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think about where the VREG and VREF currents are coming from. It's just a portion of the 4mA output current of XTR116. So if the XTR116 draws a supply current of 300µA, then 4mA - 300µA = 3.7mA maximum can be delivered by VREG and VREF in total. Assume VREG is delivering 2.7mA, then VREF can only deliver 3.7mA - 2.7mA = 1mA maximum.
So the simple answer is: No, in normal operation the VREG pin of XTR116 cannot deliver 10mA.
Page 4 of the XTR116 datasheet shows the regulator voltage vs current, VREG is able to source 4mA and sink 1mA; and the VREF precision is specified for a 0mA to 2.5mA current load in the specifications table on page 2.
As Kai has correctly stated, it is important to highlight that the total current consumption must be less than 4mA to achieve the complete 2-wire current transmitter output range of 4-20mA. This includes the total current consumption of the XTR116, sensor, and associated circuitry.
