This is a bug in XmlSchema 1.3.x. We have a bug logged at apache to track it:
The good news is that XmlSchema 1.4 was just released this past weekend and it fixes it. However, 1.4 is not binary compatible with 1.3 so it's not a simple "drop in replacement" for 1.3. I'll be working to get CXF ported over to using 1.4 today.
The main cause of this is if you have jaxb beans that are declared "final". In general, if you take the final qualifier off the classes, it may work as jaxb won't generate the "extension restriction" attributes.