You are running into the problem of cmd's static variable expansion. The MODE variable is only evaluated once. You can see this if you omit the @echo off line.
From the set /? documentation:
Finally, support for delayed environment variable expansion has
been added. This support is always
disabled by default, but may be
enabled/disabled via the /V command
line switch to CMD.EXE. See CMD /?
Delayed environment variable expansion is useful for getting around
the limitations of the current
expansion which happens when a line of
text is read, not when it is executed.
The following example demonstrates the
problem with immediate variable
expansion:
set VAR=before
if "%VAR%" == "before" (
set VAR=after
if "%VAR%" == "after" @echo If you see this, it worked
)
would never display the message, since
the %VAR% in BOTH IF statements is
substituted when the first IF
statement is read, since it logically
includes the body of the IF, which is
a compound statement. So the IF
inside the compound statement is
really comparing "before" with "after"
which will never be equal. Similarly,
the following example will not work as
expected:
set LIST=
for %i in (*) do set LIST=%LIST% %i
echo %LIST%
in that it will NOT build up a list of
files in the current directory, but
instead will just set the LIST
variable to the last file found.
Again, this is because the %LIST% is
expanded just once when the FOR
statement is read, and at that time
the LIST variable is empty. So the
actual FOR loop we are executing is:
for %i in (*) do set LIST= %i
which just keeps setting LIST to the
last file found.
Delayed environment variable expansion
allows you to use a different
character (the exclamation mark) to
expand environment variables at
execution time. If delayed variable
expansion is enabled, the above
examples could be written as follows
to work as intended:
set VAR=before
if "%VAR%" == "before" (
set VAR=after
if "!VAR!" == "after" @echo If you see this, it worked
)
set LIST=
for %i in (*) do set LIST=!LIST! %i
echo %LIST%