Select current statement vs Table hints

Using table hints (which go hand in hand with WITH in SQL Server) will fool Select current statement into prematurely finishing selection. 'Works' both ways.

From top to bottom until meeting WITH:

From bottom upwards including WITH:

Thank you for reporting this issue. I guess it finds WITH and assumes it's a beginning of CTE statement. I'm going to log this as a defect.

Yes, that must be the case. I recall reading somewhere that CTE's not at the beginning of the batch are required to have their WITH keyword preceded by a semicolon just because of this.

As far as I know, for a top level CTE its first keyword WITH must the be first one in the script or follow GO or ; delimiters.
It's more complicated for nested CTEs