I would rather that they introduced support for v3, as that would make it easier to serving static webpages with native support for templating.
What exactly is the difference between generating HTML using the browser's XLST 1.0 runtime and SaxonJS's XLST 3.0 runtime? Before you say the goal is to not have to deal with JS, then you've already accomplished that goal. You don't need to touch NPM, webpack, React, JSX, etc.
Blocking first party JS is lunacy by the way.
It might not scale for larger businesses, but for regular people on the web who just want to put something out in the world and have minimal churn keeping it up, it can have great value!
Several hundred kB (compressed) of runtime, for one. It could make sense for browsers to have something like that built-in like they did with pdf.js, though Saxon is proprietary so it would not be that thing.