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I figured out what the issue was. I was using xsltproc from the commandline, xsltproc that came bundled with my new iMac. It seems like its a old version of xsltproc and it was not producing the correct results. I also use oXygen XML editor and this produced a different result than xsltproc on the command line as oXygen had newer versions of the XSLT processors installed.
Which lead me to download a copy of Saxon 9 home edition jar file which when run produced the correct result.