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The following, from the end of 4.2.1, should be normative, not a NOTE: NOTE: As discussed in Missing Sub-components (5.3), QNames in XML representations may fail to resolve, rendering components incomplete and unusable because of missing subcomponents. During schema construction, implementations are likely to retain QName values for such references, in case subsequent processing provides a referent. Absent target namespace names of such as-yet unresolved reference QNames in included components should also be converted if clause 3.2 is satisfied. See: http://lists.w3.org/Archives/Public/www-xml-schema-comments/2002JanMar/0240.html
Discussed at the May 2 concall: http://lists.w3.org/Archives/Member/w3c-xml-schema-ig/2002May/0020.html. The WG resolved to classify R-107 as an error with erratum and to instruct HST to prepare an erratum changing 'should' to 'must' and making it a paragraph, not a note. Draft errata posted at: http://lists.w3.org/Archives/Member/w3c-xml-schema-ig/2002Oct/0201.html Discussed and approved with ammendments, at Oct. f2f. See: http://www.w3.org/XML/2002/10/xml-schema-ftf-minutes Erratum E1-33 added.