XML context item is handled as a string

When you assign a childless XML to a context item,

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assumes that the context item value is contained in the text content only.

Example

Using the context item <element color="blue">sample</element>,

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uses only the text of the XML, which is in this case the text sample.

However, if there are children, then the value is the entire XML document: <list><element color="blue">sample</element></list>.

Workaround

Use the embedded XML. If a childless node is required for processing, create the node using XSLT.