The SML spec defines an XML output format for schematron rules
http://www.w3.org/TR/2007/WD-sml-20070926/#Structured_XML_Output_from_Schematron_Rules
There were two bugzilla defects opened against this part of the spec:
Defect 4807 was opened to clarify the usage of the structured output.
Later on bug 4647 was opened asking if the smlerr:output is really necessary, especially since schematron has a reporting mechanism that looks quite similar with this. http://www.dpawson.co.uk/schematron/running.html
The two defects have been morphed into one with the same proposal, which is to remove this section from the spec.
I took the action item to investigate the schematron output section from the SML spec and identify the scenarios that this section was intended to address.
The structured XML output was defined to enable variable substitution support for localized messages, with the assumption that variable substitution cannot be achieved any other way.
In the proposal I submitted for http://www.w3.org/Bugs/Public/show_bug.cgi?id=4772 , (see http://lists.w3.org/Archives/Public/public-sml/2007Nov/0195.html) I show that there is possible to have variable substitution support by just using xsl:variable. As a result, I think this structured output is not necessary and can be removed from the spec.