The reason you are seeing this is the Railties
executable wrapper is still installed. You need to uninstall the Rails
gem and and the Railties
gem.
$ gem uninstall rails
$ gem uninstall railties
You will likely be prompted to select which version of the gem to uninstall.
If needed, you can reinstall a specific version of Rails.
$ gem install rails -v 3.2.16
$ gem install railties -v 3.2.16