For the record

[KMP at MIT-MC (Kent M. Pitman)]

The behavior of *FUNCTION with a second arg seems to be compatible with
an upward funarg type of behavior -- in XLISP, of course, where things
are working. Note that SETQ'ing a variable that is in the closure affects
only that copy of the closure, and not the variable on the stack of which
it is a copy -- this is IFF a second arg was given. If the second arg is
given, the funarg is downward only and SETQ's will assign to the variable
in the actual environ in which the closure was created. I don't know if
this is how things ought to be, but this is how I will document it until/-
unless I get word that someone is changing this behavior.