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Does the spec. need clarification wrt the allowability of anySimpleType as a member of unions. Part 1 3.14.6 Simple Type Definition Properties Correct rules it out, but 2.5/6.1 of Datatypes might be read as allowing it, because it appears to imply that Atomic+List+Union exhausts the space of possibilities.
The WG discussed this item on 9 December 2005 and agreed to treat it as a requirement for 1.1 that we clarify whether anySimpleType may or must not be used as a member of a union. But 2574 raises the same question for version 1.0; it may be relevant to this issue because if 1.0 has a clear answer to this question, some WG members will prefer not to change the answer in 1.1. There is a minor error in comment 1 -- it is clause 3.1 of Schema Component Constraint: Derivation Valid (Restriction, Simple), not Simple Type Definition Properties Correct, which appears to rule out anySimpleType. 3.1 The {member type definitions} must all have {variety} of atomic or list. (http://www.w3.org/TR/xmlschema-1/#cos-st-restricts) This clause must change, however, in any case, since the resolution of bug 2044 (retain union-level facets) requires that member types of variety union be allowed. (See bug 2044 comment 2, see also bug 2333, which is the Structures part of that issue.)
At the face to face meeting of January 2006 in St. Petersburg, the Working Group discussed this issue. While there was some sentiment for giving it a high priority, in the end the Working Group decided not to take further action on this issue in XML Schema 1.1. The rationale for the Working Group's decision was simple: the obscurity regarding anySimpleType appears not to be causing serious difficulties in practice (our collection of a thousand schema documents found 'in the wild' has no instances of unions which have anySimpleType as a member), and it was not felt useful to delay Datatypes 1.1 while the Working Group discussed this issue further. Accordingly, I am marking this issue as RESOLVED / WONTFIX.