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Per the current version of https://developer.chrome.com/docs/web-platform/deprecating-x..., by August 17, 2027, XSLT support is removed from Chrome Enterprise. That means even Chrome's enterprise-targeted, non-general-web browser is going to lose support for XSLT.
Surprisingly, the "hyperlinked documents" structure was universal enough to allow rudimentary interactive web applications like shops or reservation forms. The web became useful to commerce. At first, interactive functionality was achieved by what amounted to hacks: nav blocks repeated at every page, frames and iframes, synchronous form submissions. Of course, web participants pushed for more direct support for application building blocks, which included Javascript, client-side templates, and ultimately Shadow DOM and React.
XSLT is ultimately a client-side template language too (can be used at the server side just as well, of course). However, this is a template language for a previous era: non-interactive web of documents (and it excels at that). It has little use for the current era: web of interactive applications.
If you can use it to generate HTML, you can use it to generate an interactive experience.