Help Desk Ticket Reference: https://na7.salesforce.com/500A0000007s42K
Steps to Reproduce: create a virtual layer using an XSD.  
1.  Create new Teiid Project.
2.  Import the XSD using the 'Import/XML Schemas" dialogue.
3.  Create a skeleton Relational View Model.
4.  Open up the XSD from step 2 in the Eclipse XML Editor.
5.  Right-click on the one element (in this case students).
6.  Select Modeling/Create XML to Scalar Transformation
7.  Select the Relational View Model created in Step 3.
8.  Update imports and modify datatypes as required
9.  There are now 5 extract_* functions:  extract_student, extract_health, extract_nonCitizen, extract_citizenCountry, extract_birthCountry
10. Open up the Transformation View for any extract_* function.  For example, the extract_student.

The transformation for this is generated as follows:
CREATE VIRTUAL PROCEDURE
BEGIN
	SELECT t.* FROM XMLTABLE(XMLNAMESPACES(DEFAULT ''), '/students/student/barReview/studentRep/health/nonCitizen' PASSING STUDENTVIEWEXTRACT.STUDENTS.EXTRACT_STUDENT.xml_in COLUMNS headRep boolean, abaNumber string) AS t;
END

First things to notice: the namespace is empty and the XQuery is incorrect.  Upon inspection of the sample.xml file, one will notice that <student> is the second element.  Additionally, the root element is using a namespace.  In this instance, the root element is actually <pty:students>.  And, the XQuery that is generated, points to nothing.  Specifically, barReview, health, and nonCitizen are all at the same level within the document.

project_key: SOA

Incorrect Transformation when using 'Create XML to Scalar Transformation' in Teiid Designer.  See Steps to reproduce section for full description.