org-babel-expand-noweb-references in the current master branch ends with:

  (replace-regexp-in-string noweb-re (lambda...) body nil t 2)

I.e., the FIXEDCASE argument to replace-regexp-in-string is nil. This
has the effect that in

  #+BEGIN_SRC elisp :noweb-ref AA
    (ignore)
  #+END_SRC

  #+BEGIN_SRC elisp :noweb yes
    <<AA>>
  #+END_SRC

the second block is expanded as "(IGNORE)". That probably is a bug.
FIXEDCASE should be t.

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