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Licences with mutually exclusive terms

Is it true that a copyright licence with mutually exclusive terms are non-free? Further, is a licence saying:

You may prepare, copy and distribute derived works of this software. However, you may not modify this work.

...specifying mutually exclusive terms? What does it mean.

I am particularly interested in past cases; either discussions on debian-legal, or from the courts. I realise this may be off-topic for debian-legal. If I get replies off-list, I will summarise them.

Many thanks in advance for any help,

MJR/slef     My Opinion Only and possibly not of any group I know.
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