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side-effecting functions ...

[ I know this has been discussed sometime in the past, so please excuse
  its new presence. ]

Suppose we are going to compile the following forms:


(Assume FOO is not an FLET/LABELS function..)

I am assuming that #1 uses the function definition for NEW-FOO and
that #2 uses the current definition for FOO. Should #3 behave as
#1 or #2 or is this purposefully left undefined to discourage
coding practices like this?