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In the Microsoft SimpleType test set, testGroup stZ041, the schema stZ041.xsd has: <xs:simpleType name="myType" final="extension"> Part 2 section 4.1.2 gives the content model as: <simpleType final = (#all | List of (list | union | restriction)) The schema is therefore invalid, but it is labelled as valid.
The question of the final attribute supporting 'extension' is an old one, please see http://lists.w3.org/Archives/Public/xmlschema-dev/2001Jun/0047.html. The structures and datatypes spec are in conflict here, it is more likely that it was eliminated from the datatypes BNF as a typo. At other places in the normative spec it clearly talks about supporting extension on final attribute on simple types.
In 1.1 (notwithstanding the typo documented in bug #5782) the {final} property of simpleType allows "extension", making the test valid. Bug #5783 has been raised documenting the inconsistency between Part 1 and Part 2, and this bug will be marked as dependent on the resolution of #5783
Even if the extension is allowed in the final attribute, shouldn't the test be marked as invalid anyway? ct tries to derive from myType by extension but extension is blocked by myType...
WG agreed that either way the test is invalid.
Removed dependency because Tobias's analysis is correct