diff --git a/check.t b/check.t
index ba27498..8acd588 100644
--- a/check.t
+++ b/check.t
@@ -1,4 +1,4 @@
-# $MirOS: src/bin/mksh/check.t,v 1.554 2012/08/03 18:45:29 tg Exp $
+# $MirOS: src/bin/mksh/check.t,v 1.555 2012/08/17 18:34:18 tg Exp $
 # $OpenBSD: bksl-nl.t,v 1.2 2001/01/28 23:04:56 niklas Exp $
 # $OpenBSD: history.t,v 1.5 2001/01/28 23:04:56 niklas Exp $
 # $OpenBSD: read.t,v 1.3 2003/03/10 03:48:16 david Exp $
@@ -29,7 +29,7 @@
 # http://www.freebsd.org/cgi/cvsweb.cgi/src/tools/regression/bin/test/regress.sh?rev=HEAD
 
 expected-stdout:
-	@(#)MIRBSD KSH R40 2012/08/03
+	@(#)MIRBSD KSH R40 2012/08/17
 description:
 	Check version of shell.
 stdin:
@@ -38,7 +38,7 @@ name: KSH_VERSION
 category: shell:legacy-no
 ---
 expected-stdout:
-	@(#)LEGACY KSH R40 2012/08/03
+	@(#)LEGACY KSH R40 2012/08/17
 description:
 	Check version of legacy shell.
 stdin:
@@ -9505,26 +9505,6 @@ expected-stdout:
 		x=$(( echo $(true >&3 ) $((1+ 2)) ) | tr u x ) 
 	} 
 ---
-name: funsub-1
-description:
-	Check that non-subenvironment command substitution works
-stdin:
-	set -e
-	foo=bar
-	echo "ob $foo ."
-	echo "${
-		echo "ib $foo :"
-		foo=baz
-		echo "ia $foo :"
-		false
-	}" .
-	echo "oa $foo ."
-expected-stdout:
-	ob bar .
-	ib bar :
-	ia baz : .
-	oa baz .
----
 name: test-stnze-1
 description:
 	Check that the short form [ $x ] works
diff --git a/dot.mkshrc b/dot.mkshrc
index d850e99..4d61dd5 100644
--- a/dot.mkshrc
+++ b/dot.mkshrc
@@ -1,5 +1,5 @@
 # $Id$
-# $MirOS: src/bin/mksh/dot.mkshrc,v 1.70 2012/07/30 21:37:10 tg Exp $
+# $MirOS: src/bin/mksh/dot.mkshrc,v 1.71 2012/08/17 18:34:20 tg Exp $
 #-
 # Copyright (c) 2002, 2003, 2004, 2006, 2007, 2008, 2009, 2010,
 #		2011, 2012
@@ -30,7 +30,7 @@ function precmd {
 
 	(( e )) && print -n "$e|"
 }
-PS1=$'\001\r''${ precmd;}${USER:=$(ulimit -c 0; id -un 2>/dev/null || echo \?
+PS1=$'\001\r''$(precmd)${USER:=$(ulimit -c 0; id -un 2>/dev/null || echo \?
 	)}@${HOSTNAME%%.*}:$(local d=${PWD:-?} p=~; [[ $p = ?(*/) ]] || \
 	d=${d/#$p/~}; local m=${%d} n p=...; (( m > 0 )) || m=${#d}
 	(( m > (n = (COLUMNS/3 < 7 ? 7 : COLUMNS/3)) )) && d=${d:(-n)} || \
diff --git a/eval.c b/eval.c
index 34ace2f..68f1246 100644
--- a/eval.c
+++ b/eval.c
@@ -23,7 +23,7 @@
 
 #include "sh.h"
 
-__RCSID("$MirOS: src/bin/mksh/eval.c,v 1.123 2012/07/30 21:37:11 tg Exp $");
+__RCSID("$MirOS: src/bin/mksh/eval.c,v 1.124 2012/08/17 18:34:20 tg Exp $");
 
