As noted before, you should be using either twig_roots/twig_print_outside_roots OR print at the end of the processing.

I'll try to explain:

You use twig_roots/twig_print_outside_roots to write filters: anything you are not interested in is output as you parse the document. The elements you are interested in are processed in the handler. But then you have to output them, once processed, at the end of the handler. Then they are output at the proper time. So in your exemple you would have a $body->print at the end of insert_form_tags(), and you would remove the $xml->print at the end of your main code.

OTOH, if your documents are small (ie likely to fit in memory), then there is really no need to use twig_roots/twig_print_outside_roots. You can either load the entire document in memory and then go from here (the body would be $xml->root->first->child( 'body') or $xml->first_elt( 'body')), or use twig_handlers to process elements "in place" during the parsing and then output the entire document in the end (you can also use this mode and then flush the twig at the end of the handler and then again at the end of the parsing if memory is an issue).

Does this make sense? If yes I will probably add this to the FAQ.