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The instruction xsl:fallback is missing in the streamability rules of instructions, under 19.8.4 Classifying Instructions (http://www.w3.org/TR/xslt-30/#classifying-instructions). The streamability rules are simple: there is only one operand, the sequence constructor, which is already defined. However, when the instruction appears within a known XSLT 3.0 instruction, it should be ignored.
We discussed this in Prague. After some hesitation, we concluded that the streamability of fallbacks can in fact be calculated. If the XSLT processor is going to use the fallback, then the streamability is that of the contained sequence constructor; if not, the xsl:fallback is ignored and will have no effect on the streamability of the stylesheet. In neither case should there be a problem for the implementation; the fact that *we* don't know anything about the streamability of the extension instructions or XSLT 17.0 instructions doesn't turn out to matter.
Changes applied.