library-reference-1.ts fails with runtests-browser

gulp runtests-browser --browser chrome --test library-reference-1.ts breaks.
From the local library-reference-1.trace.json:

[
    "======== Resolving type reference directive 'jquery', containing file '//src/consumer.ts', root directory 'types'. ========",
    "Resolving with primary search path 'types'",
    "File 'types/jquery/package.json' does not exist.",
    "File 'types/jquery/index.d.ts' does not exist.",
    "Looking up in 'node_modules' folder, initial location '//src/'",
    "File '//src/node_modules/jquery.ts' does not exist.",
    "File '//src/node_modules/jquery.d.ts' does not exist.",
    "File '//src/node_modules/jquery/package.json' does not exist.",
    "File '//src/node_modules/jquery/index.ts' does not exist.",
    "File '//src/node_modules/jquery/index.d.ts' does not exist.",
    "File '//src/node_modules/@types/jquery.ts' does not exist.",
    "File '//src/node_modules/@types/jquery.d.ts' does not exist.",
    "File '//src/node_modules/@types/jquery/package.json' does not exist.",
    "File '//src/node_modules/@types/jquery/index.ts' does not exist.",
    "File '//src/node_modules/@types/jquery/index.d.ts' does not exist.",
    "======== Type reference directive 'jquery' was not resolved. ========"
]

The correct trace should be:

[
    "======== Resolving type reference directive 'jquery', containing file '/src/consumer.ts', root directory 'types'. ========",
    "Resolving with primary search path 'types'",
    "File 'types/jquery/package.json' does not exist.",
    "File 'types/jquery/index.d.ts' exist - use it as a name resolution result.",
    "======== Type reference directive 'jquery' was successfully resolved to 'types/jquery/index.d.ts', primary: true. ========",
    "======== Resolving type reference directive 'jquery', containing file '/src/__inferred type names__.ts', root directory 'types'. ========",
    "Resolving with primary search path 'types'",
    "File 'types/jquery/package.json' does not exist.",
    "File 'types/jquery/index.d.ts' exist - use it as a name resolution result.",
    "======== Type reference directive 'jquery' was successfully resolved to 'types/jquery/index.d.ts', primary: true. ========"
]

Since // @filename: /src/types/jquery/index.d.ts is explicitly declared to exist in the test,
there must be some error in the mock file system when run in the browser.

Looking at the console it looks like we are getting 500 (Internal Server Error) for tests/baselines/local/library-reference-1.errors.txt, tests/baselines/library-reference-1.errors.txt, tests/baselines/local/library-reference-1.trace.json, and tests/baselines/local/library-reference-1.js. Not sure how this is related to the problem though.
EDIT: Upon further inspection it looks like webTestServer.ts is intentionally giving "500" errors for for files that haven't been found. We should probably use 404 instead.