Spec says:

ExpandedName ::= '{' Namespace '}' LocalName
where
Namespace ::= EmptyString | Uri

So "{}foo" is an expanded form with empty ns uri but also is a local name, cause "{" and "}" are valid chars NT-chars (http://www.w3.org/TR/xml/#NT-Char)

And there is still a question how would Jackrabbit 2.0 recognize path like /{}foo/  ? ;)