The following scenarios produce incorrect results:

Scenario A
----------
<?xml version='1.0'?>
<xsl:stylesheet version="1.0"
  xmlns:xsl="http://www.w3.org/1999/XSL/Transform"    
  xmlns:ext="urn:test:ext"  
  extension-element-prefixes="ext">   

  <xsl:variable name="bar">
    <bar xmlns:ext="urn:test:ext"/>
  </xsl:variable>

  <xsl:template match="/">    
    <foo>
      <xsl:copy-of select="$bar"/>
    </foo>
  </xsl:template>

</xsl:stylesheet>

Expected result for XSLT 1.0/2.0 processors:
<foo><bar/></foo>

Current result of Libxslt:
<foo><bar xmlns:ext="urn:test:ext"/></foo>

Scenario B
----------
<?xml version='1.0'?>
<xsl:stylesheet version="1.0"
  xmlns:xsl="http://www.w3.org/1999/XSL/Transform"    
  xmlns:ext-literal="urn:test:ext"
  xmlns:ext-target="urn:test:ext"  
  extension-element-prefixes="ext-target">
  
  <xsl:namespace-alias stylesheet-prefix="ext-literal" result-prefix="ext-target"/>

  <xsl:template match="/">    
    <foo xmlns:ext="urn:test:ext"/>	
  </xsl:template>

</xsl:stylesheet>

Expected result for XSLT 1.0 processors:
<foo/>

Expected result for XSLT 2.0 processors:
<foo xmlns:ext="urn:test:ext" xmlns:ext-literal="urn:test:ext"
     xmlns:ext-target="urn:test:ext"/>

Current result of Libxslt:
<foo xmlns:ext="urn:test:ext" xmlns:ext-literal="urn:test:ext"/>