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We say that the strip-type-annotations attribute applies to documents read using xsl:stream/xsl:source-document. This doesn't seem to make much sense given that this instruction has a validation attribute, allowing you to specify, for example <xsl:source-document validation="strict"/>
But we do say The presence of a <code>validation</code> or <code>type</code> attribute on an <elcode>xsl:source-document</elcode> instruction causes any <code>input-type-annotations</code> attribute to have no effect on any document read using that instruction.
Reclassified as editorial. I have added a note under input-type-annotations confirming what we already say under xsl:source-document, namely that the attribute has no effect when the validation or type attributes are present.