If you're documenting a large XML construct, the content of each fragment must be properly nested.
You might be tempted to document a template this way:
<p>The template preamble...</p>
<src:fragment id="xpath.location">
<xsl:template name="xpath.location">
<xsl:param name="node" select="."/>
<xsl:param name="path" select="''"/>
<xsl:variable name="next.path">
<xsl:value-of select="local-name($node)"/>
<xsl:if test="$path != ''">/</xsl:if>
<xsl:value-of select="$path"/>
</xsl:variable>
<src:fragref linkend="xpath.location.body"/></src:fragment>
<p>The body of the template...</p>
<src:fragment id="xpath.location.body">
<xsl:choose>
<xsl:when test="$node/parent::*">
<xsl:call-template name="xpath.location">
<xsl:with-param name="node" select="$node/parent::*"/>
<xsl:with-param name="path" select="$next.path"/>
</xsl:call-template>
</xsl:when>
<xsl:otherwise>
<xsl:text>/</xsl:text>
<xsl:value-of select="$next.path"/>
</xsl:otherwise>
</xsl:choose>
</xsl:template>
</src:fragment>