SD polyfill nested content distribution failure

gistfile1.txt

<!-- <script src="http://polymer-project.org/polymer.min.js"></script> -->
<script src="../../../polymer/polymer.js"></script>
  
  <template>
    <h1>Foo</h1>
    <div> <div><content></content></div></div>
  </template>

  <template id="two">
    <h1>Bar</h1>
    <div>
      <content></content>
    </div>
  </template>

<x-foo>
  <p>Nested content</p>
</x-foo>
<x-bar>
  <p>Content</p>
</x-bar>

<script>
  document.addEventListener('DOMContentLoaded', function() {
    var xfoo = document.querySelector('x-foo');
    var dom = document.querySelector('template').content.cloneNode(true);
    xfoo.createShadowRoot().appendChild(dom);
  
    var xbar = document.querySelector('x-bar');
    dom = document.querySelector('template#two').content.cloneNode(true);
    xbar.createShadowRoot().appendChild(dom);
  });  
</script>