ORA-31011: XML parsing failed on function condition - oracle

Question

On a client's database (which I do not have physical access to) we are getting some strange results when joining to a function.
I was able to guide them to replicate the issue on a completely new schema within the same database.
create or replace function GEN_FILENAME(p_file_name varchar2) return varchar2
is
l_filename varchar2(100);
begin
l_filename := 'Test' || '/' || 'Test' || '.' || initcap(p_file_name) || '.txt';
return l_filename;
end GEN_FILENAME;
/
The function generates the following error if I use equals on a join, but is fine when I use a sub select for the function.
ORA-00604: error occurred at recursive SQL level 1
ORA-31011: XML parsing failed
ORA-19213: error occurred in XML processing at lines 1
LPX-00007: unexpected end-of-file encountered
00604. 00000 - "error occurred at recursive SQL level %s"
*Cause: An error occurred while processing a recursive SQL statement
(a statement applying to internal dictionary tables).
*Action: If the situation described in the next error on the stack
-- this query does not work
select dt.file_name,
GEN_FILENAME(dt.file_name) as file_name,
mf.file_path
from ( select 'Test' FOLDER,
'Test' AREA,
'File_Name' FILE_NAME,
systimestamp LAST_MODIFIED
from dual
) dt
left outer join (select 'Test/Test.File_Name.txt' file_path from dual) mf on mf.file_path = GEN_FILENAME(dt.file_name);
-- this query is working
select dt.file_name,
GEN_FILENAME(dt.file_name) as file_name,
mf.file_path
from ( select 'Test' FOLDER,
'Test' AREA,
'File_Name' FILE_NAME,
systimestamp LAST_MODIFIED
from dual
) dt
left outer join (select 'Test/Test.File_Name.txt' file_path from dual) mf on mf.file_path = (select GEN_FILENAME(dt.file_name) from dual);
I have seen other odd issues as well. I have asked them to gather statistics of the tables in the schema.
begin
for i in (select TABLE_NAME from USER_TABLES) loop
--Gather Table Statistics
sys.dbms_stats.gather_table_stats ( ownname => 'TEST', tabname => i.TABLE_NAME, cascade => true);
end loop;
end;
/
This resulted in the following error:
ORA-20000: Unable to analyze TABLE "TEST"."LOGMNR_SESSION_EVOLVE$", insufficient privileges or does not exist
ORA-06512: at "SYS.DBMS_STATS", line 40751
ORA-06512: at "SYS.DBMS_STATS", line 40024
ORA-06512: at "SYS.DBMS_STATS", line 40183
ORA-06512: at "SYS.DBMS_STATS", line 40732
ORA-06512: at line 5
ORA-06512: at line 5
I think this is all related, but I have never seen this type of issues before.
Any ideas?