It seems Microsoft have still not fixed this one. When using a XML Transform shape in a Logic App, the output XML always contains the XML declaration and the action shape ignores the omit-xml-declaration=”yes” attribute that is set in the XSLT:
<xsl:output omit-xml-declaration=”yes” method=”xml” version=”1.0″ />
See: Remove XML Declaration in XML Transform (microsoft.com)
And: Azure Integration Account XSLT – omit-xml-declaration – Connected Pawns (connected-pawns.com)