When the labeled section is located inside a template call, you can't transclude it.
Example on PageX: {{green|<section begin="foo"/>bar<section end="foo"/>}}
Then {{#lst:PageX|foo}} doesn't show anything.
This is a bit of a bummer when the text you want to transclude in wrapped in a formatting template.
Version: unspecified
Severity: normal
Yeah, that's an annoying issue. I've made a patch 1.5 years ago, but it brought down Wikisource when it was deployed (parsing took too long). Please see https://bugzilla.wikimedia.org/show_bug.cgi?id=21339 for more details.
Thanks, Merlijn. I saw that other bug report but I wasn't sure it was the same issue because in my case, I don't want to add the section tag inside the template, but inside the parameter. I figured someone more knowledgeable about this would mark as a duplicate if needed :)