Change:
2.6.3. <del> A function expression is well-typed if all of the following are true: </del> <ins> For a function expression to be well typed: </ins> <del> If the function expression occurs as a "test-expr" in a logical expression, the function is declared to have a result type of "LogicalType", or (by conversion as per type-conv) "NodesType". </del> <ins> its declared type must be well typed in the context in which it occurs, and </ins> <del> If the function expression occurs directly as a "comparable" in a comparison, the function is declared to have a result type of "ValueType". </del> <ins> its arguments must be well typed for the declared type of the corresponding parameters. </ins> <del> Otherwise (the function expression occurs as an argument in another function expression), the following rules for function arguments apply to its declared result type. </del> <ins> (1) As per the grammar, a function expression can occur in three different immediate contexts, which lead to the following conditions for well-typedness: </ins> <del> The arguments of the function expression are well-typed, as follows. Each argument of the function can be used for the declared type of the corresponding declared parameter according to one of the following rules: The argument is a function expression with declared result type that is the same as the declared type of the parameter. The argument is a function expression with declared result type "NodesType" and the declared type of the parameter is "LogicalType".  In this case the argument is converted to "LogicalType" as per type-conv. The argument is a value expressed as a literal and the declared type of the parameter is "ValueType". The argument is a singular query and the declared type of the parameter is "ValueType".  In this case: If the query results in a nodelist consisting of a single node, the argument is the value of the node. If the query results in an empty nodelist, the argument is "Nothing". The argument is a query (including singular query) and the declared type of the parameter is "NodesType". The argument is a "logical-expr" and the declared type of the parameter is "LogicalType". Note that the last bullet item includes the case that the argument is a query (including singular query) and the declared type of the parameter is "LogicalType".  In this case the nodelist resulting from the query is interpreted as a logical-expr in the same way (extest) it would be converted to "LogicalType" as per type-conv. </del> <ins> (2) The arguments of the function expression are well-typed when each argument of the function can be used for the declared type of the corresponding parameter, each according to one of the following conditions depending on the way the argument is supplied: </ins> 2.6.4.

Discussion:
I actually ordered the two definition lists in the order the production appear in the grammar, so this is now easy to check (and I have checked it).
The section in question (and subject to some change soon) is URL The part that feels clunky to me is the first line: While not wrong, when you get into the bullet points, it feels odd that we're saying "all of the following are true" when only one things ever applies due to the conditions each item defines. We're saying we have three options, A, B, and C and then we define rules: If A, then ... If B, then ... Otherwise C, then ... (I know I made a about changing "rules" to "scenarios" in a previous PR, but each of these statements conforms to the definition I gave for a "rule.") The thing that feels weird is that we're saying they all_ must be true, which... is "correct" because the requirements are conditionally applied, but also it seems that (because of the conditions) only one ever actually applies, meaning that the other two are more "not applicable" than they are "true." Maybe if we instead said: Previous to the current text (before the type system was introduced), we had:
I was also thinking of turning this into a table.
A table could be nice, too, but the "all of following must be true" language still needs adjustment.
I agree this section is rather tedious to read.
Oh, and regardless of whether a table could be crammed into the document, it would be good to somehow check that all the permutations have been covered correctly. It's too hard to hold the possibilities in my small head while reading the current text...