The `_is_executable' library function doesn't upcase the extension of
its argument filename, so it fails to recognize executable files which
are only characterized by certain extensions, like .com and .bat (as
opposed to .exe which also have a magic signature MZ at the beginning).

Apply this patch:
*** posix/sys/stat/is_exec.c~0  Sun Nov 12 23:22:48 1995
--- posix/sys/stat/is_exec.c    Sat Apr  6 13:09:48 1996
***************
*** 18,23 ****
--- 18,24 ----
  #include <libc/stubs.h>
  #include <stdio.h>
  #include <string.h>
+ #include <ctype.h>
  #include <errno.h>
  #include <dpmi.h>
  #include <go32.h>
***************
*** 182,192 ****
        && strlen(extension) <= ((extension[0]=='.') ? 4 : 3))
      {
        /* Search the list of extensions in executables[]. */
!       char tmp_buf[6];

!       tmp_buf[0] = '|';
!       strcpy(tmp_buf+1, *extension == '.' ? extension + 1 : extension);
!       strcat(tmp_buf, "|");
        if (strstr(non_executables, tmp_buf))
          return 0;
        else if (strstr(executables, tmp_buf))
--- 183,197 ----
        && strlen(extension) <= ((extension[0]=='.') ? 4 : 3))
      {
        /* Search the list of extensions in executables[]. */
!       char tmp_buf[6], *tp = tmp_buf;

!       *tp++ = '|';
!       if (*extension == '.')
!       extension++;
!       while (*extension)
!       *tp++ = toupper (*extension++);
!       *tp++ = '|';
!       *tp = '\0';
        if (strstr(non_executables, tmp_buf))
          return 0;
        else if (strstr(executables, tmp_buf))

My pet peeve: the use of toupper() on file names is likely to
cause problems if someone implements locale settings because
in that setting a file name with accented letters might lose
the accents when upcased.

Moreover, "file" and "FILE" are identical as file names while
"fil'e" and "FIL'E" are not.  (You know what I mean.)