Bug in CG Tools 7.3.4

I found a problem using our code in combination with CG Tools 7.3.4. The program is running on a C6455 DSP.

This is an example:

#include <string.h>
#include <ctype.h>

void test(const char *pText, char *pTextOut)
{
    static char BadChars[] = "*?<>|\"+=,:;\\[]";
    int i, j;

    memset(pTextOut, ' ', 20);

    i = j = 0;
    while (pText[i] != '.')
    {
        if ((strchr(BadChars, pText[i]) == 0) && (pText[i]>=' '))
        {
            pTextOut[j] = toupper(pText[i]);
            j++;
        }
        i++;
    }

    j = 0;
    i++;
    while ((pText[i] != '\0') && (j<3))
    {
        if ((strchr(BadChars, pText[i]) == 0) && (pText[i]>=' '))
        {
            pTextOut[j+8] = toupper(pText[i]);
            j++;
        }
        i++;
    }

    pTextOut[11] = '\0';
}

int main(void)
{
    char textOut[20];

    test("abc.def", textOut);
    printf("%s\n", textOut);

}

The console output with -O2 is "ABC     def". Without optimization I get "ABC     DEF" like expected. Compiler version 7.2.x an earlier seem not to be affected.
Compiler options used: -mv64+ -g -O2

Ralf