Gradle sourceCompatibility has no effect to subprojects

It seems this behavior is caused by specifying the sourceCompatibility before apply plugin: 'java', which happens if you try to set the compatibility option inside allprojects.

In my setup, the situation can be solved by replacing:

allprojects {
    sourceCompatibility = 1.6
    targetCompatibility = 1.6
}

with:

allprojects {
    apply plugin: 'java'
    sourceCompatibility = 1.6
    targetCompatibility = 1.6
}

Will be glad if anyone else can verify this in a different setup.

I am still not sure whether this should be reported as a bug but I believe this solution is better than the work-around mentioned above (which has been very helpful however).