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I think there might be an escaping problem in this test at: translate($r,' 	

', '') The XML parse will present the unescaped SPACE, TAB, CR and LF characters to the XQuery parser which will then further normalize them. I suggest using codepoints-to-string instead.
Similar problem in serialize-json-127.
I agree, we should avoid using XML escaping in tests because the effect is different for XPath and XQuery.
Now fixed.