XSLT problem raised by Michael Müller-Hillebrand on Mulberry’s xsl-list on 2020-05-03

input.xml

<?xml version="1.0" encoding="UTF-8"?>
  <div>
    <h2 id="E2">Item with content to be joined follows div to collect</h2>
    <div>
      <ol data-meta="listlevel=start">
        <li>
          <p>1st item</p>
        </li>
      </ol>
      <div class="box" data-meta="collect">
        <p>Hint</p>
      </div>
      <ol data-meta="listlevel=continue">
        <li data-meta="listitem=continue">
          <p>Para ff</p>
        </li>
        <li>
          <p>2nd item</p>
        </li>
      </ol>
      <p>Other arbitrary content</p>
    </div>
  </div>

join-list-fragments.xsl

<?xml version="1.0" encoding="UTF-8"?>
<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform" version="3.0"
  xmlns:my="http://localhost/" 
  xmlns:xs="http://www.w3.org/2001/XMLSchema" 
  exclude-result-prefixes="my xs">
  <xsl:mode on-no-match="shallow-copy"/>
  
  <xsl:template match="*[ol[@data-meta = 'listlevel=start']]">
    <xsl:copy>
      <xsl:apply-templates select="@*"/>
      <!-- named template: then you can call it recursively for lower list levels
           (not used here) -->
      <xsl:call-template name="collect">
        <!-- We are grouping a) the list *items* in both special list types and
          b) any other children of the current div. These a) and b) nodes are
        returned by my:atomic-items() in document order: -->
        <xsl:with-param name="nodes" select="my:atomic-items(.)"/>
      </xsl:call-template>
    </xsl:copy>
  </xsl:template>
  
  <xsl:function name="my:atomic-items" as="node()*">
    <xsl:param name="context" as="element()"/>
    <xsl:variable name="special-lists" as="element(ol)*"
      select="$context/(ol[@data-meta = ('listlevel=start', 'listlevel=continue')])" />
    <xsl:sequence 
      select="$context/* except $special-lists | $special-lists/li"/>
  </xsl:function>
  
  <xsl:template name="collect">
    <xsl:param name="nodes" as="node()*"/>
    <!-- First grouping: Start with 
      ol[@data-meta = 'listlevel=start']/li[1] -->
    <xsl:for-each-group select="$nodes" 
      group-starting-with="li[parent::ol[@data-meta = 'listlevel=start']]
                             [. is ../*[1]]">
      <xsl:choose>
        <!-- The first group can, in principle, start with any other node 
          that precedes the actual first list starting item. Such an 
          uninteresting initial group will be processed in otherwise. -->
        <xsl:when test="parent::ol[@data-meta = 'listlevel=start']">
          <!-- This is a grouping that may result in at most two groups:
            The current list and anything non-collected and non-continuing
            that might come after it (<p>Other arbitrary content</p>): --> 
          <xsl:for-each-group select="current-group()" 
            group-adjacent="exists(self::li) 
                            or 
                            @data-meta = 'collect'">
            <xsl:choose>
              <xsl:when test="current-grouping-key()">
                <!-- We re-create the surrounding ol: -->
                <ol>
                  <!-- The context element is the first li 
                    in an ol[@data-meta = 'listlevel=start'] --> 
                  <xsl:copy-of select="../@data-meta"/>
                  <xsl:for-each-group select="current-group()" 
                    group-starting-with="li[not(@data-meta = 
                                                'listitem=continue')]">
                    <!-- Create a new li: --> 
                    <xsl:copy>
                      <xsl:copy-of select="@data-meta"/>
                      <xsl:apply-templates 
                        select="  current-group()/self::li/node() 
                                | current-group()[empty(self::li)]"/>
                    </xsl:copy>
                  </xsl:for-each-group>
                </ol>
              </xsl:when>
              <xsl:otherwise>
                <xsl:apply-templates select="current-group()"/>
              </xsl:otherwise>
            </xsl:choose>
          </xsl:for-each-group>
        </xsl:when>
        <xsl:otherwise>
          <xsl:apply-templates select="current-group()"/>
        </xsl:otherwise>
      </xsl:choose>
    </xsl:for-each-group>
  </xsl:template>
  
</xsl:stylesheet>

output.xml

<?xml version="1.0" encoding="UTF-8"?>
<div>
  <h2 id="E2">Item with content to be joined follows div to collect</h2>
  <div>
    <ol data-meta="listlevel=start">
      <li>
        <p>1st item</p>
        <div class="box" data-meta="collect">
          <p>Hint</p>
        </div>
        <p>Para ff</p>
      </li>
      <li>
        <p>2nd item</p>
      </li>
    </ol>
    <p>Other arbitrary content</p>
  </div>
</div>