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F# compiler bug in release mode in VS2015 Update 1 #759

Description

In F# compound loops where the sequences are defined locally, in release mode only, F# generates a compile-time error saying that the name of the sequence being looped over is not found, generating error FS0971: Undefined value. Bizarrely this seems to be the case only when the outer loop is over the elements of a set.
I am using Visual Studio 2015 Update 1 RTM - 14.0.24720.00

I have managed to repro this in a few simple lines of code. Please see below.

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