Moodle Docs says in the Roles FAQs
If a user has two roles assigned for a course the system will default to the lowest level role, in this case the Student Role. The best advice is to hold only one role. If you want to see things from the student perspective use the switch roles to function or create a phantom student.
Is this correct in 2.x? I would assume if I created a dummy role with permissions to do nothing and assigned someone that and the teacher role within the course, the teacher role would give the user the permissions.
On the other hand, if I gave someone the system wide role of teacher, then in a course assigned them the role of student (Course administration , Enrolled users), they would not have teacher permissions.
This is an important point because I want to have a "Lead Teacher" role appear as the Course Contact. I was not paying attention when I created the role, because I only gave it to one of my 6 teachers in the course. So if I copied the student role to create the Lead Teacher role , then that teacher would have the student set of permissions for this role !!!
I am missing something? Those words seem all wrong but I know that only Martin should mess with permissions :O