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Annoying issue reported by users who had deeply nested source
directories. The patches I've added to the compiler recently worked well
up to 1-2 levels of nesting (which we tested for), but I messed up the
merging of recursive path lists by doing them only at the top level.
So when people had deeper-nested source structures, the paths were
passed incorrectly and ignored some source files when resolving the
DAG.
Fix this so the path lists are merged at a level-order rather than only
at the top, ensuring proper resolving.