. The last time we thought we had a complete working implementation of this (or a similar?) feature, Dmitri tried to use it in the stdlib and kept finding problems.

This bug tracks implementing the parser and type checker support for a typealias decl inside a protocol decl.

Note that we could already define a typealias inside a protocol extension, which is a bit buggy because of some name lookup issues, as Dmitri discovered. However those are separate issues that we can address without breaking source compatibility.