I'm not sure if this is actually a bug or not, but from the BOL there does not appear to be any documentation indicating that the following query contains any incorrect syntax.
NOTE: this query makes no real logical sense, but it is easier than writing out the full description of what I was looking at when I ran into this problem.
,Count(Distinct [ContactID]) OVER (PARTITION BY [ManagerID]) as MyTestCount
As an aside, I realize that I can instead use a derived table to gather the information using a dense_rank() and then max(). I also realize that I could use a group by statement instead of the OVER. However, Both of these feel like simple hacks that work around a bug to me. What would keep the engine from properly parsing the distinct?