Here is an example to use an XSLT 3 processor supporting xsl:evaluate (https://www.w3.org/TR/xslt-30/#dynamic-xpath) (i.e. Saxon 9.8 or later with the commercial PE or EE editions or Altova 2017 or later) to process your "config" file:
<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
xmlns:xs="http://www.w3.org/2001/XMLSchema"
xmlns:map="http://www.w3.org/2005/xpath-functions/map"
xmlns:mf="http://example.com/mf"
exclude-result-prefixes="#all"
version="3.0">
<xsl:param name="config-url" as="xs:string">test2018121301.xml</xsl:param>
<xsl:param name="config-doc" select="doc($config-url)"/>
<xsl:mode on-no-match="shallow-copy"/>
<xsl:key name="element" match="*" use="node-name()"/>
<xsl:function name="mf:config-evaluation" as="item()*">
<xsl:param name="config-doc" as="document-node()"/>
<xsl:param name="element-name" as="xs:QName"/>
<xsl:variable name="display" select="key('element', $element-name, $config-doc)/DisplayName"/>
<xsl:evaluate xpath="$display/regex" with-params="map:merge($display!(* except regex)!map { QName('', local-name()) : string() })"/>
</xsl:function>
<xsl:template match="*[key('element', node-name(), $config-doc)]">
<xsl:copy>
<xsl:value-of select="mf:config-evaluation($config-doc, node-name()), ."/>
</xsl:copy>
</xsl:template>
</xsl:stylesheet>
So with a config.xml
<Location >
<DisplayName>
<Attribute1>ABC</Attribute1>
<Attribute2>XYZ</Attribute2>
<regex>concat($Attribute1,$Attribute2)</regex>
</DisplayName>
</Location >
this would transform an input sample with e.g.
<Root>
<Items>
<Item>
<Data>data 1</Data>
<Location>location 1</Location>
</Item>
<Item>
<Data>data 2</Data>
<Location>location 2</Location>
</Item>
</Items>
</Root>
into
<Root>
<Items>
<Item>
<Data>data 1</Data>
<Location>ABCXYZ location 1</Location>
</Item>
<Item>
<Data>data 2</Data>
<Location>ABCXYZ location 2</Location>
</Item>
</Items>
</Root>
That gives you a great flexibility to allow XPath expressions in the configuration files but as pointed out in https://www.w3.org/TR/xslt-30/#evaluate-effect, also is a security problem: "Stylesheet authors need to be aware of the security risks associated with the use of xsl:evaluate. The instruction should not be used to execute code from an untrusted source.".
As for using the saxon:evaluate function supported in older versions of Saxon not supporting the XSLT 3 xsl:evaluate instruction, a simple example is
<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
xmlns:xs="http://www.w3.org/2001/XMLSchema"
xmlns:saxon="http://saxon.sf.net/"
exclude-result-prefixes="#all"
version="2.0">
<xsl:template match="@* | node()">
<xsl:copy>
<xsl:apply-templates select="@* | node()"/>
</xsl:copy>
</xsl:template>
<xsl:template match="example">
<xsl:copy>
<xsl:value-of select="saxon:evaluate(@expression, @foo, @bar)"/>
</xsl:copy>
</xsl:template>
</xsl:stylesheet>
which transforms the input
<root>
<example expression="concat($p1, $p2)" foo="This is " bar="an example."/>
<example expression="replace(., $p1, $p2)" foo="\p{L}" bar="X">This is example 2.</example>
</root>
into the result
<root>
<example>This is an example.</example>
<example>XXXX XX XXXXXXX 2.</example>
</root>
regexattribute, instead it seems an XPath expression, a call to theconcatfunction with two variable or parameter references as the arguments toconcat. It is not clear why you need that instead of just using normal parameters or variables for the stylesheet or in a separate stylesheet module, but in general if you need some dynamic evaluation or generation and execution of code a move to XSLT 3 can help where you have various options like shadow attributes, thetransformfunction plusxsl:evaluate(if supported) to solve such problems. - Martin Honnenxsl:evaluate, that's the only way and Saxon supports this. But if I am using<xsl:template match="/"> <xsl:message> VALUE is = <xsl:value-of select="saxon:evaluate($regex)"/> </xsl:message> </xsl:template>, I am getting the following error - Static error in XPath expression supplied to saxon:evaluate: Undeclared variable in XPath expression: $Attribute1 - Nirmalyaxsl:evaluateelement. In earlier versions there is support for an extension functionsaxon:evaluate. - Martin Honnen