Can we get some examples on yang library module, as part of YANG 1.1 support ?
Is it allowed to provide a list of module-sets as part of yang library ?
One library module for release common features
additional library module with specific device modules (e.g. deviation files)
Can we place also NETCONF supported capabilities as part of the library module ?
Assuming that you use the ietf-yang-library.fxs file shipped with ConfD, the data for it is already provided by a ConfD-internal data provider based on the loaded modules - since it is, indeed, a mandatory part of the YANG 1.1 support that ConfD provides. Try e.g. netconf-console --get -x /modules-state.
How you organize the contents of your YANG modules is up to you, as long as they follow the YANG spec - but I can’t see that RFC 7895 allows for any “creativity” in how the ietf-yang-library model is populated for a given set of YANG modules.