And a lot of that "badness" is precisely that XSLT is a very closed, scarcity-minded language where basic library and language features have to be routed through a standards committee (you think it's hard to get a new function into Python's or Go's standard library?), when all you really need is an XPath library and any abundance-mindset language you can pick up, where if you need something like "regular expression" support you can just go get a library. Or literally anything else you may need to process an XML document, which is possibly anything. Which is why a general-purpose language is a good fit.
That "What's New In XSLT 3.0" is lunatic nonsense if you view it through the lens of being a programming language. What programming language gets associative arrays after 18 years? And another 8 years after that you still can't really count on that being available?
Programming languages tend to have either success feed success, or failure feed failure. Once one of those cascades start it's very difficult to escape from them. XSLT is pretty firmly in the latter camp, probably kept alive only by the fact it's a standard and that still matters to some people. It's frozen because effectively nobody cares, because it's frozen, because nobody cares.
I definitely recommend putting XPath in your toolbelt if you have to deal with XML at all though.