After adding the f prefix to :
<xsl:template match="body/*/f:is-heading(.)" priority="10">

<xsl:function name="f:is-heading" as="xs:boolean">
<xsl:param name="e" as="element()"/>
<xsl:sequence select="matches(local-name($e), 'h[1-9]')"/>
</xsl:function>

<xsl:template match="body">
<xsl:apply-templates select="* except (*[f:is-heading(.)]/following-sibling::*[1])"/>
</xsl:template>

<xsl:template match="body/*">
<xsl:copy-of select="."/>
</xsl:template>

<xsl:template match="body/*/is-heading(.)" priority="10">
<div>
<xsl:copy-of select=".|following-sibling::*[1]"/>
</div>
</xsl:template>

--
Matthieu Ricaud
IGS-CP
Service Livre numirique