In my understanding, the parent calculation algorithm should be also invoked for a node distributed to insertion points.

Okay, running the event retargeting algorithm on the tree in https://bugs.webkit.org/show_bug.cgi?id=101309:

1) We start with "#li3", push it into STACK and add (#li3, #li3) to TARGETS
2) According to parent calculation algo, next up is "content"
3) Since it's an insertion point, we push "content" to STACK and add (content, content) to TARGETS
4) Next up is "ul#ip_wrapper"
5) We add (ul#ip_wrapper, content) to TARGETS
6) Next up is "div"
7) We add (div, content) to TARGETS
8) Next up is ShadowRoot
9) We add (ShadowRoot, content) to targets, then pop STACK
10) Next up is "ul.stories"
11) We add (ul.stories, #li3) to TARGETS
...

So the problem is starts with step 3. We should _not_ retarget at insertion point.

Okay, running the event retargeting algorithm on the tree in https://bugs.webkit.org/show_bug.cgi?id=101309:

1) We start with "#li3", push it into STACK and add (#li3, #li3) to TARGETS
2) According to parent calculation algo, next up is "content"
3) Since it's an insertion point, we push "content" to STACK and add (content, content) to TARGETS
4) Next up is "ul#ip_wrapper"
5) We add (ul#ip_wrapper, content) to TARGETS
6) Next up is "div"
7) We add (div, content) to TARGETS
8) Next up is ShadowRoot
9) We add (ShadowRoot, content) to targets, then pop STACK
10) Next up is "ul.stories"
11) We add (ul.stories, #li3) to TARGETS
...

So the problem is starts with step 3. We should _not_ retarget at insertion point.

http://dvcs.w3.org/hg/webcomponents/rev/c7b1b3f1caf6