Rjack wrote:
What happens to the static element such that it is "modified" code?

It is incorporated into a collective work.

The elements incorporated into the collective work formed by creating a statically linked executable file are not distributed as
 separate works.

Sure they are: http://ftp.gnu.org/gnu/glibc/. You can explicitly
compile each routine into a separate GPL'd "*.o" module by using
compiler options. These modules are then free for the World to use
by authority of sec. 1 of the GPL.

What in the world are you talking about? Read 17 USC 201. Read it
again. To copy and distribute a collective work containing copyrighted
elements requires separate permission from the copyright holders of
those elements. That permission extends only to use in that collective
work. Any other permission you have in those elements is irrelevant.
Just because you are allowed to copy and distribute them separately
does not give you permission to use them in a collective work. The
only permission to use GPLed elements in a collective work is when
the work as a whole is distributed under the GPL.
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