Saxon

Setting -xi:on in the command line is equivalent to setting Feature.XINCLUDE to true, which in turn sets the relevant flag in Configuration.defaultParseOptions.

The default parse options are certainly used by Configuration.buildSchemaDocument(), which I would think covers most ways of compiling a schema.

For stylesheets, in the normal path (no -y or -u options), the Transform command creates a StreamSource for the stylesheet and it's likely to find its way to StylesheetModule.loadStylesheet(), which calls StylesheetModule.makeStylesheetParseOptions(), which appears to make to reference to the default parse options in the Configuration.

So the first impression from the code is that on most paths, the Include option will apply to schema documents, but not to stylesheet documents. But I haven't checked the paths for included/imported modules in either case...

I confirmed by testing that -xi on the Transform command line does not cause XInclude elements to be expanded if they appear either in a primary or secondary stylesheet module (they are typically treated as literal result elements).

Further testing shows that -xi on the Validate command line DOES cause XInclude elements to be expanded in both the primary and secondary schema documents.

So, do we fix the code or the documentation?

I'm inclined to fix the documentation.

For stylesheets, there are legitimate reasons for treating <xi:include> elements as literal result elements, to be copied into the result tree.

For schemas, an <xi:include> element in a schema document makes no sense (except perhaps within xs:documentation) unless it is to be expanded during processing.