[flang] Fix for flang-compiler/f18#694 - Unexpected error when compiling submodule Incorporated all review comments and updated the test case.

Change-Id: I03939bfc705cc5319a0b7da3305026b8403b8edc

Original-commit: flang-compiler/f18@5c602bfbc74a3cad1de6f35204bbfd64ac29bfa3
Reviewed-on: https://github.com/flang-compiler/f18/pull/817