Many websites have menus that open on mouse hover, eg. see the 'more' menus at the top of http://techcrunch.com/.
Touch events enables limited touch compatibility with such menus by sending mousemove,mousedown,mouseup events on tap (see http://www.w3.org/TR/touch-events/#list-of-touchevent-types although it's not precisely specified). In practice, most such menus are usable with touch in browsers that implement touch events.
Pointer events, on the other hand, explicitly prohibits such compatibility by saying: "For input devices that do not support hover, a user agent must also fire a pointerout event after firing the pointerup event."
It may be unacceptable for browsers which already support this scenario via touch events to no longer support the scenario once as part of implementing pointer events. Should the wording perhaps be relaxed to give the UA some explicit freedom in delaying that pointerout event? Eg. perhaps "a user agent must also fire a pointerout event at some time after the pointerup event and before any other event is fired for the pointer".
Closing this issue as LATER. As discussed in the 2/5 telecon and on the list, we'll consider this in Pointer Events V2.
Added to V.next wiki: