Haha yes. Appendix C gave compatibility guidelines, but you are right that doesn’t actually result in documents that could be parsed by a parser that implemented SHORTTAG NET.
Elsewhere in the thread, I posted an example of SHORTTAG NET being removed from a browser to enable parsing of XHTML documents:
https://github.com/emacsmirror/w3/commit/68af7c107dcbe194e30...
Nevertheless, the text/html RFC explicitly condones Appendix C, so despite it not being fully reflective of reality, it’s still permissible to use text/html to label XHTML 1.0 documents that follow Appendix C :D