Intellisense issues when two dependencies of different types on same lib

Since the beginning of the 7.0 EAP I have seen numerous cases where Intellisense goes haywire and starts red underlining valid code all over the place.

A specific case involves a Project with 2 modules, we'll call one the Environment Module and the other the Plugin Module. The Plugin Module depends on the Environment Module. Both are currently under development and unstable but both compile fine with Ant.

Yesterday I discovered that if the Plugin Module has two dependencies on the Environment Module, one as a Project Library Dependency and the other as a Module Dependency, it actually caused the Environment Module to no longer work correctly with Intellisense. When I removed the Project Library Dependency Intellisense began to work again.

Note that this phenomenon was occurring in the Module being ADDED as a Dependency of the other, not the Module I was adding the Dependency to. How can being a dependency of another module cause a Module to no longer work with Intellisense? Am I doing something wrong or is this a bug?

This behavior of IDEA has happened to me many many times with apparently different causes. Am I missing something fundamental with respect to how dependencies work (in IDEA and/or Java itself)?