No probs.
Actually it was never safe to use three part set in quirky update.
If your read BoL abnout UPDATE you will find that:
Setting Variables and Columns
Variable names can be used in UPDATE statements to show the old and new values affected, but this should be used only when the UPDATE statement affects a single record. If the UPDATE statement affects multiple records, to return the old and new values for each record, use the OUTPUT clause.
http://msdn.microsoft.com/en-us/library/ms177523(v=sql.90).aspx
Unfortunately, explicit explanation of the above behaviour/restriction was removed from BoL for SQL2008 and above, but this behaviour/restriction is still in place.
So, as you can see it's quite expected that it will not work for quirky update.
I never used "three-part" SET in quirky update myself due to the simple reason: Quirky update method is older than "three part" SET" feature of SQL Server (I think it was introduced in SQL2K), so I always used two set lines with standard two-parts set's.