VertexColor and TextureFlag 4

I've come across some very strange behaviour of VertexColor mixed with LoadTexture Flag=4.

Try the listing below(needs any texture1.jpg and texture2.jpg in your directory). The program will create a series of quads with different alpha (set via Vertexcolor) and a sphere on top.

Now switch the texture1.jpg flag to 4, and all quads with alpha <0.5 disappear! You can make them "re-appear" by either removing the vertexcolor command, or by making the texture2.jpg flag equal to 1.

So is this a bug or known feature? Not allowing two textures with texture flag 4 when using vertexcolor?

I'm a little stumped. I'm running 1.91, and I tried this on two different computers (one with an ATI, one with onboard video).

Graphics3D 800,600
SetBuffer BackBuffer()
Global camera
camera=CreateCamera()

AmbientLight 255,255,255


; change this from to ("texture1",4) and the plane disappears
; for all alpha values <.5
tex2=LoadTexture("texture1.jpg",1) 

s=CreateSphere()
TranslateEntity s,0,0,5
EntityTexture s,tex2


Mesh=CreateMesh()
surface=CreateSurface(Mesh)

EntityFX Mesh,35
tex=LoadTexture("texture2.jpg",4)
EntityTexture Mesh,tex


Repeat

	n=0
	ClearSurface surface
	For i=-3 To 2
		For j=-3 To 2
			
			; make little squares (no texture coordinates - makes no diff)
			AddVertex(surface,i,j,5)
			AddVertex(surface,i+1,j,5)
			AddVertex(surface,i,j+1,5)
			AddVertex(surface,i+1,j+1,5)
			
			
			
			AddTriangle(surface,n*4,n*4+2,n*4+1)
			AddTriangle(surface,n*4+1,n*4+2,n*4+3)
	
	
			; remove these three lines and the plane will show up even if 
			; the above texture is loaded with flag=4
			; So somehow the combination of using VertexColor and TextureFlag 4 doesn't work
			For k=0 To 3
				VertexColor surface,n*4+k,255,255,255,Float(n)*0.04
			Next
			
	
			n=n+1
			
	
		Next
	Next

	UpdateNormals Mesh


	UpdateWorld
	RenderWorld
	Flip
Until KeyDown(1)
End

The forth parameter of VertexColor is VertexAlpha.
Some machines have Problems when mixing Mask mode and Alpha mode. Read the versions.txt, there's a note about the reimplmentation of the ability to mix them. Some cards may however make troubles, probably that's the problem.