That's not a bug, but a known limitation, documented at http://mvp-xml.sourceforge.net/exslt/.
You see, the problem is that multioutput is implemented by postprocessig XSLT output by custom XmlWriter - MultiXmlTextWriter and .NET always inores disable-output-escaping when transforming to an XmlWriter.
And there is no easy workaround unfortunately.
What I can do is add a feature for mapping output characters like in XSLT2 (see http://www.w3.org/TR/2005/CR-xslt20-20051103/#element-output-character), say you can run
nxslt.exe ... ... -map "§" "&"
then in XSLT stylesheet you use § instead of & and at output it gets replaced by &.
What do you think? Ideas?
First: Sorry that I didn't replay imitate ...
Your proposal off adding an output character mapping sounds good and I think that would work for my problem.
So, can you do it?