Index: model/org/eclipse/jdt/internal/core/PackageFragmentRoot.java
===================================================================
RCS file: /data/cvs/eclipse/org.eclipse.jdt.core/model/org/eclipse/jdt/internal/core/PackageFragmentRoot.java,v
retrieving revision 1.100
diff -u -r1.100 PackageFragmentRoot.java
--- model/org/eclipse/jdt/internal/core/PackageFragmentRoot.java	28 May 2004 09:05:30 -0000	1.100
+++ model/org/eclipse/jdt/internal/core/PackageFragmentRoot.java	3 Jun 2004 21:36:14 -0000
@@ -246,20 +246,19 @@
 			switch(member.getType()) {
 			    
 			    case IResource.FOLDER:
+			        // recurse into sub folders even even parent not included as a sub folder could be included
+			        // (see https://bugs.eclipse.org/bugs/show_bug.cgi?id=65637)
 					if (Util.isValidFolderNameForPackage(memberName)) {
-					    boolean isMemberIncluded = !Util.isExcluded(member, inclusionPatterns, exclusionPatterns);
-						// keep looking inside as long as included already, or may have child included due to inclusion patterns
-					    if (isMemberIncluded || inclusionPatterns != null) { 
-							// eliminate binary output only if nested inside direct subfolders
-							if (javaProject.contains(member)) {
-								String newPrefix;
-								if (prefix.length() == 0) {
-									newPrefix = memberName;
-								} else {
-									newPrefix = prefix + "." + memberName; //$NON-NLS-1$
-								}
-								computeFolderChildren((IFolder) member, isMemberIncluded, newPrefix, vChildren, inclusionPatterns, exclusionPatterns);
+						// eliminate binary output only if nested inside direct subfolders
+						if (javaProject.contains(member)) {
+							String newPrefix;
+							if (prefix.length() == 0) {
+								newPrefix = memberName;
+							} else {
+								newPrefix = prefix + "." + memberName; //$NON-NLS-1$
 							}
+						    boolean isMemberIncluded = !Util.isExcluded(member, inclusionPatterns, exclusionPatterns);
+							computeFolderChildren((IFolder) member, isMemberIncluded, newPrefix, vChildren, inclusionPatterns, exclusionPatterns);
 						}
 					}
 			    	break;