In section 2.1 rule 3 we read:

If the outermost expression in a query returns a pending update list, upd:applyUpdates is implicitly invoked, supplying as arguments (a) the pending update list, and (b) the value of the revalidation mode in the static context of the main query module.

But applyUpdates has three arguments. I believe we need to add:

(c) the value of $inherit-namespaces, which is true if the copy-namespaces mode in the static context of the main query module specifies inherit, and is otherwise false.