Considerations in creating multiple page sequences
One problem with modifying page sequences is that fo:page-sequences cannot contain other fo:page-sequences. The XSL that creates the FO output must chunk the content and organize the chunks as peers at the level where the chunks will be divided into fo:page-sequences.
If your chunks are chapters, they are probably already peers. Inside the chapters, the organization of elements can remain the same. The chapter chunks need to be wrapped in their own fo:page-sequence elements.
Another issue in creating multiple page sequences is that each fo:page-sequence forces the start of a new page. This is probably not an issue if you divide a book into one fo:page-sequence per chapter, but putting very short sections inside separate fo:page-sequences would lead to a lot of empty paper.
Creating a sequential set of output based on a hierarchically ordered set of inputs might suggest that there would be a change in formatting. Formatting issues are not a problem when applying this approach to the DITA Open Toolkit (OT). The division of page sequences does not affect numbering streams because those streams are dependent on the organization of the input document—not the output document. Cross-references are typically based on positions in the input document; placement in separate page sequences does not affect the resolution of fo:internal-destination elements in the output document.
If indentations for elements at different levels in the hierarchy are always relative to the page margin, the indentation is not dependent on the relationship of child blocks to parent blocks in the output. The relationship of these blocks can be altered without changing the physical indentation.
This kind of relationship turns out, in fact, to be the case for the DITA OT. No changes to indentations are required in the DITA OT for this solution. For other implementations, you may need to adjust formatting so indentation is not dependent on the hierarchical relationships of blocks in the output.
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XML document structure
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fo:page-sequences