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Each section describing a schema component has a subsection 3.*.3 listing the constraints on the XML representation of that component. Each 3.*.3 subsection references also the constraints at the component-level. For instance, see the last constraint of section 3.3.3 "Constraints on XML Representations of Element Declarations". Such references should be removed in order to have a more marked distinction among constraints on the XML representation of schema components, and constraints on the schema components themselves.
RESOLUTION: For bug 5286 to instruct the editors to make a list of what would have to change, and whether the XML constraints that appeal to components are also caught at the component level or need to be moved there. Come back with either wording proposal or workscope estimate, options, etc. So we are marking this needsDrafting so that the editors have permission to go ahead with the change (make a wording proposal) if they judge the effort to be workable.
bug 5276 appears to be related, i.e. it's an example of the kind of issue a complete addressing of this issue will encounter.
A wording proposal intended to resolve this issue in part (but not in full) was approved at the XML Schema WG call today. http://www.w3.org/XML/Group/2004/06/xmlschema-1/structures.b5286.html (member-only link) The issue remains open for now; the editors intend to draft a further proposal for discussion by the WG.
On the XML Schema WG call today, the WG adopted a second wording proposal to remove several more references from XML representation rules to the component layer. The reference to components from the rule forbidding circularity in attribute group references remains unrepaired. The WG asked the editors to prepare a wording proposal which specifies a fixed-point semantics for such situations. The wording proposal considered today (not adopted in full) is at http://www.w3.org/XML/Group/2004/06/xmlschema-1/structures.b5286b.html (member-only link).
A wording proposal intended to complete our work on this issue is at http://www.w3.org/XML/Group/2004/06/xmlschema-1/structures.b5286e.html (member-only link).
The wording proposal mentioned in comment #5 was adopted by the WG at today's call. With that, our work on this issue is complete and the WG believes that it has been resolved satisfactorily. Paolo, as the originator of the issue, it would be helpful if you could change the status of the issue to CLOSED to indicate that you are satisfied with the disposition of the issue, or change it to REOPENED if you are not satisfied. (Since you were on the call, I am fairly confident that you are satisfied, but it seems best to ask, for form's sake.) If we don't hear from you in the next two week's we'll assume you are satisfied.