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This bug is for the Part 1 aspects of bug 1916. The primary reference is http://lists.w3.org/Archives/Member/w3c-xml-schema-ig/2005Dec/0083.html
During today's call, the Working Group decided against taking action on this issue at this time, and to close it with the disposition LATER. That means that we do not expect any change in the 1.1 spec to address the concern raised here.