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The XSLT 3.0 specification draft, Section 15.3, in paragraph three states "the select attribute of the xsl:merge-input element and the contained sequence constructor are mutually exclusive..." What happens if both the select attribute and the contained sequence constructor are absent? I don't think it is obvious the detail of this edge case.
The spec needs to be clarified to make clear that this is allowed, and the effect is that the merge input sequence is an empty sequence.
I have applied this clarification to the spec and am marking the bug as closed.