If you call a stylesheet that itself calls fn:transform that in turn, directly or indirectly, calls itself, we have a circularity dependency.

This may be intentional and cause a recursion that ends. It may indicate a failure and cause indefinite recursion.

I don't think there is any way this can be detected, esp. since the execution context is implementation dependent (or defined?). But I think it makes sense to add a little Note explaining that it is allowed and that infinite recursion may go undetected.