The presence of the attribute "as" determines whether the value of
the variable is evaluated to a sequence or a temporary tree

[snip]

Ah.... thanks for the explanation. That clears up a lot :-)

It's worth adding the when you do as="element()+" the elements
represented by that variable aren't siblings because they don't have a
common parent.

<xsl:variable name="foo" as="element()+">
  <a/>
  <b/>
</xsl:variable>

here a/following-sibling::b returns false

...so it's worth bearing that in mind when deciding what the as
attribute should be.

<xsl:variable name="foo" as="document-node()">
  <a/>
  <b/>
</xsl:variable>