Resolution:
BW can read and parse XML 1.1 files, but it will handle and process it in XML 1.0 format. When encountering invalid characters (valid in XML version 1.1, but invalid in 1.0, such as “0x08”), BW mangles the data into something like <?tibco-char …?> internally.

If using XML 1.1, handle the XML 1.0 output and convert it to XML 1.1  for those invalid characters. The work around is to, use Java code to convert the XML version and “tibco-char” to the correct version and character, before xmlString is provided to other resources.

Attach is a simple example, (Filename:simpleTest.zip).