custom_url_rewrite_outbound() function error

In the "Administer > Site configuration > Subdomain settings" page there are errors that can be announced to the user. On of them is:

Drupal's URL function - show/hide details	Not working yet
Drupal API: url('~subdomain-test/subdomain/test') returned 'http://subdomain-test.hiddencastle.xcom/index.php?q=subdomain/test' but should have returned 'http://subdomain-test.hiddencastle.xcom/subdomain/test'

The custom_url_rewrite_outbound() function in settings.php is rewriting subdomains incorrectly. Did you patch settings.php? See readme.txt for instructions.

But I have found a missing patch is not the only cause for this error. In my case I found that not having Clean URLs enabled can also cause this error. It would have been convenient for me had this error message included this among possible causes. I had to step through execution to find this out.