[...] try using the identity template with an indent="yes" as an
attribute of the xsl:stylesheet element.

That was wrong, @indent is an attribute of xsl:output, not
xsl:stylesheet. Here's the correct stylesheet:

<?xml version="1.0"?>
<xsl:transform version="1.0"
  xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
  <xsl:output indent="yes"/>
  <xsl:template match="/">
    <xsl:apply-templates select="node() | @*"/>
  </xsl:template>
  <xsl:template match="node() | @*">
    <xsl:copy>
      <xsl:apply-templates select="node() | @*"/>
    </xsl:copy>
  </xsl:template>
</xsl:transform>