XSLT is an absolute horror and not something I would want to deal with again. It feels like some weird academic experiment in an XML declarative programming language that should never have made it to print.
If something needs the flexibility of a programming language, why not use a real one that's been well tested for writing other programs? These various config file programming systems always end up creating something notorious that everyone tries to avoid having to work on.
XQuery is, in many ways, XSLT with better syntax. It doesn't have the pattern-matching transforms that are the T in XSLT - but for configs, I don't think it makes a big difference.
Also, I don't think many realize that the stack has evolved since early 00s. XSLT 1.0 was a very limiting language, requiring extensions for many advanced scenarios. But there's XSLT v3.0 these days, and XPath & XQuery v3.1, with some major new features - e.g. maps and lambdas. Granted, this doesn't fix the most basic complaint about XSLT - its insanely verbose syntax - but even then, I'd still take XSLT over ad-hoc YAML-based loops and conditionals.
If something needs the flexibility of a programming language, why not use a real one that's been well tested for writing other programs? These various config file programming systems always end up creating something notorious that everyone tries to avoid having to work on.