Saw it the first time ;) line 6904 of portage.py from trunk- os.path.normpath(settings["PORTDIR"]+"///profiles/updates")
Would have to be modified to handle PORTDIR_OVERLAY scanning also. Personally, not sure if I want this in portage yet since imo, updates should only affect pkgs built from that repo- if it's added now, that's not going to be the case...
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