This is very easy to demonstrate and is pretty bad. If you accidentally specify an empty string as the second argument to str:replace, xsltproc (or whatever you are using for the transformation) will just hang.

Try my test XSL below:

$ ./xsltproc --version
Using libxml 20707, libxslt 10126 and libexslt 815
xsltproc was compiled against libxml 20707, libxslt 10126 and libexslt 815
libxslt 10126 was compiled against libxml 20707
libexslt 815 was compiled against libxml 20707

$ cat ~/testloop.xsl
<?xml version="1.0" ?>
<xsl:stylesheet version="1.0"
  xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
  xmlns:str="http://exslt.org/strings"
>
<xsl:template match="/*">
  <xsl:variable name="loop-replace" select="str:replace('foo', '', 'baz')" />
</xsl:template>
</xsl:stylesheet>

$ ./xsltproc ~/testloop.xsl ~/testloop.xsl
^C