 /*
  * string expansion
@@ -58,7 +58,7 @@ typedef struct Expand {
 #define IFS_NWS		2	/* have seen IFS non-white-space */
 
 static int varsub(Expand *, const char *, const char *, int *, int *);
-static int comsub(Expand *, const char *, int);
+static int comsub(Expand *, const char *);
 static char *trimsub(char *, char *, int);
 static void glob(char *, XPtrV *, int);
 static void globit(XString *, char **, char *, XPtrV *, int);
@@ -278,27 +278,18 @@ expand(const char *cp,	/* input word */
 				quote = st->quotew;
 				continue;
 			case COMSUB:
-			case FUNSUB:
 				tilde_ok = 0;
 				if (f & DONTRUNCOMMAND) {
 					word = IFS_WORD;
 					*dp++ = '$';
-					if (c == FUNSUB) {
-						*dp++ = '{';
-						*dp++ = ' ';
-					} else
-						*dp++ = '(';
+					*dp++ = '(';
 					while (*sp != '\0') {
 						Xcheck(ds, dp);
 						*dp++ = *sp++;
 					}
-					if (c == FUNSUB) {
-						*dp++ = ';';
-						*dp++ = '}';
-					} else
-						*dp++ = ')';
+					*dp++ = ')';
 				} else {
-					type = comsub(&x, sp, c);
+					type = comsub(&x, sp);
 					if (type == XCOM && (f&DOBLANK))
 						doblank++;
 					sp = strnul(sp) + 1;
@@ -1282,7 +1273,7 @@ varsub(Expand *xp, const char *sp, const char *word,
  * Run the command in $(...) and read its output.
  */
 static int
-comsub(Expand *xp, const char *cp, int fn)
+comsub(Expand *xp, const char *cp)
 {
 	Source *s, *sold;
 	struct op *t;
@@ -1327,14 +1318,11 @@ comsub(Expand *xp, const char *cp, int fn)
 			ksh_dup2(pv[1], 1, false);
 			close(pv[1]);
 		}
-		execute(t, XXCOM | XPIPEO |
-		    (fn == FUNSUB ? XERROK : XFORK), NULL);
+		execute(t, XXCOM | XPIPEO | XFORK, NULL);
 		restfd(1, ofd1);
-		if (fn != FUNSUB) {
-			startlast();
-			/* waitlast() */
-			xp->split = true;
-		}
+		startlast();
+		/* waitlast() */
+		xp->split = true;
 	}
 
 	xp->u.shf = shf;
diff --git a/lex.c b/lex.c
index b3802a4..3f101ce 100644
--- a/lex.c
+++ b/lex.c
@@ -23,7 +23,7 @@
 
 #include "sh.h"
 
-__RCSID("$MirOS: src/bin/mksh/lex.c,v 1.166 2012/07/30 21:37:12 tg Exp $");
+__RCSID("$MirOS: src/bin/mksh/lex.c,v 1.167 2012/08/17 18:34:21 tg Exp $");
 
 /*
  * states while lexing word
@@ -109,7 +109,7 @@ void yyskiputf8bom(void);
 static int backslash_skip;
 static int ignore_backslash_newline;
 static struct sretrace_info *retrace_info;
-int subshell_nesting_type = 0;
+uint8_t subshell_nesting_level = 0;
 
