Thanks Martin. Nearly there

<xsl:param name="types" as="xs:string"/>

If you declare the type as a single string item, then it doesn't make
sense to attempt to use the "?param-name" syntax further below to pass
in an XPath expression evaluating to a sequence of strings.

as="xs:string"

and

types=A,B

and

test="type = tokenize($types, ',')"

Produces an earlier message (a weak one from Saxon!)
  No line number, just 'The context item is absent'

Closer...