How can I define an object type with one value if the key is in an array and another value if not

We should make allFinished generic for this to be properly typed.

function allFinished<
  T extends Record<K, { isFinished: boolean }> & Record<string, unknown>, 
  K extends string
>(pendingProps: K[], allProps: T): boolean {
    return pendingProps.every((pendingProp) => allProps[pendingProp].isFinished)
}

The essentially expresses the constraints you mentioned in your question. All pendingProps will be stored in K while the allProps object is stored in T. T is constrained so that every property where the key is part of K must have a property isFinished. But every other string property will have an unknown type.

Let's see if this works:

allFinished(["a", "b", "c"], {
    a: { isFinished: true },
    b: { isFinished: false },
    c: {},  // Error: Property 'isFinished' is missing in type '{}' but required in type '{ isFinished: boolean; }'
    d: {}
})

Playground