Here's the response from Al at MS. It may seem like an edge case, but
I guarantee this thing will become one serious pain in the arse once
IE7 becomes mainstream. Here's to hoping they fix it.
"Thank you. I will make sure that this is passed to our CSS team.
Because of where we are in the product
I'm trying to confirm whether this is a true breakage of the CSS spec.
If so I want to raise awareness of it and hopefully get MS's attention
to fix it before IE7 final is released. Here's the link to the bug I
submitted, which you need an account to view:
https://connect.microsoft.com/feedback/Vi