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In the XQuery family of documents, comparison of items is often defined with reference to fn:deep-equal. In fn:distinct-values, this is not the case. I believe that the extensive set of rules in distinct-values follow those of deep-equal, and the text might be simplified by referencing deep-equal.
I agree. I was going to suggest that the same observation also applies to fn:index-of, but it seems that this differs in that NaN != NaN.
The WG agreed to make this change, and it has been made.