What exactly is “broken” with Microsoft Visual C++’s two-phase template instantiation?

I’ll just copy an example from my “notebook”

int foo(void*);

template<typename T> struct S {
  S() { int i = foo(0); }
  // A standard-compliant compiler is supposed to 
  // resolve the 'foo(0)' call here (i.e. early) and 
  // bind it to 'foo(void*)'
};

void foo(int);

int main() {
  S<int> s;
  // VS2005 will resolve the 'foo(0)' call here (i.e. 
  // late, during instantiation of 'S::S()') and
  // bind it to 'foo(int)', reporting an error in the 
  // initialization of 'i'
}

The above code is supposed to compile in a standard C++ compiler. However, MSVC (2005 as well as 2010 Express) will report an error because of incorrect implementation of two-phase lookup.

---

And if you look closer, the issue is actually two-layered. At the surface, it is the obvious fact that Microsoft’s compiler fails to perform early (first phase) lookup for a non-dependent expression foo(0). But what it does after that does not really behave as a proper implementation of the second lookup phase.

The language specification clearly states that during the second lookup phase only ADL-nominated namespaces get extended with additional declarations accumulated between the point of definition and point of instantiation. Meanwhile, non-ADL lookup (i.e. ordinary unqualified name lookup) is not extended by the second phase – it still sees those and only those declarations that were visible at the first phase.

That means that in the above example the compiler is not supposed to see void foo(int) at the second phase either. In other words, the MSVC’s behavior cannot be described by a mere “MSVC postpones all lookup till the second phase”. What MSVC implements is not a proper implementation of the second phase either.

To better illustrate the issue, consider the following example

namespace N {
  struct S {};
}

void bar(void *) {}

template <typename T> void foo(T *t) {
  bar(t);
}

void bar(N::S *s) {}

int main() {
  N::S s;
  foo(&s);
}

Note that even though bar(t) call inside the template definition is a dependent expression resolved at the second lookup phase, it should still resolve to void bar(void *). In this case ADL does not help the compiler to find void bar(N::S *s), while the regular unqualified lookup is not supposed to get “extended” by the second phase and thus is not supposed to see void bar(N::S *s) either.

Yet, Microsoft’s compiler resolves the call to void bar(N::S *s). This is incorrect.

The problem is still present in its original glory in VS2015.