This tagged template for HTML literals works in all modern browsers and Deno

deno-or-browser-tagged-html-template-function.js

if ('Deno' in globalThis) {
  globalThis.DOMParser = (await import('https://deno.land/x/deno_dom/deno-dom-wasm.ts')).DOMParser
}

function html(taggedTemplateString = [''], ...expressions) {
  const nodes = []
  const functions = new Map
  const strings = typeof taggedTemplateString === 'string'
    ? [taggedTemplateString]
    : taggedTemplateString

  function stringify(object = '') {
    // Null
    if (object === null) {
      return ''
    }

    // String
    if (typeof object === 'string') {
      return object
    }

    // Array
    if (Array.isArray(object)) {
      return object.map(stringify).join('')
    }

    // Non-Array Iterables: e.g. NodeList, HTMLCollection, Set, etc.
    if (object[Symbol.iterator]) {
      return stringify([Array.from(object)])
    }

    // Document, DocumentFragment
    if ([Document, DocumentFragment].some(type => object instanceof type)) {
      return Array.from(object.childNodes).reduce(
        (slots, child) => {
          nodes.push(child)

          return slots += `<template data-dom-slot="${nodes.length - 1}"></template>`
        },
        ''
      )
    }

    // All other DOM node types: e.g. #text, #comment, Element, etc.
    if (object instanceof Node) {
      nodes.push(object)

      return `<template data-dom-slot="${nodes.length - 1}"></template>`
    }

    // Functions (for use with on:* attributes)
    if (typeof object === 'function') {
      const name = `--function-reference-${functions.size}`
      functions.set(name, object)

      return name
    }

    // Otherwise stringify anything else yourself, where you interpolate it, before gets here
    return String(object)
  }

  // Parse a string of text as a fragment of an HTML Document
  const fragment = new DOMParser().parseFromString(
    strings.reduce((markup, string, index) =>
      markup + stringify(expressions[index - 1]) + string
    ),
    'text/html'
  ).body

  // Replace any DOM nodes with stored nodes
  if (nodes.length) {
    fragment.querySelectorAll('template[data-dom-slot]').forEach(tag =>
      tag.replaceWith(nodes[tag.dataset.domSlot])
    )
  }

  // Replace any on:* attribute event handlers
  if (functions.size) {
    fragment.querySelectorAll('*').forEach(node => {
      const onAttributes = Array.from(node.attributes).filter(({name}) =>
        name.startsWith('on:')
      )

      if (onAttributes.length) {
        onAttributes.forEach(({name, value}) => {
          node.addEventListener(
            name.replace(/^on:/, '').toLowerCase(),
            functions.get(value)
          )

          node.removeAttribute(name)
        })
      }
    })
  }

  return fragment
}

console.log(
  Array.from(
    html`one<p><b>two<p>three`.childNodes,
    ({outerHTML, data}) => outerHTML ?? data
  ).join('')
)