The thing is, it was never really intended as a storage format for plain data. It’s a markup language, so you’re supposed to use it for describing complex documents, like it’s used in HTML for example. It was just readily available as a library in many programming languages when not much else was, so it got abused for data storage a lot.
I have actually seen it in an XML file in the wild. Never quite understood why they did it. Anything they encoded into there, they could have just added a node for.
But it was an XML format that was widely used in a big company, so presumably somewhere someone wrote a shitty XML parser that can’t deal with additional nodes. Or they were just scared of touching the existing structure, I don’t know.