Since you don't know what kind of message arrived to backout queue, you should not parse it with specific parsers (like XMLNSC etc). Probably the more generic params you will set on MQInput, the better you will do further down the flow to determine what's inside the message.
So, I would start with default Message domain (BLOB) and leave other params untouched as well. Connect some logging node (e.g. Trace node) to Catch and Failure terminals. Connect Out terminal to a Compute node which includes ESQL to determine error type and decide on further actions (e.g. route to label). Then in each label decide what part of the message should be mapped to final exception message and to the mapping.
If you need those MQMD properties of the message currently in backout queue in your resulting message, just extract the values and put/concatenate/whatever to resulting message XML part. I don't think you should copy MQMD (and other) headers to result message as is, because these might be the reason why original message got into backout queue and your resulting message will get there again. Construct resulting message headers from scratch.
If something bad happens while doing these transformations, you will see the problem in Trace. Then modify error handling logic appropriately to avoid mishandling in the future.
