Saxon

ALLOW_EXTERNAL_FUNCTIONS=false has always blocked functions implemented as extension functions, and has never blocked functions implemented as system functions. What has changed is the implementation of file:base-dir, moving it from one category to the other.

In fact all the EXPathFile functions other than file:base-dir are implemented as reflexive extension functions and so should be disabled with this configuration setting. The file:base-dir() function is the only exception: this is implemented as a system function to allow compile-time pre-evaluation.

In 9.6, file:base-dir was implemented as an integrated extension function because this was the only way of providing access to the static context. In 9.8 it moved to being a System function, along with a few other cases where we were implementing built in functions using the extension function mechanism. I think that at the same time, almost as a side effect, it changed so that it would be evaluated statically. However, it's not clear that this is a good thing, since with XSLT compiled packages, it should really return the deployment location rather than the compile time code location. The static-base-uri() function has changed so that static evaluation doesn't occur if the package is marked as relocatable; this function should really do the same.

Incidentally, we don't provide any way of disabling the system function static-base-uri(), which provides much the same information. In both cases, however, you can disguise the static base URI by setting it explicitly when you compile the stylesheet or query.