tex parsing error in auctex

Shot with example.
I'm using emacs-snapshot from hardy repository.

confirming bug, needs forwarding upstream

This bug was fixed in the package auctex - 11.85-1ubuntu1

---------------
auctex (11.85-1ubuntu1) lucid; urgency=low

  * Merge from debian/squeeze. remaining changes:
    - Follow Ubuntu Maintainer spec.
    - use xdg-open instead of hard-coded xpdf, LP: #379874
    - use firefox instead of hard-coded 'mozilla'
  * drop dependency on texlive-base-bin. It was included for lp #148469, but
    the current maintainer scripts no longer seem to use it.
  * recommend xdg-utils instead of xdg-open, LP: #442467
  * new upstream version fixes:
     - "Preview of doc that includes PDF". LP: #439463
       Closed based on information from bug submitter
     - Some parsing defects. LP: #240135
       At least the shown example does not show the defect anmore

auctex (11.85-1) unstable; urgency=low

  * New upstream release. (Closes: #482956)
  * control (Standards-Version): 3.8.3
  * control (auctex/Depends): Add "dpkg (>= 1.15.4) | install-info" as per
    3.8.3 standards.
  * COPYRIGHT, copyright.in: Update (GPL v3).
  * variables (INFOSEC, AUCTEX_INFOMENU, AUCTEX_INFODESC,
    PREVIEW_INFOMENU, PREVIEW_INFODESC, DINSTALL, DREMOVE, IINSTALL,
    IREMOVE): Remove.
  * auctex/postinst.in, auctex/prerm.in: Do not call "install-info"
    anymore.
  * auctex/postinst.in, auctex/prerm.in, preview-latex-style/postinst.in,
    preview-latex-style/prerm.in: Do not call "install-docs" anymore.
  * auctex/NEWS: Rename from "NEWS.in"; update to Debian changelog style.
  * rules.in (DFILES): Remove "NEWS".
  * rules.in (binary-indep-auctex): Add "docdir" setting.

auctex (11.83-8) unstable; urgency=medium

  * COPYRIGHT, copyright.in, variables: Update copyright.
  * control (Homepage): New field.
  * control (Standards-Version): Updated to 3.8.2.
  * control (auctex/Description): Reflow text.
  * control (preview-latex-style/Description): Fix typo (unpublished
    change obsoleted by 11.83-7.1 NMU); thanks to Rafael Laboissiere.
    (Closes: #440397)
  * control (preview-latex-style/Homepage): New field.
  * po/cs.po, po/de.po, po/es.po, po/eu.po, po/fi.po, po/fr.po, po/gl.po,
    po/it.po, po/ja.po, po/nl.po, po/pt.po, po/pt_BR.po, po/ru.po,
    po/sv.po, po/vi.po: Normalized.
  * po/it.po: Updated.
  * auctex/templates.in: Reflow text. Keep debian-l10n-english team
    review comment from flowing to "auctex/templates".

  * control, rules.in (binary-indep-auctex), auctex/bug.script.in (FLAVORS),
    auctex/conffiles.in, auctex/install.in, auctex/remove.in,
    auctex/update-auctex-elisp.in (FLAVORS),
    auctex/update-auctex-install.in (FLAVORS): Add Emacs 23 support.
    (Closes: #539749, #540093)

  * config.in: No more need to register "doauto/logfile" here.
  * install.in (do_auto): Do not remove log files here. New log files
    names.
  * remove.in (undo_auto): Remove log files here. New log files names.
    (Closes: #508348)
  * update-auctex-install: New log files names.
  * variables (TMPMASK): Remove it.
  * variables (LOGFILE): New variable.

  * install.in (do_install): For each flavor, for every byte compiled
    file, install a symlink to the corresponding Elisp source from the
    installation directory to the source directories, for the sol...