This test does not require evaluation of $var1, and therefore never need trigger the out-of-scope variable problem.  Thus XD00023 need not be raised.

<p:declare-step version="1.0" xmlns:p="http://www.w3.org/ns/xproc">
      <p:input port="source" />
      <p:variable name="var1" select="$var2" />
      <p:variable name="var2" select="'value'" />

      <p:identity>
        <p:input port="source">
          <p:inline><doc /></p:inline>
        </p:input>
      </p:identity>

      <p:sink />
    </p:declare-step>