Broken parsing of quoted strings in backquotes

[Martin Wheatley]

Configuration Information [Automatically generated, do not change]:
Machine: sparc
OS: solaris2.7
Compiler: gcc
Compilation CFLAGS:  -DPROGRAM='bash' -DCONF_HOSTTYPE='sparc' 
-DCONF_OSTYPE='solaris2.7' -DCONF_MACHTYPE='sparc-sun-solaris2.7' 
-DCONF_VENDOR='sun' -DLOCALEDIR='/usr/local/depot/bash-3.2/share/locale' 
-DPACKAGE='bash' -DSHELL  -DHAVE_CONFIG_H   -I.  -I. -I./include -I./lib   -g 
-O2
uname output: SunOS xn-sysadm-4 5.10 Generic_118833-33 sun4u sparc 
SUNW,Sun-Blade-100
Machine Type: sparc-sun-solaris2.7

Bash Version: 3.2
Patch Level: 0
Release Status: release

Description:
        Parsing of quoted strings broken when string contains "# " sequence

Repeat-By:
        Execution of...

        OKAY:   echo "H" | sed -e 's/ /XXX/'
        OKAY:   echo "H" | sed -e 's# #XXX#'

        OKAY:   a=`echo "H" | sed -e 's/ /XXX/'`
        FAIL:   a=`echo "H" | sed -e 's# #XXX#'`

        The fault has been introduced since version 3.1.17(1)

        We think this maybe related to item 31 of the COMPAT notes