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It appears to be legal to say validate type xs:untyped {...} but we don't say what it might mean. I suggest that we explicitly allow this construct and define it to have the same meaning as XSLT's <xsl:copy-of select="..." validation="strip"/> that is, it converts a typed document to an untyped one by removing all type annotations. There are a number of use cases where this is handy, for example before doing a deep-equal comparison.
The WG agreed with this proposal.