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While expanding @included step 13.4.6.2 it is said
Set expanded value to the result of using this algorithm recursively passing active context, active property, value for element, base URL, and the frameExpansion and ordered flags, ensuring that the result is an array.
I believe the implementation is supposed to pass @included as active property instead of passing the current value. Otherwise, free floating literals inside the included block are automatically dropped, which makes the test expand/in07 to fail.