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See: http://www.w3.org/XML/Group/2007/09/scds Eliminate the mechanism of 'elided steps'. Replace it with explicit definition of appropriate axes through which the relevant nodes can be reached.
The WG considered this at the October 2007 F2F and agreed to rewrite in terms of defined axes.
Fixed in Last Call draft http://www.w3.org/TR/2008/WD-xmlschema-ref-20081117/