This test assumes that URIs end up being percent encoded. e.g.
<assert>/out/e3 = "true , http://base.example.org/ns/two%20organizations"</assert>
Regarding resolve-uri, F&O 3.0 says "No percent-encoding takes place."
It looks like this, and related issues with resolve-uri do not fully adhere to this special case. I propose to go over the resolve-uri tests and improve and adjust where needed.
Fixed for the mentioned test-case, by s/%20/ /. There were no other escapes in this test-set that I could find and a trivial search elsewhere didn't come up with other tests that have the same issue.
Marked resolved/fixed, changes pushed.