It's not a bug it's a feature.
Version 1.60 + uses a modified abilities.txt file (found in the SE4Modder directory) that adds a line spediciying what it can be used for. It's intended to make things easier for rookies. You can turn this feature off by unchecking "Filter Abilities" in the file menu. You will have to then click your mod from the file menu to force the program to reaload the ability lists.
It is also quite likely that my modifiyed abilities txt file has a few errors in it regarding what an ability can be used for. (such as the case you mentioned)
[ January 12, 2003, 13:23: Message edited by: DavidG ]