ArcMap 10: Definition query not working on a layer with joins

It seems this was a defect on previous versions of ArcMap, but I recently came across it in ArcMap 10. I am not an ArcMap 10 expert, but I am pretty sure I set it up correctly.

A possible workaround is doing this in a different order: creating a definition query and then setting up the joins. This may work for most scenarios, except when the definition query is dependent on the joined data.