indenting identity

Why does...

<?xml version="1.0"?>
<xsl:transform xmlns:xsl="http://www.w3.org/1999/XSL/Transform" version="1.0">
<xsl:output method="xml" indent="yes"/>

<!-- IDENTITY copy, using nodes -->
<xsl:template match="node()|@*">
   <xsl:copy>
      <xsl:apply-templates select="node()|@*" />
   </xsl:copy>
</xsl:template>

indent and

<?xml version="1.0"?>
<xsl:transform xmlns:xsl="http://www.w3.org/1999/XSL/Transform" version="1.0">
<xsl:output method="xml" indent="yes"/>

<!-- IDENTITY copy, using elements -->
<xsl:template match="*|@*">
   <xsl:copy>
      <xsl:apply-templates select="*|@*" />
   </xsl:copy>
</xsl:template>

not?

I know that one is a node and the other is an element... but is there a way to 
maintain indentation when copying elements?

Carl


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