Today, a command like:
echo '<xml>Working</xml>' | gzip | xmlstarlet sel -t -v /xml -nl
works fine and is depended on by users. However, the transparent decompression in libxml2 that this relies on is deprecated, is now disabled by default and will likely be completely removed in the future: https://gitlab.gnome.org/GNOME/libxml2/-/issues/848#note_2333727
To maintain this feature in the future, xmlstarlet will need to perform the decompression itself. If this is not going to happen, it would be nice to have a statement that this feature will be dropped so users can work around it.