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Two issues: 1. <header>'s content model is wrong 2. outline algorithm is probably wrong The spec says about <header>: "Content model: Flow content, including at least one descendant that is heading content, but no sectioning content descendants, no header element descendants, and no footer element descendants." This means that <header><blockquote><h1>x</h1></blockquote></header> is allowed, since blockquote is sectioning root but not sectioning content. Testing with http://gsnedders.html5.org/outliner/ and http://james.html5.org/outliner.html it appears that the outline algorithm doesn't ignore sectioning roots that are descendants of <header>.
The outline algorithm says "For the purposes of document summaries, outlines, and the like, the text of header elements is defined to be the text of the highest ranked h1–h6 element descendant of the header element, if there are any such elements, and the first such element if there are multiple elements with that rank. If there are no such elements, then the text of the header element is the empty string." This should ignore sectioning root subtrees.
No, that's under "the header element", not "creating an outline".
As far as I can tell this is now fixed, since <hgroup> can only contain h1-h6, and the new <header> isn't sectioning.