Saxon

Thanks for reporting it. I've run it and get the same results, that the instance document is valid.

Your schema contains xs:appInfo entries with declarations such as:

<xsd:appinfo>
            <wm:requiredLevel value="Conditionally Required"/>
            <wm:conditionalAttributes>
              <wm:conditionalAttributeGroup>
                <wm:conditionalAttribute name="hasBatteries" value="Yes"/>
              </wm:conditionalAttributeGroup>
            </wm:conditionalAttributes>
            <wm:displayName>Contained Battery Type</wm:displayName>
            <wm:group>Compliance</wm:group>
            <wm:rank>51000</wm:rank>
          </xsd:appinfo>

where the wm namespace is defined by xmlns:wm="http://walmart.com/". I've no idea what the semantics of these declarations are, but it's not something defined by the W3C specifications, and it's not something recognized by Saxon (schema processor ignore the contents of appInfo unless it's in a namespace that they explicitly recognize).

So as far as I can see, these schema documents are using some kind of proprietary extension to the W3C XSD syntax which Saxon does not recognize. (Therefore: no bug).

To define conditional constraints like this to work with Saxon you need to use the features of XSD 1.1 such as xs:assert and xs:conditionalContent.