The XQuery Update conversion from XQueryX to XQuery ignores function annotations.  

See:
http://www.w3.org/2015/02/xquery-update-30/xquery-update-30-xqueryx.xsl

Specifically:

  <!-- Over-ride the template for functionDecl in XQueryX.xsd   -->
  <xsl:template match="xqx:functionDecl" priority="100">
    <xsl:text>declare </xsl:text>
    <xsl:if test="@xqx:updatingFunction and @xqx:updatingFunction = 'true'">
       <xsl:text>updating </xsl:text>
    </xsl:if>
    <xsl:text>function </xsl:text>
    ...

This does not account for possible xqx:annotation children of xqx:functionDecl.  Here is the original definition in XQueryX.xsl:

  <xsl:template match="xqx:functionDecl">
    <xsl:text>declare</xsl:text>
    <xsl:apply-templates select="xqx:annotation"/>
    <xsl:text> function </xsl:text>
    ...