Here is a workaround for the busybox bug I reported that also applies to ondemnad.
ls -1 does does not work properly on a symlink to a directory.
This also applies to ls symlink | anything.
I have both tiny core and micro core on the same machine with different tce directories.
In order to save space, I made tce/optional in mc a symlink to the one in tc.
This revealed the bug. Until busybox is fixed, here is a workaround.
Change
ls "$TCEDIR"/optional | grep -E .tcz[ml]*$ > "$TMP"
to
ls "$TCEDIR"/optional/ | grep -E .tcz[ml]*$ > "$TMP"