Upgrade to 9.2.0.6 produced the same results:
 
<trace saxon-version="9.2.0.6" xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
 <source node="/test" line="1" file="test.xml">
 </source><!-- /test -->
 <source node="/test/hello[1]" line="2" file="test.xml">
 </source><!-- /test/hello[1] -->
</trace>
<trace saxon-version="9.2.0.6" xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
 <source node="/test" line="1" file="test.xml">
 </source><!-- /test -->
 <source node="/test/hello[1]" line="2" file="test.xml">
 </source><!-- /test/hello[1] -->
</trace>
 
Researching setCompileWithTracing() now...