Why is the Replace function is not working in xslt 2.0

Replace function is not working in xslt 2.0

xslt looks like this:

<xsl:stylesheet version='2.0'
    xmlns:xsl='http://ift.tt/tCZ8VR'>

<xsl:output
       method="xml"
       encoding="utf-8"
       media-type="application/xml"
  />
  <xsl:template match='/'>

    <items>
         <xsl:apply-templates select="response/result/doc"/>
    </items>

  </xsl:template>

  <!-- search results xslt -->
  <xsl:template match="doc">

<xsl:variable name="ShortDescription" select="str[@name = 'ShortDescription']"/>

<shortdescription><xsl:value-of select="replace($ShortDescription, '&amp;amp;', '&amp;')" disable-output-escaping="yes"/></shortdescription>

</xsl:template>

</xsl:stylesheet>

When we use replace function we get this error:

Please give me an idea of how to handle this replace function in xslt 2.0

Thanks in advance