These settings define what elements are suggested by the content assistant in addition to the XSL ones.
The XSL preferences panel is opened from menu → +Editor+Content Completion+XSL
The Content Completion will offer only the XSL information.
Includes XHTML Transitional elements as substitutes for xsl:element.
Includes Formating Objects elements as substitutes for xsl:element.
Includes elements from a DTD file, a XML Schema file or a RNG Schema file specified from a URL as substitutes for xsl:element.