Could you solve this by checking for a $c(1) following the found string?

USER>s target = "Targetw"
USER>s list=$LB("test","falseTarget","searching unknown strings here is a very long piece with enough characters to get a lowercase alpha as a $list marker","items","in","aaatArGetwaaaa","lists",$lb("/subs","/values","nested list","did you see that ""w"" before the third piece?"))
USER>set location=0 f { set location=$find($zcvt(list,"u"),$zcvt(target,"u"),location)  quit:location=0  continue:$extract(list,location)=$c(1)  quit }
USER>w location
162