A system with two classes is compiled, where one of the classes is mentioned in an option clause in the Ace file. Both classes are in the same cluster and the Ace file uses "all" to include all classes in the entire directory tree. Then a new sub-directory is created and the class is moved into that sub-directory. When the system is recompiled, the compiler reports a bogus VD16 error. Discovered in release 5.3.0620.