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org.eclipse.wst.xquery.sse.core.internal.parser.XQueryReParser should override the method newInstance(). Otherwise, it defaults to the super class creating an instance of StructuredDocumentParser in org.eclipse.wst.sse.core.internal.text.StructuredDocumentReParser.newInstance(). This ends up causing incorrect parsing/partitioning of document content. I haven't seen this issue in the bundled XQuery SSE editor, but I hit it when using the XQuery content type in our custom structured text editor.
Fixed.