xslt/pass3.xsl

<xsl:stylesheet version="3.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform" 
                xmlns:saxon="http://saxon.sf.net/"
                exclude-result-prefixes="saxon">
    
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                doctype-public="-//IDS//DTD IDS-I5 1.0//EN"
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    <xsl:mode streamable="yes" on-no-match="shallow-copy"/> 
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    <!-- <xsl:template match="idsText[not(normalize-space(.//body))]"/>-->

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        <p>
            <xsl:apply-templates mode="no-Streaming"/>
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    <xsl:template match="(ref|emph|hi|text())[parent::div]" priority="0.9" mode="no-Streaming">
        <p>
            <xsl:apply-templates mode="no-Streaming"/>
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        <xsl:apply-templates mode="no-Streaming"/>
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    <xsl:template match="p/p" mode="no-Streaming">
        <xsl:apply-templates mode="no-Streaming"/>
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    <xsl:template match="hi[local-name(preceding-sibling::*[1]) = 'hi' and @rend = preceding-sibling::hi[1]/@rend]" mode="no-Streaming"/>

    <xsl:template match="hi[following-sibling::hi and not(preceding-sibling::hi)]" mode="no-Streaming">
        <xsl:variable name="rend" select="@rend"/>
        <hi rend="{$rend}">
            <xsl:for-each-group select="self|following-sibling::hi" group-adjacent="@rend=$rend">
                <xsl:value-of select="current-group()"/>
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        </hi>
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</xsl:stylesheet>