You have two template rules that match verse. The XSLT spec is a bit ambivalent on this: it says that it's an error, but the processor doesn't have to report the error, it can recover by choosing the last rule that matches.
What you are trying to achieve is to process the verse twice. The way to do that is with a multi-phase transformation (a mini pipeline). Capture the result of the first transformation in a variable
<xsl:variable name="temp">
<xsl:apply-templates/>
</xsl:variable>
then apply templates to this, in a different mode:
<xsl:apply-templates select="$temp" mode="phase-2"/>
Only, in an XSLT 1.0 processor, you may have to call the vendor's xx:node-set() extension function to make this work:
<xsl:apply-templates select="xx:node-set($temp)" mode="phase-2"/>
where the namespace bound to xx depends on the XSLT processor you are using.
Michael Kay
http://www.saxonica.com/
Author, XSLT Programmer's Reference and XPath 2.0 Programmer's Reference