Hi Curtis, I'm revisiting this issue and that did not seem to help. Any other ideas? This occurs in all my workspaces (network and local), even if I am not copying any features. I am paralyzed until this gets fixed so I would really appreciate any insight.
Further inspection suggests that it seems to be limited to the data management toolbox. I have tried throwing a new spatial join in my model from the analysis toolbox and that passes a feature class fine.