> +(defun dired--no-subst-prompt (command char-positions)
> […]
> +              ((setq confirmations (dired--need-confirm-positions command "*"))
> +               (y-or-n-p (dired--no-subst-prompt confirmations command)))
> +              ((setq confirmations (dired--need-confirm-positions command "?"))
> +               (y-or-n-p (dired--no-subst-prompt command confirmations)))

Mmmm, am I missing something, or have the arguments to
dired--no-subst-prompt been reversed in the "*" case?  I.e. shoudn't

> +               (y-or-n-p (dired--no-subst-prompt confirmations command)))

rather be

> +               (y-or-n-p (dired--no-subst-prompt command confirmations)))

?  As things stand, "! grep 'foo.*'" in Dired fails, saying:

    let: Wrong type argument: stringp, (9)