I have fixed this as 'obvious' on 8-branch(r264925) and trunk(r264915).

Paul

2018-10-08  Paul Thomas  <pault@gcc.gnu.org>

    Backport from trunk
    PR fortran/86372
    * trans-stmt.c (trans_associate_var): Character associate names
    with variable string length do not have to be deferred length
    for the string length to be set, if variable.

2018-10-08  Paul Thomas  <pault@gcc.gnu.org>

    Backport from trunk
    PR fortran/86372
    * gfortran.dg/associate_41.f90: New test.