Saxon

See QT3 test case FunctionCall-417

         declare function local:f($x as xs:string, $y as xs:string, $z as xs:string := '1900-01-01') as xs:string {
           concat($x, '-', $y, ' on ', $z)
         };
         declare function local:g($x as xs:string, $z as function(xs:string, xs:string, xs:integer) as xs:string) {
           $z($x, $x, 22)
         };  
         local:g("ABC", local:f#2)

The function local:f#2 should be equivalent to fn($x, $y){concat($x, '-', $y, ' on ', '1900-01-01'); the call on $z should accept this arity-2 function by virtue of reduced-arity coercion, and the third argument (22) should be ignored. In fact we get a run-time type error because local:f expects a string, not an integer, as its third argument.

The effect is more noticeable when we supply something like deep-equal#2 as an argument to for-each-pair. Now that for-each-pair accepts an arity-3 callback, with the third argument being an integer position, we get a spurious failure because deep-equal has an arity-3 variant that expects a string as the third argument. (But this manifestation is not present in 12.4, because that does not yet implement the arity-3 callback on for-each-pair).