Perhaps I am crazy, but I am merely asking about a practice that is already in place where I have just started a new job.

Perhaps you mean "they" are crazy. Actually, I might be able to agree with that statement, but it would be out of the scope of any engineering approach to answering this question. Perhaps, by 'you are ... crazy', you simply mean 'not me' (from your point of view, of course). If, by 'you' you simply mean "someone other than myself", then OK, that's, well, odd, and random, but we can go on with part of this discussion that actually addresses the real problem.

Anyway, will I still be crazy (by your definition) if I gather the following from what you say?

To wit:

That the practice in place here of using binary data inline in XML is unusual and deprecated or at least that my new coworkers have probably implemented a system that offends Tim Bray.

That it is not likely remedied by use of <![CDATA...>.

That in effect, hex encoding is the only way to use XML::Twig.

and

that maybe I ought to use HTML::TreeBuilder::XPath, or some other such library that does not kill itself when it sees XML that does not strictly conform to the standard?