After further investigation it looks like that the actual spec intent might have been option a) above; but still I could not find where is it described.

The underlying source of my confusion seems to be the fact that I cannot find the OptionSet (used in italics) defined anywhere. Either it is missing, or it is meant to always refer to OptionSet DataType - but in that case it would be incorrect at many places, because there are OptionSet-s not derived from the OptionSet DataType.

The issue thus better belongs to Part 3.

Discussed with Matthias. He suggests to extend the definition of OptionSet (which includes not just OptionSet DataType, but also OptionSet-s derived from UInteger) to OptionSet DataType chapter in Part 3. It should also refer to the DataType NodeClass where some of these definitions are already in the description of OptionSetValue property.

Below is a summary of where and how the option set is mentioned in the specs. The summary does not contain all references, but all relevant pieces should be there. I think the main problem is right at the beginning, with the formulation "...subtypes of UInteger representing an OptionSet". The OptionSet set is in italics, so it must be a term. It is not defined as a standalone term, so it probably refers to OptionSet DataType. But if so, then it is completely undefined how can subtypes of UInteger represent an OptionSet (a completely different DataType). My original understanding (as reflected in the Mantis issue description, which started from Part 14) was that if a UInteger represents an OptionSet, it should represent it in its entirety, that is, both its 'value' and 'validBits' parts. But it looks like that it does not: It is only the 'value' part, and the 'validBits' are assumed to be all '1'. The spec does not say it anywhere though. The second problem is that the fact that datatype A somehow "represents" B is fairly exceptional concept and should also be explained and not just left to guessing. I would see it more understandable if some term is introduced to cover both the "true" OptionSet (DataType) and the "fake" OptionSet-s based on UIntegers, and this term is then used when the general "idea" of option sets is meant. WIthout it, it is never clear when OptionSet is the actual DataType, or it can also be some UInteger.

Part 3:

5.8.3 DataType NodeClass

Table 16:
Explains that DataTypeDefinition attribute is mandatory for
"DataTypes derived from Enumeration, OptionSet and subtypes of UInteger representing an OptionSet. For such DataTypes, the Attribute contains a structure of the DataType EnumDefinition. The EnumDefinition DataType is defined in 8.50. It is a subtype of DataTypeDefinition."

OptionSetValues property:
"The OptionSetValues Property only applies for OptionSet DataTypes and UInteger DataTypes. An OptionSet DataType is used to represent a bit mask and the OptionSetValues Property contains the human-readable representation for each bit of the bit mask. The OptionSetValues Property provides an array of LocalizedText containing the human-readable representation for each bit. "

8.41 OptionSet

"This abstract DataType is the base DataType for all DataTypes representing a bit mask. All OptionSet DataTypes representing bit masks shall inherit from this DataType."
Table 33 follows, with OptionSet Definition having fields 'value' and 'validBits'.
"The DataType Nodes representing concrete subtypes of the OptionSet shall have an OptionSetValues Property defined in Table 16. "

8.50 EnumDefinition

This Structured DataType is used to provide the metadata for a custom Enumeration or OptionSet DataType. It is derived from the DataType DataTypeDefinition. The EnumDefinition is formally defined in Table 35.
{EnumField has 'value' and 'name'; 'value' is the bit number}

Part 4:

nothing

Part 5:

7.17 OptionSetType
{ this is a VariableType, an alternative to DataType OptionSet }

Part 6:

Part 14

6.2.2.1.3 FieldMetaData
builtInType: "(5) OptionSet DataTypes are either encoded as one of the concrete UInteger DataTypes or as an instance of an OptionSetType in an ExtensionObject.".

Added UInteger DataType to description of OptionSetValues

Agreed to changes in telecon.