In the C preprocessor, after a macro has been expanded the result is rescanned for further macros. To prevent recursion, [the C standard][n3220] says the following in section 6.10.5.4p2. (This text has been basically the same since C89.)
If the name of the macro being replaced is found during this scan of the replacement list (not including the rest of the source file’s preprocessing tokens), it is not replaced. Furthermore, if any nested replacements encounter the name of the macro being replaced, it is not replaced. These nonreplaced macro name preprocessing tokens are no longer available for further replacement even if they are later (re)examined in contexts in which that macro name preprocessing token would otherwise have been replaced.
Informally we say that when a macro name is unavailable for expansion, it is “painted blue”.
In [Dave Prosser’s C preprocessor algorithm][prosser] something more complicated happens. He attaches a “hide set” to each token, written THS.