IFS=$'\001'
c=$'\001'
c2=$'\003'

IFS=$c		# this is the problem line, IFS should end up being \001
recho "$IFS"
set -- $c2$c$c2$c$c2
recho $# "$1" "$2" "$3"

x=$c
recho "$x"

unset c c2 x

c=$'Y\1Y';

v=X${c}X;
recho X${c}X
recho "$v"

v=X$c
recho X$c
recho "$v"