The gist is that XML is best used for markup, because it inherits assumptions from the "document" metaphor that are not needed and are sometimes unhelpful for data interchange. An example of this is hashmaps & sets--they intentionally leave "order" or "sequence" out of their representation, but documents as a form of data interchange force you to keep thinking about it.
Funny enough, the one thing XMPP does not use xml for is markup! See
https://xmpp.org/extensions/xep-0393.html - an ad hoc markup format
https://xmpp.org/extensions/xep-0394.html - a laughably perverse usage of the already perverse XML format I don't know why they did this but I guess they had reasons - perhaps XML doesn't actually do that well even for markups
Once upon a time, we had XHTML-IM https://xmpp.org/extensions/xep-0071.html
But then web developers came along and just put this directly into the DOM of their web clients, leading to endless XXS exploits, so XEP-0071 was burned at the stake.
XEP-0393 might look ad-hoc, but it's essentially what people were typing into their chats and emails since time immemorial.
People sometimes think this is Markdown and then pick a markdown library off the shelf and then the HTML passtrough bites them, leading us back to the beginning.
I really don't understand how Matrix and Mastodon etc are allowed to pass around HTML embedded in JSON as if that somehow solves all those problems.
Maybe one day xhtml-im will make a glorious return as a 2.0, with bigger, better and scarier warnings about sanitizing your inputs