Fails to eval sh environment

[Philip Willoughby]

Configuration Information [Automatically generated, do not change]:
Machine: i686
OS: linux-gnu
Compiler: gcc
Compilation CFLAGS:  -DPROGRAM='bash' -DCONF_HOSTTYPE='i686' 
-DCONF_OSTYPE='linux-gnu' -DCONF_MACHTYPE='i686-pc-linux-gnu' 
-DCONF_VENDOR='pc' -DSHELL -DHAVE_CONFIG_H  -I.  -I. -I./include -I./lib  -g -O2
uname output: Linux kungfu 2.4.17 #1 SMP Thu Jan 3 14:44:26 GMT 2002 i686 
unknown
Machine Type: i686-pc-linux-gnu

Bash Version: 2.05b
Patch Level: 0
Release Status: release

Description:
Bourne shell environment variable setting/exporting does not work from within
a backtick expression.

Repeat-By:
Create a file called test.sh containing (for instance):

-------
PATH=/usr/bin:/bin
export PATH
-------

then execute `cat test.sh` it will report that it could not find
"PATH=/usr/bin:/bin" in order to execute it.

Fix:
A workaround is to substitute 
`_command_`

with

_command_ > blah.$$ ; . blah.$$ ; rm -f blah.$$

But this is not a good solution.