can't use User as target type in a limited entity reference field

Reference Field Option Limit used to be compatible with past versions of the Entity Reference module. After updating the Entity Reference module to version 7.x-1.0-rc1 "User" targets are no longer limitable.

This may have something to do with the fact that after updating the new version of entity reference, you must perform the following pending updates to the database:

entityreference module
• 7001 - Drop "target_type" from the field schema.

And when adding an Entity Reference field, when you select Target Type: User you cannot select "Target Bundle"

This is how you can recreate the problem to check for yourself...

Created a fresh install off drupal 7.12

Downloaded & enabled entityreference-7.x-1.0-rc1 & dependencies
Downloaded & enabled reference_option_limit-7.x-1.0-alpha3

Create Vocabulary: Position
Added several positions

Under Account Settings
Added new field: Entity Reference
Target Type: Taxonomy Term
Target Bundle: Position

Created content-type: Assignment
Added existing field: Entity Reference: field_position (Position)
Added new field: Entity Reference
Field Name: Assignee
Target Type: User

Now, when editing Assignment settings for the Assignee field. the following option is transparent and may not be selected:

[ ] Limit this field's options according to matching field values
This will limit the options presented in this field's widget to only those entities that match the current entity in certain field values. This option is only available when both the current entity bundle and the referred entity bundle(s) have fields in common.

While the User entity and the Assignment content-type both have the position field in common, the Assignee field options are not limitable for the Assignment content-type.