XML was genuinely better than fix-width data formats (COBOL) or character-separated fields (CSV, HL7) for most APIs. Hierarchical deeply nested trees of data were the future. Everyone uses JSON or a more industrial format like protobuf/avro/BSON to represent such data now, but it wasn't necessarily wrong to point at XML and say it was an improvement.
The problem with XML is precisely that it is so much more than simple hierarchical, nested trees of data. The fact that in a casual conversation XML is reduced to hierarchical trees of data pretending the rest of XML does not exist more than proves OP's point.
I'm not pretending anything and I hate XML. I would still rather use it than HL7, because it's a hierarchical tree of data and HL7 is not. OP's point is that almost nobody wants to use XML anymore; my point is that almost nobody wants a Ford Model T as their daily driver anymore either, and yet it was still the future, in a certain sense.
XML is so much more than hierarchical data serialization format. In a typical conversation XML generally means "JSON-compatible subset of XML" as if the other parts do not even exist. Like in the meme "Javascript vs Javascript the good parts".
XML never really took off, only the parts that make up "different flavor of JSON".
I quite like FHIR. My experience with using it has been that everyone seems to implement it slightly differently, but it does a better job at being human-readable. It was much easier for us and our partners to work with than regular HL7.
Some things were a bit weird. From memory it had big lists of records all mixed together as the implementation of references.
