As far as I know XSLT-1.0 does not say anything about xml:base
(and for a good reason it went to REC years before xml:base !).
So any xml:base processing you can expect from libxslt has to come
from explicit template, I don't see this being defined in
inline-rdf.xsl . I don't really have the time to dig out what
is really happening, I suggest you use xsltproc -v to see
what is going on and provide a specific test case exhibiting
the problem with xsltproc. Or explain what is not working more
precisely.

  thanks,

Daniel

C:\>xsltproc -v http://www.w3.org/2003/g/inline-rdf.xsl  http://www.w3.org/2001/sw/grddl-wg/td/inline-rdf5.xml

inline-rdf.xml
<embedded  
   xml:base="http://example.org/"
   xmlns:data-view="http://www.w3.org/2003/g/data-view#" 
   data-view:transformation="http://www.w3.org/2003/g/inline-rdf.xsl">
    <a>
      <b/>
      <rdf:RDF xmlns:rdf="http://www.w3.org/1999/02/22-rdf-syntax-ns#">
	    <rdf:Description rdf:about="" rdf:value="one"/>
      </rdf:RDF>
    </a>
</embedded>

Should produce:
<rdf:RDF
    xmlns:rdf="http://www.w3.org/1999/02/22-rdf-syntax-ns#"
    xmlns:data-view="http://www.w3.org/2003/g/data-view#">
  <rdf:Description rdf:about="" 
   xml:base="http://example.org/">
    <rdf:value>one</rdf:value>
  </rdf:Description>
</rdf:RDF>

By:
Applying xa:base-and-lang
... and then calling the template xa:base
... which should apply xa:base-sub-template


I believe its getting this test wrong, and therefor not applying xa:base-sub-template (Approx line 155 of output):

xsltIf: test $node/ancestor-or-self::*[/xhtml:html or position()!=last()][@xml:base]                   or $node-used-by-ancestor/ancestor-or-self::*[/xhtml:html or position()!=last()][@xml:base]
Lookup variable 'node'
Lookup variable 'node-used-by-ancestor'
xsltIf: test evaluate to 0


See template xa:base
http://www.w3.org/2003/g/xml-attributes# (Line 431)

Output:
C:\>xsltproc -v http://www.w3.org/2003/g/inline-rdf.xsl  http://www.w3.org/2001/sw/grddl-wg/td/inline-rdf5.xml
creating dictionary for stylesheet
reusing dictionary from http://www.w3.org/2003/g/inline-rdf.xsl for stylesheet
xsltParseStylesheetProcess : found stylesheet
xsltPrecomputeStylesheet: removing ignorable blank node
Reusing dictionary for document
creating dictionary for stylesheet
reusing dictionary from http://www.w3.org/2003/g/xml-attributes for stylesheet
xsltParseStylesheetProcess : found stylesheet
xsltPrecomputeStylesheet: removing ignorable blank node
xsltParseStylesheetTop : found foreign element html
Registering global variable use-xml-base-in-xhtml
Defining global variable use-xml-base-in-xhtml
Registering global variable default-node-used-by-ancestor
Defining global variable default-node-used-by-ancestor
template has 3 inherited namespaces
template has 3 inherited namespaces
template has 3 inherited namespaces
template has 3 inherited namespaces
template has 3 inherited namespaces
template has 3 inherited namespaces
template has 3 inherited namespaces
xsltParseTemplateContent: removing text
template has 3 inherited namespaces
template has 3 inherited namespaces
xsltParseTemplateContent: removing text
parsed 9 templates
Registering global variable use-xml-base-in-xhtml
Defining global variable use-xml-base-in-xhtml
xsltParseStylesheetTop : found foreign element html
template has 3 inherited namespaces
xsltCompilePattern : parsing '/'
xsltCompilePattern : parsed /, default priority 0.500000
added pattern : '/' priority 0.500000
template has 3 inherited namespaces
xsltCompilePattern : parsing 'rdf:RDF'
xsltCompilePattern : parsed rdf:RDF, default priority 0.000000
added pattern : 'rdf:RDF' priority 0.000000
template has 3 inherited namespaces
xsltParseStylesheetTemplate: mode rdfTopLevel
xsltCompilePattern : parsing '*'
xsltCompilePattern : parsed *, default priority -0.500000
added pattern : '*' mode 'rdfTopLevel' priority 1.000000
template has 3 inherited namespaces
xsltCompilePattern : parsing 'text()'
xsltCompilePattern : parsed text(), default priority -0.500000
xsltCompilePattern : parsing '@*'
xsltCompilePattern : parsed @*, default priority -0.500000
added pattern : 'text()' priority -0.500000
added pattern : '@*' priority -0.500000
parsed 4 templates
Resolving attribute sets references
Creating sub-dictionary from stylesheet for transformation
Registered 0 modules
reusing transformation dict for output
Registering global variables
Registering global variables from http://www.w3.org/2003/g/inline-rdf.xsl
Registering global variables from http://www.w3.org/2003/g/xml-attributes
Evaluating global variable default-node-used-by-ancestor
Lookup variable 'use-xml-base-in-xhtml'
Evaluating global variable use-xml-base-in-xhtml
Object is a Boolean : true
found variable 'use-xml-base-in-xhtml'
Object is a Node Set :
Set contains 1 nodes:
1  ELEMENT embedded
    namespace data-view href=http://www.w3.org/2003/g/data-view#
    ATTRIBUTE base
      TEXT
        content=http://example.org/
    ATTRIBUTE transformation
      TEXT
        content=http://www.w3.org/2003/g/inline-rdf.xsl
xsltProcessOneNode: applying template '/' for /
xsltApplySequenceConstructor: copy node RDF
xsltApplyTemplates: list of 2 nodes
xsltProcessOneNode: no template found for comment
xsltProcessOneNode: no template found for embedded
xsltDefaultProcessOneNode: applying template for text

