The Mapper is just a GUI developer tool for producing XSLT. It uses schema properties, links and functoids to generate XSLT. You can see this if you do a Validate Map and check the output files.
The inline XSLT functoid just dumps your XSLT into the compiled XSLT, Because you cannot pass parameters to inline XSLT there is no point in having an input link. The output link is required so the compiler knows where to place your XSLT in the output.
Greg