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The two updating expressions in the example should be enclosed in parentheses: let $q := /inventory/item[serialno = "123456"]/quantity return ( do replace value of $q with ( ), do insert attribute xsi:nil {"true"} into $q ) Otherwise, the query consists of two expressions joined by a comma operator and in which the second will fail because $q is not in scope.
Ronald, Thank you for this bug report, which was considered by the Query Working Group on May 8, 2007. The working group agrees with your analysis and will make the suggested correction in the next working draft of the Update Facility. Since your classified the bug as "trivial", I am marking this bug report as Fixed and Closed. Regards, Don Chamberlin (for the Query Working Group)