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As said at the end of the message, a failed report can reflect a lack of simplification and not a true failure. This is the case here, because on the intersection domain D, z < 0 and w > 0, so you can conclude that z == -abs(z) and w == abs(w) are both true and that the test is actually passed. Therefore you can go on...

It is a pity though that Sage does not arrive automatically at the same conclusion. This is a weakness of the current simplifying mechanism on subcharts and should be improved in the future.