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In the Microsoft DataTypes tests, test hexBinary003 seems to be written under the impression that it is legal for the lexical representation of a hexBinary value to contain embedded spaces. As far as I can see there is nothing in the specification to warrant this.
Agreed that the expected outcome of this test should be invalid. We are following up with the WG to determine the process of updating the test suite.
Agreed that this instance should be marked as invalid. (Note that the test name in the metadata is hexBinary003_2069.v)