Ksh regression on function return

Issue

• There is a regression with the following Korn Shell code:

#!/bin/ksh

g(){
cat << EOF
$(ls /etc |xargs -i echo "       {}")
EOF
}

for file in $(g)
do
echo $file
done

• The above should return the list of files under /etc. This used to work on RHEL 5.6 but does not work on RHEL 5.9. Also RHEL 6.3and 6.4 seem to be affected.