Thanks, Alexander and everybody for your remarks and observations.

As it happens, in the meantime I've found the reason: it is the boundary-space policy, which can either be "preserve" or "strip" and which a boundary-space declaration of the prolog can explicitly choose (overriding the implementation-defined default) [1]. Therefore:

declare boundary-space preserve;
serialize(<e> </e>)

yiels

<e> </e>

as it should, hurray! One of so many opportunities to note the high quality of BaseX which honours such a rather obscure declaration.

The XQuery spec also states explicitly that xml:space has no effect in this context (from [2]):

"Element constructors treat attributes named xml:space as ordinary attributes. An xml:space attribute does not affect the handling of whitespace by an element constructor."

So BaseX is doing just the right thing.

Everything is fine!

Cheers,

Hans-Jürgen

PS: For the interest, here the definition of boundary-whitespace ([2]):

[Definition: Boundary whitespace is a sequence of consecutive whitespace characters within the content of a direct element constructor, that is delimited at each end either by the start or end of the content, or by a DirectConstructor, or by an EnclosedExpr. For this purpose, characters generated by character references such as   or by CDataSections are not considered to be whitespace characters.]

[1] https://www.w3.org/TR/xquery-31/#id-boundary-space-decls

[2] https://www.w3.org/TR/xquery-31/#id-whitespace