The xsltproc.exe installed by getgnuwin32 download/install tools is out of date and fails to start.
I worked around the issue by downloading
and installing the files included in these distributions manually.
Now xsltproc works.
Note: This issue was reported here (https://sourceforge.net/projects/gnuwin32/forums/forum/131144/topic/2706083) but it doesn't look like a bug was filed.