diff -p -u -r1.1 Subst.py
--- src/engine/SCons/Subst.py	19 Sep 2005 11:14:52 -0000	1.1
+++ src/engine/SCons/Subst.py	19 Oct 2005 15:14:31 -0000
@@ -713,6 +713,7 @@ def scons_subst_list(strSubst, env, mode
                         y = self.conv(y)
                         if is_String(y):
                             y = CmdStringHolder(y, literal1 or literal2)
+                            y.literal = None
                         self[-1][-1] = y
 
         def add_new_word(self, x):