xsltProcessOneNode: no template found for a
xsltDefaultProcessOneNode: applying template for text

xsltProcessOneNode: no template found for b
xsltDefaultProcessOneNode: applying template for text

xsltProcessOneNode: applying template 'rdf:RDF' for RDF
xsltApplyTemplates: node: 'RDF'
xsltApplyTemplates: select *
xsltApplyTemplates: list of 1 nodes
xsltProcessOneNode: applying template '*' for Description
xsltCopy: node Description
xsltCopyOf: select @*
xsltCopyOf: result is a node set
call-template: name base-and-lang
applying xsl:template 'base-and-lang'
Registering param node
Building variable node select current()
Evaluating variable 'node'
Object is a Node Set :
Set contains 1 nodes:
1  ELEMENT rdf:Description
    ATTRIBUTE about
      TEXT
        content=
    ATTRIBUTE value
      TEXT
        content=one
Registering param node-used-by-ancestor
Building variable node-used-by-ancestor select $xa:default-node-used-by-ancestor

Evaluating variable 'node-used-by-ancestor'
Lookup variable 'default-node-used-by-ancestor'
found variable 'default-node-used-by-ancestor'
Object is a Node Set :
Set contains 1 nodes:
1  ELEMENT embedded
    namespace data-view href=http://www.w3.org/2003/g/data-view#
    ATTRIBUTE base
      TEXT
        content=http://example.org/
    ATTRIBUTE transformation
      TEXT
        content=http://www.w3.org/2003/g/inline-rdf.xsl
call-template: name base
Handling xsl:with-param node
        select $node
Building variable node select $node
Evaluating variable 'node'
Lookup variable 'node'
Object is a Node Set :
Set contains 1 nodes:
1  ELEMENT rdf:Description
    ATTRIBUTE about
      TEXT
        content=
    ATTRIBUTE value
      TEXT
        content=one
Handling xsl:with-param node-used-by-ancestor
        select $node-used-by-ancestor
Building variable node-used-by-ancestor select $node-used-by-ancestor
Evaluating variable 'node-used-by-ancestor'
Lookup variable 'node-used-by-ancestor'
Object is a Node Set :
Set contains 1 nodes:
1  ELEMENT embedded
    namespace data-view href=http://www.w3.org/2003/g/data-view#
    ATTRIBUTE base
      TEXT
        content=http://example.org/
    ATTRIBUTE transformation
      TEXT
        content=http://www.w3.org/2003/g/inline-rdf.xsl
applying xsl:template 'base'
xsltIf: test not(/xhtml:html) or $xa:use-xml-base-in-xhtml
xsltIf: test evaluate to 1
xsltIf: test $node/ancestor-or-self::*[/xhtml:html or position()!=last()][@xml:base]                   or $node-used-by-ancestor/ancestor-or-self::*[/xhtml:html or position()!=last()][@xml:base]
Lookup variable 'node'
Lookup variable 'node-used-by-ancestor'
xsltIf: test evaluate to 0
call-template returned: name base
call-template: name lang
Handling xsl:with-param node
        select $node
Building variable node select $node
Evaluating variable 'node'
Lookup variable 'node'
Object is a Node Set :
Set contains 1 nodes:
1  ELEMENT rdf:Description
    ATTRIBUTE about
      TEXT
        content=
    ATTRIBUTE value
      TEXT
        content=one
applying xsl:template 'lang'
xsltIf: test $node/ancestor-or-self::*[@xml:lang] or not(/xhtml:html)
Lookup variable 'node'
xsltIf: test evaluate to 1
xsltIf: test $node/ancestor-or-self::*[@xml:lang]
Lookup variable 'node'
xsltIf: test evaluate to 0
xsltIf: test /xhtml:html and not($node/ancestor-or-self::*[@xml:lang])
xsltIf: test evaluate to 0
call-template returned: name lang
call-template returned: name base-and-lang
xsltCopyOf: select node()
xsltCopyOf: result is a node set
xsltDefaultProcessOneNode: applying template for text

xsltDefaultProcessOneNode: applying template for text

freeing transformation dictionary
freeing dictionary from stylesheet
freeing dictionary from stylesheet

C:\>

GNOME is going to shut down bugzilla.gnome.org in favor of gitlab.gnome.org.
As part of that, we are mass-closing older open tickets in bugzilla.gnome.org
which have not seen updates for a longer time (resources are unfortunately
quite limited so not every ticket can get handled).

If you can still reproduce the situation described in this ticket in a recent
and supported software version, then please follow
  https://wiki.gnome.org/GettingInTouch/BugReportingGuidelines
and create a new ticket at
  https://gitlab.gnome.org/GNOME/libxslt/-/issues/

Thank you for your understanding and your help.