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A bug compatible piece of software is a piece of software that has bugs or glitches in common with a prior version of the software. The idea is that a company has not improved the product to eliminate the bugs.
Bug compatible is also known as bug-for-bug compatible.
Although "bug compatible" might sound like a positive term, because compatibility is typically positive, it is actually a criticism of the software. Companies are supposed to create successive versions that remove and eliminate bugs from a design. When they fail, someone might use the term "bug compatible" to criticize the lack of improvement in development.
This term is similar to the term "bug for bug compatible," another derogatory term that indicates all of the bugs in the previous version are still present in the successive version of the software product.