There are no restrictions for the TC output, so the reason for the strange behavior must be on a different place.
Are you using a Cypress kit? Which one?? CY8CKIT-???
Can you please post your complete project so that we all can have a look at all of your settings. To do so, use
Creator->File->Create Workspace Bundle (minimal)
and attach the resulting file.
Thank you for your respose.
We confirmed with the oscilloscope instead of the LED,
Pulse was also generated in logically inverted output.
We can check the ON of the LED by eye,
However, it seems that LED could not be checked visually.
It was solved by lowering the clock speed.
I'm sorry for confusing you.
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It was evaluated using DVK(CY8CKIT-050).
Furthermore, the clock of the counter was set to 1 MHz.
And, the customer assigned the TC output of the counter not only to the internal digital circuit but also to P 0 .
Since a bypass capacitor is mounted on P0  of DVK,
It turned out that the pulse of TC could not be confirmed with the internal digital circuit.
We understood that it is not a constraint on the connection between fixed function counter and internal digital circuit.
Fine that you got it to work as expected. In the Cypress prototyping kits there are a couple of pins already connected to internals as caps and interfaces. Has been a pitfall for me several times.