Enclosure in 5Z71 and 6E59?

I’m a bit confused (probably my fault rather than yours). The example code you posted fails to compile at all (the dreaded “Translating the Source Failed” Error of Vaguely Sinister Doom) in Inform 7 6E59 due the line:

The description of a nose is usually "[Random person enclosing the noun][']s nose is noselike."

While that line deserves its own attention, let’s initially stay on course and change it to something mundane like:

The description of a nose is usually "A bridge and two nostrils.  Yep, it's a nose."

This allows the project to compile in 6E59. Line 3 of the “test me” works fine, demonstrating:

>x sandie's stick It seems confident, if not arrogant.
The trouble with lines 8 and 9 of “test me” is that you’ve said in the source:

Understand "[something related by reversed enclosure] 's" as a thing.

Therefore when Mike is carrying two hats, a disambiguation option is the natural result (in other words, the code performs its function as written).

There’s certainly much to be said about this example, but before discussing it we should all be on the same page. Is there more to the code than was posted, or are you relying on second-hand accounts from another person? I’d hate to spend time examining the wrong problem(s).

A possibly relevant thread involving a somewhat similar question is over here.