<iframe> works if its "shadow-host-including inclusive ancestor" is a document that has a browsing context. I.e., including when it does not end up in the flattened tree.

<iframe> has a couple of major pain points when used in a shadow tree:

• History API: <iframe> and the History API WICG/webcomponents#184 (Should probably simply not work, should the method calls simply be ignored or throw? If it does not work however this makes Shadow DOM less useful for composition.)
• Named properties on the Window object: <iframe> and Window's named properties WICG/webcomponents#145 These should probably not dig into the shadow tree, but that will require adjustments to various definitions around browsing contexts.
• Link targeting. Presumably <a href=test target=test> should not cross boundaries.
• "allowfullscreen" should the shadow root also explicitly opt into this?
• inertness: a browsing context container being inert causes all of the elements "in its Document" to be inert. It should instead be all elements connected to that document.

Paging @hayatoito @smaug---- @rniwa.