I expect from the parser to parse wiki markup before
parsing html tags […]
As I said. As neither the wiki markup nor the XML tags in the given
example are valid, one can't expect anything. Seriously. Code like
<ref>{{cite|</ref>}} is just broken. It's like having two nested Klein
bottles. Both structural elements are inside and outside the same
time.
What do you even want to achieve?
Best
Thiemo