Perhaps this isn't a bug per se, but behaviour is different than other 
XSLT engines.

In the below, although not required, the expected output would be:
<P></P>
<P>para</P>

Instead libxslt returns:
<P>
<P>para</P>
without the closure of the empty <P>.

Thanks again Daniel!
Jon 
-------------------------------
<?xml version="1.0"?>
<xsl:stylesheet version="1.0" 
xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:output method="html" indent="yes" omit-xml-declaration="yes"/>
<xsl:template match="/">
<P></P>
<P>para</P>
</xsl:template>
</xsl:stylesheet>