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Hit same issue 1 week ago, thought I would update with my findings.

Found that MS had released an update to the package https://github.com/microsoft/azure-pipelines-tasks/commit/bcbc0c9f3367ce02cbb916695b0aae75cf41d4f2

This now expects a new parameter enableXmlTransform, setting this to false works.

- task: FileTransform@2
  displayName: "Transform Json"
  inputs:
      folderPath: '$(System.DefaultWorkingDirectory)/**/'
      enableXmlTransform: false
      jsonTargetFiles: '**/angular.json'