ADDITIONAL SYSTEM INFORMATION :
java version "1.8.0_172"
Java(TM) SE Runtime Environment (build 1.8.0_172-b11)
Java HotSpot(TM) 64-Bit Server VM (build 25.172-b11, mixed mode)

A DESCRIPTION OF THE PROBLEM :
This was previously reported as JDK-8025660 and JDK-4762733 but I believe that the resolution was incorrect. Calling DocumentBuilderFactory.setExpandEntityReferences(false) does indeed cause an EntityReference node to appear in the DOM, but a Text node containing the expanded text also appears as the next sibling. This text node is unexpected based on the Javadoc for DocumentBuilderFactory.setExpandEntityReferences.

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
See test case below. Call DocumentBuilderFactory.setExpandEntityReferences(false) then parse an XML file with an entity reference.

EXPECTED VERSUS ACTUAL BEHAVIOR :
EXPECTED -
Only the EntityReference node should be present in the DOM
ACTUAL -
The EntityReference node is present, along with a sibling Text node containing the expanded entity value.

---------- BEGIN SOURCE ----------
DocumentBuilderFactoryTest.java:

import java.io.File;
import java.io.FileInputStream;

import javax.xml.parsers.DocumentBuilder;
import javax.xml.parsers.DocumentBuilderFactory;

import org.testng.Assert;
import org.testng.annotations.Test;
import org.w3c.dom.Document;
import org.w3c.dom.Element;
import org.w3c.dom.NodeList;

public class DocumentBuilderFactoryTest
{
    private static final String XML_DIR = ".";

    /**
     * Test the setExpandEntityReferences.
     * @throws Exception If any errors occur.
     */
    @Test
    public void testCheckDocumentBuilderFactory08() throws Exception {
        try (FileInputStream fis = new FileInputStream(new File(
                XML_DIR, "DocumentBuilderFactory02.xml"))) {
            final DocumentBuilderFactory dbf = DocumentBuilderFactory.newInstance();
            dbf.setExpandEntityReferences(false);
            final DocumentBuilder docBuilder = dbf.newDocumentBuilder();
            final Document doc = docBuilder.parse(fis);
            final Element e = (Element) doc.getElementsByTagName("title").item(0);
            final NodeList nl = e.getChildNodes();
            Assert.assertTrue(nl.item(0) instanceof EntityReference);
            Assert.assertNull(nl.item(0).getNodeValue());
            // Should be just 1 EntityReference node, but a Text node also is present
            Assert.assertEquals(nl.getLength(), 1);
        }
    }

}

DocumentBuilderFactory02.xml:
<?xml version="1.0"?>
<!DOCTYPE document [
    <!ENTITY ws "Wiliam SHAkespeare">
    <!ELEMENT document (title)>
    <!ELEMENT title (#PCDATA)>
]>
<document>
    <title>&ws;</title>
</document>

---------- END SOURCE ----------

FREQUENCY : always