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The structures is moving to a new way of mapping the {annotations} property that is consistent across all components. The datatypes half needs to be updated to follow the same convention.
Concretely, I think this issue means: where the XML mapping rules currently say things like {annotations} The annotations corresponding to all the <annotation> element information items in the [children], if any. it should say something like {annotations} The annotation mapping of the ... element, as defined in XSDL 1.1 Part 1 Structures, "XML Representation of Annotation Schema Components (sect. 3.15.2). This has the disadvantage of looking more complicated, but the advantage of correctly handling attributes in foreign namespaces, which match the attribute wildcard on (some element of) the source declaration.
A wording proposal for this issue (among others) was placed on the server on 4 February 2008 at http://www.w3.org/XML/Group/2004/06/xmlschema-2/datatypes.omnibus.200801.html (member-only link).
The wording proposal mentioned in an earlier comment was considered and adopted today by the XML Schema Working Group. Accordingly, I'm marking this issue resolved. Since the originator of the issue is a member of the WG, the adoption of the proposal by the WG is probably sufficient evidence that the originator is content with the WG's resolution of the issue. But if the editors don't get around to it, it would be convenient if the originator could take the time to shift the status of the issue from RESOLVED to CLOSED. Thanks.