Yes, this is a "feature" of ogr2ogr. See
http://trac.osgeo.org/gdal/ticket/2771 which is exactly the same behaviour
your see.
The solution is to add "-nln out" at the end of your ogr2ogr commandline, as
the name of your source dataset is "sssi" (because of sshi.shp) and the name
of your destin
Dear List,
I am attempting to use ogr2ogr to append a shapefile to another
shapefile. However, when the -update parameter is included the
incorrect source filename appears to be used.
ogr2ogr -append -update -select meta_type,meta_id,meta_name
"C:/downloadworking/out.shp" "SSSI/sssi.shp"