BUG #1964: Role membership error

The following bug has been logged online:

Bug reference: 1964
Logged by: Kevin Walker
Email address: kwalker(at)ameritrade(dot)com
PostgreSQL version: 8.1 beta 3
Operating system: Windows XP
Description: Role membership error
Details:

I created a group role called dbadmin and assigned it the privileges that I
wanted. I then created a new login role and attempted to add this new login
as a member in the group role. The following error is generated in pgAdmin
III and when the same steps are performed manually.

ERROR: role "dbadmin" is a member of role "kw"

The message suggests that the login role "kw" is already a member of group
role "dbadmin" which is not the case. Using the alter group command also
produces the same error.

This problem is occurring on the build for Windows. I have not tested this
process on a Linux build yet.