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In section 3.1.8.3.a of the XQuery Update specification, it states: if $target is an attribute node, the attributes property of parent($target) is replaced by $replacement. This seems to be worded incorrectly and should probably be replaced with something like this: if $target is an attribute node, $target is removed from the attributes property of parent($target), and is replaced by $replacement.
John, Thanks for catching this error. The working group agrees with your comment and will correct the error in the next version of the update specification. Regards, Don Chamberlin (for the Query Working Group)