diff --git a/lerna.json b/lerna.json
index 93a2dc0ec..d190800cd 100644
--- a/lerna.json
+++ b/lerna.json
@@ -3,5 +3,5 @@
     "packages/*"
   ],
   "npmClient": "npm",
-  "version": "3.12.1"
+  "version": "3.12.2"
 }
diff --git a/packages/less/Gruntfile.js b/packages/less/Gruntfile.js
index 8d30d93a7..bf967b102 100644
--- a/packages/less/Gruntfile.js
+++ b/packages/less/Gruntfile.js
@@ -251,6 +251,7 @@ module.exports = function(grunt) {
                 command: [
                     // @TODO: make this more thorough
                     // CURRENT OPTIONS
+                    `node bin/lessc --ie-compat ${lessFolder}/_main/lazy-eval.less tmp/lazy-eval.css`,
                     // --math
                     `node bin/lessc --math=always ${lessFolder}/_main/lazy-eval.less tmp/lazy-eval.css`,
                     `node bin/lessc --math=parens-division ${lessFolder}/_main/lazy-eval.less tmp/lazy-eval.css`,
diff --git a/packages/less/bin/lessc b/packages/less/bin/lessc
index 82420826b..18599a728 100755
--- a/packages/less/bin/lessc
+++ b/packages/less/bin/lessc
@@ -516,6 +516,10 @@ function processPluginQueue() {
         }
 
         break;
+      
+      case 'ie-compat':
+        console.warn('The --ie-compat option is deprecated, as it has no effect on compilation.');
+        break;
 
       case 'relative-urls':
         console.warn('The --relative-urls option has been deprecated. Use --rewrite-urls=all.');
diff --git a/packages/less/src/less/functions/list.js b/packages/less/src/less/functions/list.js
index 71e5e5c56..1463a5232 100644
--- a/packages/less/src/less/functions/list.js
+++ b/packages/less/src/less/functions/list.js
@@ -1,4 +1,5 @@
 import Comment from '../tree/comment';
+import Node from '../tree/node';
 import Dimension from '../tree/dimension';
 import Declaration from '../tree/declaration';
 import Expression from '../tree/expression';
@@ -65,20 +66,27 @@ export default {
         let newRules;
         let iterator;
 
+        const tryEval = val => {
+            if (val instanceof Node) {
+                return val.eval(this.context);
+            }
+            return val;
+        };
+
         if (list.value && !(list instanceof Quote)) {
             if (Array.isArray(list.value)) {
-                iterator = list.value;
+                iterator = list.value.map(tryEval);
             } else {
-                iterator = [list.value];
+                iterator = [tryEval(list.value)];
             }
         } else if (list.ruleset) {
-            iterator = list.ruleset.rules;
+            iterator = tryEval(list.ruleset).rules;
         } else if (list.rules) {
-            iterator = list.rules;
+            iterator = list.rules.map(tryEval);
         } else if (Array.isArray(list)) {
-            iterator = list;
+            iterator = list.map(tryEval);
         } else {
-            iterator = [list];
+            iterator = [tryEval(list)];
         }
 
         let valueName = '@value';
diff --git a/packages/test-data/css/namespacing/namespacing-8.css b/packages/test-data/css/namespacing/namespacing-8.css
new file mode 100644
index 000000000..a68bb76ae
--- /dev/null
+++ b/packages/test-data/css/namespacing/namespacing-8.css
@@ -0,0 +1,10 @@
+:root {
+  --background-color: black;
+  --color: #fff;
+}
+div {
+  display: inline-block;
+  padding: 1rem;
+  background-color: var(--background-color);
+  color: var(--color);
+}
diff --git a/packages/test-data/less/namespacing/namespacing-8.less b/packages/test-data/less/namespacing/namespacing-8.less
new file mode 100644
index 000000000..e73835c6b
--- /dev/null
+++ b/packages/test-data/less/namespacing/namespacing-8.less
@@ -0,0 +1,31 @@
+// see: https://github.com/less/less.js/issues/3368
+@vars: {
+  background-color: black;
+  color: contrast($background-color, #000, #fff);
+}
+  
+:root {
+  each(@vars, {
+    --@{key}: @value;
+  });
+}
+
+div {
+  display: inline-block;
+  padding: 1rem;
+  background-color: var(--background-color);
+  color: var(--color);
+}
+
+// see: https://github.com/less/less.js/issues/3339
+// still fails - move to 4.0
+// @components: {
+//   columns: true;
+//   ratios: false;
+// };
+
+// each(@components, {
+//   & when (@value = true) {
+//       @import (optional) "components/@{key}.less";
+//   }
+// });
\ No newline at end of file