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as mentioned by Simon PJ in this thread:

http://www.haskell.org/pipermail/haskell/2008-June/020436.html

here is the example, spelled out:

module B0 where
class C a where c :: a -> String
data T = T deriving Show

module B1 where
import B0
instance C T where c _ = "B1"
b = c T

module B2 where
import B0
instance C T where c _ = "B2"
b = c T

module Main where
import B1
import B2
main = print (B1.b,B2.b)

this is accepted without flags or errors and prints ("B1","B2").

the language report, section 4.3.2 clearly states:

A type may not be declared as an instance of a particular class more than once in the program.

Trac metadata

Trac field	Value
Version	6.8.2
Type	Bug
TypeOfFailure	OtherFailure
Priority	normal
Resolution	Unresolved
Component	Compiler
Test case
Differential revisions
BlockedBy
Related
Blocking
CC
Operating system	Unknown
Architecture	Unknown