XSDHandler.java line 1543 reads:

                if( schemaSource instanceof SAXSource ) {
                    SAXSource ss = (SAXSource)schemaSource;
                    XMLReader reader = ss.getXMLReader();
                    if(reader==null) {
                        reader = new SAXParser();
                        try {
                            reader.setFeature("http://xml.org/sax/features/namespaces",true);
                            reader.setFeature("http://xml.org/sax/features/namespace-prefixes",true);
                        } catch( SAXException e ) {
                            // impossible
                            e.printStackTrace();
                            throw new InternalError();
                        }
                    }

but this actually needs to be:


                if( schemaSource instanceof SAXSource ) {
                    SAXSource ss = (SAXSource)schemaSource;
                    XMLReader reader = ss.getXMLReader();
                    if(reader==null) {
                        reader = new SAXParser();
                    }
                    try {
                        reader.setFeature("http://xml.org/sax/features/namespaces",true);
                        reader.setFeature("http://xml.org/sax/features/namespace-prefixes",true);
                    } catch( SAXException e ) {
                         // impossible
                        e.printStackTrace();
                        throw new InternalError();
                    }
 
otherwise the JAXP RI doesn't work correctly with SAXSource.