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Stylesheets with version="1.1" are sometimes encountered in the wild (probably because examples in my book used this value, as it went to press just before XSLT 1.1 was cancelled). XSLT 2.0 requires processors to treat such stylesheets as if version="1.0" were specified (all values less than 2.0 are treated the same way). XSLT 3.0 recommends that processors reject this value as a static error. This is an incompatibility and should be recorded as such in the list of incompatibilities. (I'm not suggesting that we change the rule. It would be complicated. How would we handle version="2.1"? That clearly has a different meaning to a 2.0 processor as to a 3.0 processor, by design.)
Agreed we should document this incompatibility.