Description:
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XSLTProcessor::setParameter() does not currently allow values that contain both single quotes and double quotes. This appears to be intentional, as per php_xsl_xslt_string_to_xpathexpr() located in ext/xsl/xsltprocessor.c line 119.
(https://github.com/php/php-src/blob/master/ext/xsl/xsltprocessor.c#L119)

This shortcoming comes from the fact that XPath 1.0 does not provide a mechanism to escape characters, so PHP does not have a straightforward way to express a string that contains both types of quotes. XPath 1.0 does, however, provide a function to concatenate strings. Using concat(), a string composed of the two characters "' can be expressed as concat('"',"'"). concat() takes 2 or more arguments so as long as you alternate the quoting style, you can express a string containing any number of quotes of both types.

This is the proposed change: use XPath's concat() function to express strings that contain both types of quotes.

Test script:
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<?php

$xml = new DOMDocument;
$xml->loadXML('<X/>');

$xsl = new DOMDocument;
$xsl->loadXML('<xsl:stylesheet version="1.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform"><xsl:output method="text"/><xsl:param name="foo"/><xsl:template match="/"><xsl:value-of select="$foo"/></xsl:template></xsl:stylesheet>');

$xslt = new XSLTProcessor;
$xslt->importStylesheet($xsl);
$xslt->setParameter('', 'foo', "\"'");

echo $xslt->transformToXml($xml);

Expected result:
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"'

Actual result:
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PHP Warning:  XSLTProcessor::transformToXml(): Cannot create XPath expression (string contains both quote and double-quotes) in %s on line %d