I found a small problem with the example that causes the problematic behavior.

I’ve highlighted the mismatch that, when corrected, allows Java incremental compilation to behave “correctly”. If one removes the extra java/ dir or changes the sourceSet sourceDir to ‘src/java/java’, then only changing the static final field in DepTwo correctly updates the Main.class put in build/libs/IncrementalJava-1.0-SNAPSHOT.jar and the new value is output when running Main.

File tree contained in the IncrementalJavaCompile.jar
.
├── build.gradle
├── gradlew
├── gradlew.bat
├── settings.gradle
└── src
├── java
│ └── java (<--- extra java/ directory here)
│ └── com
│ └── google
│ └── jedo
│ └── IncDep
│ └── DepTwo.java
├── main
│ └── java
│ └── com
│ └── google
│ └── jedo
│ └── IncrementalJava
│ ├── DepOne.java
│ └── Main.java

build.gradle
apply plugin: ‘java’
sourceSets {
main {
java

}
}
compileJava

I consider this behavior of Gradle unexpected, so I have opened a new issue that suggests we warn users given a scenario like this: https://issues.gradle.org/browse/GRADLE-3431

Based on my comments on this issue.

I'm told there is a more complicated case where incremental java compilation fails. I'd love to hear more and have a complete example to look into there. If we get that, then we should reopen this issue.

Jerome provided a new example that does not work as intended