Thanks to Mikael Erikssen that replied to me on stack overflow forum.

A solution to this issue is to remove the restriction on my Boolean attribute and probably more important only use true() or false() function to test or set the attribute as follow:

-- XSD :

<xs:attribute type="xs:boolean" name="Deleted" use="required" />

-- Update

UPDATE @XmlTest

SET MyContent.modify('replace value of (/Root/MyNode[@Code="AAA" and @Deleted=false()]/@Deleted)[1] with true()')

WHERE ID = 1