>I did not know this was a know problem. Let me see if I understand.

Solution 1
sele Alias2
replace Alias2.fieldname with somevalue
Solution 2
replace Alias2.fieldname with somevalue in Alias2

I'm not sure about the internals. Most likely VFP does an implicit select alias2 and then the replace when the IN clause is used. It then changes the workarea back to the previous state. This would be similar to the functionality of the NEWOBJECT() function. It performs an implicit SET CLASSLIB TO before the object is created so you don't have to. It then resets the CLASSLIB path to the previous state.

FWIW, you do not need to specify the alias.fieldname when you use the IN clause.