The top-level scope isn't handled right, so we fall through during lexical search and never get to hierarchical search below.
system ~/projects/jruby $ jruby -X+C -e "module Foo; Symbol = 1; end; class Bar; include Foo; def sym; Symbol; end; end; p Bar.new.sym"
Symbol
system ~/projects/jruby $ jruby -X-C -e "module Foo; Symbol = 1; end; class Bar; include Foo; def sym; Symbol; end; end; p Bar.new.sym"
1