What does the tsconfig option “lib” do?

This is a new typescript 2 feature and so it still lacks documentation, but you can read about it in the What’s new in Typescript 2.0:

with –lib you can specify a list of built-in API declaration groups
that you can chose to include in your project. For instance, if you
expect your runtime to have support for Map, Set and Promise (e.g.
most evergreen browsers today), just include –lib
es2015.collection,es2015.promise. Similarly you can exclude
declarations you do not want to include in your project, e.g. DOM if
you are working on a node project using –lib es5,es6.

There’s also a list of the API groups that are supported and a very short example in that link.

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