I have a directory on my PATH that contains a subdirectory named "gcc".  When I run "gcc" (not fully-qualified) I get all sorts of very bizarre behavior.  For example:

$ cat t.c
#include <limits.h>

$ mkdir gcc

$ PATH=.:$PATH gcc -E t.c >/dev/null
In file included from /tmp/t.c:1:
/usr/include/limits.h:125:26: error: no include path in which to search for limits.h

But, if I don't have a local directory "gcc" then all is fine:

$ rmdir gcc
$ PATH=.:$PATH gcc -E t.c >/dev/null
$

If I use a fully-qualified path for GCC (/usr/bin/gcc) then it also does not fail.

It looks to me like the test GCC performs when looking for itself through PATH just checks for executability (if I have a non-executable file in a directory on PATH this doesn't happen) but doesn't check for directory-ness.  This is wrong, because the shell's PATH search algorithm DOES check for directory-ness and skips directories that appear in directories on your PATH.