What's odd about it? The behavior should be that the unambiguous part
at the left is completed, and then the cursor stops at the first
ambiguous point. For example, if I do:
% ls /u/l/b<TAB>
I get, with cursor after the "l" (over the third "/"):
% ls /usr/l/b
If I hit TAB again:
% ls /usr/l/b
libexec/ local/
When does this fail for you?
Q1) where is the doc for this?
Under the entry for _path_files.
Has something in my setup overloaded this?
No way for us to tell. Have you tried using the ctrl+x question-mark
binding to get a completion traceback?