I don’t think this is right. XHTML guarantees well-formedness (matched closing tags et al) but doesn’t do anything for validity. It’s not semantically valid for <td> to be a direct child of <table>, so the user agent has to make the call as to what to display regardless of the (X)HTML flavor. The alternative is parsing failure on improperly nested HTML which I don’t think is desirable.
> The alternative is parsing failure on improperly nested HTML which I don’t think is desirable.
It was that decision that resulted in the current mess. Browser vendors could have given us a grace period to fix HTML that didn't validate against the schema. Instead they said "there is no schema"