Error on xsl variable setting via xpath condition - Flattening xml schema

I am writing a transformation to "flatten" the xml schema and for this purpose I am copying the referenced elements (for now only by attribute type on elements). The transformation itself "is working" as can be seen below. However when I try to use the select

select="//node()[./@name = $localname]"

in variable, the variable is not correctly set and oxygen XML Editor shows it in debug as empty, and it looks like the error is in the definition of variable $localname, however I do not know what it is concrectly :( When I use the select this way:

select="//node()[./@name = 'someRealValue']"

Then the variable is set up correctly, and on the output is nothing changed.

Can anybody suggest solution or what's wrong with the variable or xpath? Thanks in advance!

I have this input xml (shortened)

<?xml version="1.0" encoding="UTF-8"?>
<schema xmlns="http://ift.tt/tphNwY"
xmlns:tst="http://www.test1.test"
targetNamespace="http://www.test1.test"
elementFormDefault="qualified" attributeFormDefault="unqualified">
<simpleType name="ClaimCategoryId">
    <restriction base="string"/>
</simpleType>
<simpleType name="StatusCategoryId">
    <restriction base="string"/>
</simpleType>

<complexType name="StatusCategory">
    <sequence>
        <element name="statusCategoryId" type="tst:StatusCategoryId"/>
        <element name="nameEN" type="string"/>
        <element name="nameCZ" type="string"/>
        <element name="claimCategoryId" type="tst:ClaimCategoryId"/>
    </sequence>
</complexType>

<complexType name="StatusCategoryCollection">
    <sequence>
        <element name="statusCategoryInstance" type="tst:StatusCategory"
minOccurs="0" maxOccurs="unbounded"/>
    </sequence>
</complexType>

</schema>

And this transformation:

<xsl:function name="pk:childsHasType">
    <xsl:param name="this"/>
    <xsl:variable name="testX" select="substring-before($this/@type,':')"/>
    <xsl:choose>
        <xsl:when test="$this/*">
            <xsl:for-each select="$this/*">
                <xsl:value-of select="concat($testX != $var/namespace[ns=$defaultSchemaNS]/prefix,string-join(pk:childsHasType(.),'|'))"/>
            </xsl:for-each>
        </xsl:when>
        <xsl:otherwise>
            <xsl:value-of select="$testX != $var/namespace[ns=$defaultSchemaNS]/prefix"/>
        </xsl:otherwise>
    </xsl:choose>

</xsl:function>


<xsl:variable name="defaultSchemaNS" select="'http://ift.tt/tphNwY'"/>


<xsl:template match="xs:element">
    <xsl:variable name="test" select="substring-before(@type,':')"/>
    <xsl:variable name="differentTypeTest" select="string-join(pk:childsHasType(.), ', ')"/>
    <xsl:choose>
        <xsl:when test="contains($differentTypeTest,'true')">
            <xsl:variable name="localname" select="substring-after(@type,':')"/>
            <xsl:element name="element" namespace="{$var/namespace[prefix=$test]/ns}">
                <xsl:copy-of select="@*[name()!='type']"/>
                <xsl:text>&#10;</xsl:text>
                <xsl:copy-of select="//node()[./@name = $localname]"/>
                <xsl:text>&#10;</xsl:text>
                <xsl:apply-templates select="child::node()"/>
            </xsl:element>
        </xsl:when>
        <xsl:otherwise>
            <xsl:copy-of select="."/>
        </xsl:otherwise>
    </xsl:choose>
</xsl:template>

<xsl:template match="xs:complexType">
    <xsl:variable name="test" select="substring-before(@type,':')"/>
    <xsl:variable name="differentTypeTest" select="string-join(pk:childsHasType(.), ', ')"/>
    <xsl:choose>
        <xsl:when test="contains($differentTypeTest,'true')">
            <xsl:variable name="localname" select="substring-after(@type,':')"/>
            <xsl:element name="complexType" namespace="{$var/namespace[prefix=$test]/ns}">
                <xsl:copy-of select="@*[name()!='type']"/>
                <xsl:text>&#10;</xsl:text>
                <xsl:copy-of select="//node()[./@name = $localname]"/>
                <xsl:text>&#10;</xsl:text>
                <xsl:apply-templates select="child::node()"/>
                <!--<xsl:copy-of select="child::*"/>-->
            </xsl:element>
        </xsl:when>
        <xsl:otherwise>
            <xsl:copy-of select="."/>
        </xsl:otherwise>
    </xsl:choose>
</xsl:template>

And this is the output

<?xml version="1.0" encoding="UTF-8"?>
<schema xmlns="http://ift.tt/tphNwY">
<complexType name="StatusCategory">
    <element xmlns="http://ift.tt/1lrf87m" name="statusCategoryId">
        <simpleType xmlns="http://ift.tt/tphNwY" xmlns:rturdt="http://ift.tt/1lrf87m" name="StatusCategoryId">
            <restriction base="string"/>
        </simpleType>
    </element>
    <element xmlns:rturdt="http://ift.tt/1lrf87m" name="nameEN" type="string"/>
    <element xmlns:rturdt="http://ift.tt/1lrf87m" name="nameCZ" type="string"/>
    <element xmlns="http://ift.tt/1lrf87m" name="claimCategoryId">
        <simpleType xmlns="http://ift.tt/tphNwY" xmlns:rturdt="http://ift.tt/1lrf87m" name="ClaimCategoryId">
            <restriction base="string"/>
        </simpleType>
    </element>
</complexType>
<complexType name="StatusCategoryCollection">
    <element xmlns="http://ift.tt/1lrf87m" name="statusCategoryInstance" minOccurs="0" maxOccurs="unbounded">
        <complexType xmlns="http://ift.tt/tphNwY" xmlns:rturdt="http://ift.tt/1lrf87m" name="StatusCategory">
            <sequence>
                <element name="statusCategoryId" type="rturdt:StatusCategoryId"/>
                <element name="nameEN" type="string"/>
                <element name="nameCZ" type="string"/>
                <element name="claimCategoryId" type="rturdt:ClaimCategoryId"/>
            </sequence>
        </complexType>
    </element>
</complexType>
</schema>