diff --git a/pyxform/survey.py b/pyxform/survey.py
index 4a43c3a8..19b69d06 100644
--- a/pyxform/survey.py
+++ b/pyxform/survey.py
@@ -1073,11 +1073,14 @@ def _var_repl_output_function(matchobj):
         # need to make sure we have reason to replace
         # since at this point < is &lt,
         # the net effect &lt gets translated again to &amp;lt;
-        if "{" in original_xml:
-            pass_1 = instance_expression.replace_with_output(original_xml, context, self)
-            pass_2 = re.sub(BRACKETED_TAG_REGEX, _var_repl_output_function, pass_1)
-            return pass_2, not pass_2 == original_xml
-        return text, False
+        xml_text = instance_expression.replace_with_output(original_xml, context, self)
+        if "{" in xml_text:
+            xml_text = re.sub(BRACKETED_TAG_REGEX, _var_repl_output_function, xml_text)
+        changed = xml_text != original_xml
+        if changed:
+            return xml_text, True
+        else:
+            return text, False
 
     # pylint: disable=too-many-arguments
     def print_xform_to_file(
diff --git a/tests/test_notes.py b/tests/test_notes.py
index 42ef2b06..9c8e24f9 100644
--- a/tests/test_notes.py
+++ b/tests/test_notes.py
@@ -104,6 +104,12 @@ def test_instance_expression__permutations(self):
                     "instance('c2')/root/item[contains(name, instance('c1')/root/item[name =  /test_name/q1 ]/label)]/label"
                 },
             ),
+            # Instance expression with predicate not using a pyxform token.
+            Case(
+                "instance('c1')/root/item[name = 'y']/label",
+                xpq.body_input_label_output_value("note"),
+                {"instance('c1')/root/item[name = 'y']/label"},
+            ),
         ]
         wrap_scenarios = ("{}", "Text {}", "{} text", "Text {} text")
         # All cases together in one.