This seems to be a compiler bug, but let me know if I've missed something.  The behavior I see is that Make_ok1 and Make_ok2 compile fine, but the very similar functor Make_bad does not.  I get this compile error:

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      Error: Signature mismatch:
             Modules do not match:
               sig
                 module C : sig module T : sig  end type t = Make(T).t end
                 module T = C.T
                 type t = Make(T).t
               end
             is not included in
               sig type t module C : sig type t = t end end
             In module C:
             Modules do not match:
               sig module T : sig  end type t = Make(T).t end
             is not included in
               sig type t = C.t end
             In module C:
             Type declarations do not match:
               type t = Make(T).t
             is not included in
               type t = t

========================================

And here is the code:

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module type S = sig type t end
module Make (M : sig end) : S = struct type t end

module Make_ok1 (M : sig end) : sig

  type t
  module A : S with type t = t

end = struct

  module A = struct
    include Make (struct end)
  end
  include A

end

module Make_ok2 (M : sig end) : sig

  type t
  module B : S with type t = t

end = struct

  module T = struct end
  module B = struct
    include Make (T)
  end
  include B

end

module Make_bad (M : sig end) : sig

  type t
  module C : S with type t = t

end = struct

  module C = struct
    module T = struct end
    include Make (T)
  end
  include C

end

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--
Carl Eastlund