See the question and my original answer on StackOverflow

I can reproduce this. Looks like a bug to me (<rant>.NET 4.6 has a lot...</rant>). You should report it to Microsoft Connect.

While this is fixed, you can check the source here:,091791a9542f1952

What it tells us is it can be overcome using an AppContext switch, so just add this code before any other and it will work:

AppContext.SetSwitch("Switch.System.Xml.IgnoreEmptyKeySequences", true);

More on this switch is available here: Mitigation: XML Schema Validation - note the sentence: "The impact of this change should be minimal" :-)

PS: I believe you can also change these switches using the proper .config file.