 /* optimised getsc_bn() */
 #define o_getsc()	(*source->str != '\0' && *source->str != '\\' && \
@@ -262,11 +262,6 @@ yylex(int cf)
 	while (!((c = getsc()) == 0 ||
 	    ((state == SBASE || state == SHEREDELIM || state == SHERESTRING) &&
 	    ctype(c, C_LEX1)))) {
-		if (state == SBASE &&
-		    subshell_nesting_type == /*{*/ '}' &&
-		    c == /*{*/ '}')
-			/* possibly end ${ :;} */
-			break;
  accept_nonword:
 		Xcheck(ws, wp);
 		switch (state) {
@@ -400,27 +395,14 @@ yylex(int cf)
 					} else {
 						ungetsc(c);
  subst_command:
-						c = COMSUB;
- subst_command2:
-						sp = yyrecursive(c);
+						sp = yyrecursive();
 						cz = strlen(sp) + 1;
 						XcheckN(ws, wp, cz);
-						*wp++ = c;
+						*wp++ = COMSUB;
 						memcpy(wp, sp, cz);
 						wp += cz;
 					}
 				} else if (c == '{') /*}*/ {
-					c = getsc();
-					if (ctype(c, C_IFSWS)) {
-						/*
-						 * non-subenvironment
-						 * "command" substitution
-						 */
-						c = FUNSUB;
-						goto subst_command2;
-					}
-					ungetsc(c);
-
 					*wp++ = OSUBST;
 					*wp++ = '{'; /*}*/
 					wp = get_brace_var(&ws, wp);
@@ -1189,7 +1171,7 @@ readhere(struct ioword *iop)
 		/* end of here document marker, what to do? */
 		switch (c) {
 		case /*(*/ ')':
-			if (!subshell_nesting_type)
+			if (!subshell_nesting_level)
 				/*-
 				 * not allowed outside $(...) or (...)
 				 * => mismatch
diff --git a/mksh.1 b/mksh.1
index c3b0461..0f9353b 100644
--- a/mksh.1
+++ b/mksh.1
@@ -1,4 +1,4 @@
-.\" $MirOS: src/bin/mksh/mksh.1,v 1.292 2012/08/03 18:34:31 tg Exp $
+.\" $MirOS: src/bin/mksh/mksh.1,v 1.293 2012/08/17 18:34:22 tg Exp $
 .\" $OpenBSD: ksh.1,v 1.144 2012/07/08 08:13:20 guenther Exp $
 .\"-
 .\" Copyright © 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009,
@@ -74,7 +74,7 @@
 .\" with -mandoc, it might implement .Mx itself, but we want to
 .\" use our own definition. And .Dd must come *first*, always.
 .\"
-.Dd $Mdocdate: August 3 2012 $
+.Dd $Mdocdate: August 17 2012 $
 .\"
 .\" Check which macro package we use, and do other -mdoc setup.
 .\"
@@ -1146,14 +1146,9 @@ command substitutions take the form
 .Pf $( Ns Ar command Ns \&)
 or (deprecated)
 .Pf \` Ns Ar command Ns \`
-or (executed in the current environment)
-.Pf ${\ \& Ar command Ns \&;}
 and strip trailing newlines;
 and arithmetic substitutions take the form
 .Pf $(( Ns Ar expression Ns )) .
-Parsing the current-environment command substitution requires a space,
-tab or newline after the opening brace and that the closing brace be
-recognised as a keyword (i.e. is preceded by a newline or semicolon).
 .Pp
 If a substitution appears outside of double quotes, the results of the
 substitution are generally subject to word or field splitting according to
@@ -1231,8 +1226,6 @@ A command substitution is replaced by the output generated by the specified
 command which is run in a subshell.
 For
 .Pf $( Ns Ar command Ns \&)
-and
-.Pf ${\ \& Ar command Ns \&;}
 substitutions, normal quoting rules are used when
 .Ar command
 is parsed; however, for the deprecated
diff --git a/sh.h b/sh.h
index 26d1d6e..efa9de4 100644
--- a/sh.h
+++ b/sh.h
@@ -157,9 +157,9 @@
 #endif
 
 #ifdef EXTERN
-__RCSID("$MirOS: src/bin/mksh/sh.h,v 1.577 2012/08/03 18:45:32 tg Exp $");
+__RCSID("$MirOS: src/bin/mksh/sh.h,v 1.578 2012/08/17 18:34:24 tg Exp $");
 #endif
-#define MKSH_VERSION "R40 2012/08/03"
+#define MKSH_VERSION "R40 2012/08/17"
 
 /* arithmetic types: C implementation */
 #if !HAVE_CAN_INTTYPES
@@ -1283,7 +1283,6 @@ struct op {
 #define SPAT	10	/* separate pattern: | */
 #define CPAT	11	/* close pattern: ) */
 #define ADELIM	12	/* arbitrary delimiter: ${foo:2:3} ${foo/bar/baz} */
-#define FUNSUB	14	/* ${ foo;} substitution (NUL terminated) */
 
 /*
  * IO redirection
@@ -1906,7 +1905,7 @@ ssize_t shf_vfprintf(struct shf *, const char *, va_list)
 void initkeywords(void);
 struct op *compile(Source *, bool);
 bool parse_usec(const char *, struct timeval *);
-char *yyrecursive(int);
+char *yyrecursive(void);
 /* tree.c */
 void fptreef(struct shf *, int, const char *, ...);
 char *snptreef(char *, ssize_t, const char *, ...);
diff --git a/syn.c b/syn.c
index 2a377d0..a14b0bc 100644
--- a/syn.c
+++ b/syn.c
@@ -23,11 +23,12 @@
 
 #include "sh.h"
 
