Just saw this reply by Chad Retz on slack, this resolves the issue for me thanks:
So we don’t support Enum or str extensions, but we do support StrEnum. See GitHub - temporalio/sdk-python: Temporal Python SDK and the logic at sdk-python/temporalio/converter.py at d5edb71ac25f0d82582ec16f13410b0388addc10 · temporalio/sdk-python · GitHub. What’s probably happening with your code is the hint is not a str and is not IntEnum or StrEnum so it’s matching Iterable and treated like an iterable of characters.
You can either set the datatype to str, use a StrEnum, or make a custom converter