diff --git a/CHANGES.md b/CHANGES.md
index e5f90c64818..5087b21ee8b 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -37,6 +37,9 @@ Unreleased
 - Do no run ocamldep to for single module executables & libraries. The
   dependency graph for such artifacts is trivial (#3847, @rgrinberg)
 
+- Fix cram tests inside vendored directories not being interpreted correctly.
+  (@rgrinberg, #3860)
+
 2.7.1 (2/09/2020)
 -----------------
 
diff --git a/src/dune_engine/file_tree.ml b/src/dune_engine/file_tree.ml
index 6951a825b38..2c2bb41dc0a 100644
--- a/src/dune_engine/file_tree.ml
+++ b/src/dune_engine/file_tree.ml
@@ -595,7 +595,6 @@ end = struct
           if
             Dune_project.cram parent_dir.project
             && Cram_test.is_cram_suffix basename
-            && status = Normal
           then
             Sub_dirs.Status.Data_only
           else
diff --git a/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/dune-project b/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/dune-project
new file mode 100644
index 00000000000..0636ab6acf4
--- /dev/null
+++ b/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/dune-project
@@ -0,0 +1 @@
+(lang dune 1.11)
diff --git a/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/duniverse/dune b/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/duniverse/dune
new file mode 100644
index 00000000000..ad2ec9467ef
--- /dev/null
+++ b/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/duniverse/dune
@@ -0,0 +1,4 @@
+; This file is generated by duniverse.
+; Be aware that it is likely to be overwritten by your next duniverse pull invocation.
+
+(vendored_dirs *)
diff --git a/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/duniverse/dune-configurator.2.7.1/dune-project b/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/duniverse/dune-configurator.2.7.1/dune-project
new file mode 100644
index 00000000000..e8341c0ea3f
--- /dev/null
+++ b/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/duniverse/dune-configurator.2.7.1/dune-project
@@ -0,0 +1,3 @@
+(lang dune 2.7)
+(name dune)
+(cram enable)
diff --git a/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/duniverse/dune-configurator.2.7.1/test/dialects.t/bad1/dune-project b/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/duniverse/dune-configurator.2.7.1/test/dialects.t/bad1/dune-project
new file mode 100644
index 00000000000..56dbb38b169
--- /dev/null
+++ b/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/duniverse/dune-configurator.2.7.1/test/dialects.t/bad1/dune-project
@@ -0,0 +1,11 @@
+(lang dune 1.11)
+
+(dialect
+ (name d)
+ (implementation (extension foo))
+ (interface (extension bar)))
+
+(dialect
+ (name d)
+ (implementation (extension foo2))
+ (interface (extension bar2)))
diff --git a/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/duniverse/dune-configurator.2.7.1/test/dialects.t/run.t b/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/duniverse/dune-configurator.2.7.1/test/dialects.t/run.t
new file mode 100644
index 00000000000..97af14d8190
--- /dev/null
+++ b/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/duniverse/dune-configurator.2.7.1/test/dialects.t/run.t
@@ -0,0 +1,8 @@
+  $ dune build --root bad1
+  Entering directory 'bad1'
+  File "dune-project", line 9, characters 1-74:
+   9 |  (name d)
+  10 |  (implementation (extension foo2))
+  11 |  (interface (extension bar2)))
+  Error: dialect "d" is already defined
+  [1]
diff --git a/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/run.t b/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/run.t
new file mode 100644
index 00000000000..cc75609f6c5
--- /dev/null
+++ b/test/blackbox-tests/test-cases/mwe-dune-duplicate-dialect.t/run.t
@@ -0,0 +1,4 @@
+This test should demonstrate that cram tests inside the vendor dir have their
+directories marked as data only
+
+  $ dune build