The IRS thing indirectly has categories but it doesn't say what to do with them, and what to do with them is what I disagreed with your original post on. I didn't say all input is untrusted or whatever analogizes to your tax thing.
Anyway, I see you edited your previous post after I wrote my reply.
If you weren't trying to divide things into two categories, you wrote it very confusingly. When you say how to handle trusted strings, then say how to handle untrusted strings, then say "There's no getting around knowing whether or any arbitrary string is legitimate markup from a trusted source or some untrusted input that needs to be treated like text. This is a hard requirement." it really sounds like that's supposed that's supposed to cover all cases.
Me thinking you were using two categories is an honest mistake, not malicious misquoting.
And reading your original post that way is the interpretation that makes it stronger. If there are more categories then SetHTML is no longer "fundamentally confused". Your argument against it falls apart.
Guess how interested I am in pretending that a debate with you—about this or anything else—is worthwhile (or anything, really, other than an even bigger waste of time than it already has been).