I created a simple SVG file in Inkscape as a test, just with a black triangle.

I duplicated that.

I edited the first file and put an

<svg:image xlink:href="b.svg" width=20 height=20 x=10 y=10 />

element in. The 2nd file is rendered but blurry:

I'd understand if I had linked a raster image and rendered it too large, but this is an svg file!

Is there a way to stop Inkscape doing this (i.e. am I missing some important attribute or such) or is this a bug/poor implementation?

Here's the main SVG file:

<?xml version="1.0" encoding="UTF-8" standalone="no"?>
<svg
   xmlns:svg="http://www.w3.org/2000/svg"
   xmlns="http://www.w3.org/2000/svg"
   xmlns:xlink="http://www.w3.org/1999/xlink"
   version="1.1"
   viewBox="0 0 30 30"
   height="30mm"
   width="30mm">
  <g
     id="layer1">
    <path
       id="path1795"
       d="M 0,10 10,0 v 10 z"
       style="fill:#000000;fill-opacity:1;stroke:none;stroke-width:0.264583px;stroke-linecap:butt;stroke-linejoin:miter;stroke-opacity:1" />
    <image
       xlink:href="b.svg"
       id="image3039"
       x="10"
       y="10"
       width="20"
       height="20" />
  </g>
</svg>

(the other one is the same without the <svg:image> tag)