note, the trailing parentheses that appears in my reproduce code after the safe_mode_include_dir is *not* present in php.ini, it was a typo.

get_cfg_var() and ini_get() both return the correct safe_mode_include_dir, but it seems to just be ignored. Just for good measure, I also tried using a different directory altogether, but got the same results.

This bug does not seem to affect require_once(), require(), or include(), which are still able to access the file from a different UID (as long as safe_mode_include_dir is set as it should be). However, other file operations such as file_exists and fopen fail. In the example below, note that the include() succeeds because the output does say "this is the test file"

====
CODE
====
//
// safe_mode_include_dir is /home/php_include_test
// 
// the file /home/php_include_test/test 
// simply says "this is the test file<br />"

$test_file = '/home/php_include_test/test';

include($test_file);

if ( file_exists($test_file) ) {
        echo 'Test file exists.<br />';
}
else {
        echo 'Test file does not exist<br />';
}

if ( is_readable($test_file) ) {
        echo 'Test file is readable.<br />';
}
else {
        echo 'Test file not readable<br />';
}

if ( $fp = fopen($test_file, 'r') ) {
        echo 'Test file opened for read.<br />';
        fclose($fp);
}
else {
        echo 'Test file could not be opened for read<br />';
}

=======
OUTPUT
=======
this is the test file
Test file does not exist
Test file not readable

Warning: fopen() [function.fopen]: SAFE MODE Restriction in effect. The script whose uid is 1010 is not allowed to access /home/php_include_test/test owned by uid 0 in /home/www/jim/public_html/jimtest.php on line 21

Warning: fopen(/home/php_include_test/test) [function.fopen]: failed to open stream: Inappropriate ioctl for device in /home/www/jim/public_html/jimtest.php on line 21
Test file could not be opened for read

The ini directive is called safe_mode_*INCLUDE*_dir.
Please read what it's used for: http://www.php.net/manual/en/features.safe-mode.php

file_exists() had previously worked for me in safe mode, most likely because I was using PHP 5.1.4, which was subject to bug #37987 (invalid return of file_exists() in safe mode). My apologies for the bogus bug, but you can understand my confusion.