-__RCSID("$MirOS: src/bin/mksh/syn.c,v 1.79 2012/07/30 21:37:16 tg Exp $");
+__RCSID("$MirOS: src/bin/mksh/syn.c,v 1.80 2012/08/17 18:34:25 tg Exp $");
 
-extern int subshell_nesting_type;
 extern void yyskiputf8bom(void);
 
+extern uint8_t subshell_nesting_level;
+
 struct nesting_state {
 	int start_token;	/* token than began nesting (eg, FOR) */
 	int start_line;		/* line nesting began on */
@@ -363,15 +364,12 @@ get_command(int cf)
  Leave:
 		break;
 
-	case '(': /*)*/ {
-		int subshell_nesting_type_saved;
+	case '(': /*)*/
  Subshell:
-		subshell_nesting_type_saved = subshell_nesting_type;
-		subshell_nesting_type = ')';
+		++subshell_nesting_level;
 		t = nested(TPAREN, '(', ')');
-		subshell_nesting_type = subshell_nesting_type_saved;
+		--subshell_nesting_level;
 		break;
-	    }
 
 	case '{': /*}*/
 		t = nested(TBRACE, '{', '}');
@@ -1118,29 +1116,16 @@ parse_usec(const char *s, struct timeval *tv)
  * a COMSUB recursively using the main shell parser and lexer
  */
 char *
-yyrecursive(int subtype)
+yyrecursive(void)
 {
 	struct op *t;
 	char *cp;
 	bool old_reject;
-	int old_symbol, old_salias, old_nesting_type;
+	int old_symbol, old_salias;
 	struct ioword **old_herep;
-	int stok, etok;
-
-	switch (subtype) {
-	case FUNSUB:
-		stok = '{';
-		etok = '}';
-		break;
-	case COMSUB:
-	default:
-		stok = '(';
-		etok = ')';
-	}
 
 	/* tell the lexer to accept a closing parenthesis as EOD */
-	old_nesting_type = subshell_nesting_type;
-	subshell_nesting_type = etok;
+	++subshell_nesting_level;
 
 	/* push reject state, parse recursively, pop reject state */
 	old_reject = reject;
@@ -1150,7 +1135,7 @@ yyrecursive(int subtype)
 	old_salias = sALIAS;
 	sALIAS = 0;
 	/* we use TPAREN as a helper container here */
-	t = nested(TPAREN, stok, etok);
+	t = nested(TPAREN, '(', ')');
 	sALIAS = old_salias;
 	herep = old_herep;
 	reject = old_reject;
@@ -1160,6 +1145,6 @@ yyrecursive(int subtype)
 	cp = snptreef(NULL, 0, "%T", t->left);
 	tfree(t, ATEMP);
 
-	subshell_nesting_type = old_nesting_type;
+	--subshell_nesting_level;
 	return (cp);
 }
diff --git a/tree.c b/tree.c
index d2e20b3..678f530 100644
--- a/tree.c
+++ b/tree.c
@@ -23,7 +23,7 @@
 
 #include "sh.h"
 
-__RCSID("$MirOS: src/bin/mksh/tree.c,v 1.63 2012/07/30 21:37:17 tg Exp $");
+__RCSID("$MirOS: src/bin/mksh/tree.c,v 1.64 2012/08/17 18:34:25 tg Exp $");
 
 #define INDENT	8
 
@@ -342,10 +342,6 @@ wdvarput(struct shf *shf, const char *wp, int quotelevel, int opmode)
 				shf_putc(c, shf);
 			shf_puts(cs, shf);
 			break;
-		case FUNSUB:
-			shf_puts("${ ", shf);
-			cs = ";}";
-			goto pSUB;
 		case EXPRSUB:
 			shf_puts("$((", shf);
 			cs = "))";
@@ -585,7 +581,6 @@ wdscan(const char *wp, int c)
 			wp++;
 			break;
 		case COMSUB:
-		case FUNSUB:
 		case EXPRSUB:
 			while (*wp++ != 0)
 				;
@@ -825,9 +820,6 @@ dumpwdvar_i(struct shf *shf, const char *wp, int quotelevel)
  closeandout:
 			shf_putc('>', shf);
 			break;
-		case FUNSUB:
-			shf_puts("FUNSUB<", shf);
-			goto dumpsub;
 		case EXPRSUB:
 			shf_puts("EXPRSUB<", shf);
 			goto dumpsub;