bad membership finder should remove invalid circular references from composites

From Joel,

Should circular group membership references work when the complementary member groups are composites made from the "container" groups? I.e.
container groups are A and B
Aa is a composite of (A intersect group Z)
Bb is a composite of (B intersect group Z)
A has members D,E, and Bb.
B has members F,G, Aa.
What we are seeing is if you remove say D from A as a direct member, D still shows up as an indirect member of both A and B even though it has no direct membership in A or B. The findBadMemberships job doesn't seem to fix this either.
Any recommendations on what to do to fix the reference?