Custom author base conflict?

There seems to be a conflict when using a custom author base:
I am changing the author base as such:

/**
 * Changes the author slug
 */
add_action('init', 'lw_change_author_base');
function lw_change_author_base() {
    global $wp_rewrite;
    $author_slug = 'by'; // change slug name
    $wp_rewrite->author_base = $author_slug;
}

But now neither: http://www.website.com/product/by/sascha
NOR http://www.website.com/product/author/sascha
work anymore. Both 404.

BUT: http://www.2013a.landwire.net/by/sascha/ works ok!

https://wordpress.org/plugins/custom-post-type-permalinks/