Bug 11911

With 2.0.7, the standard unix setgid mode behavor
was lost.  Samba does mkdir() and chmod(), while all
previous versions uses mkdir() only:

/*******************************************************************
 Mkdir() that calls dos_to_unix.
 Cope with UNIXes that don't allow high order mode bits on mkdir.
 Patch from gcarter.
********************************************************************/

int dos_mkdir(char *dname,mode_t mode)
{
  int ret = mkdir(dos_to_unix(dname,False),mode);
  if(!ret)                               <<<<
    return(dos_chmod(dname,mode));       <<<<
  else                                   <<<<
    return ret;
}

Should remove marked lines from lib/doscalls.c.

I know about "inherit permissions" -- this is a dangerous
parameter.