The spaces in the output are produced by the spaces between the tags (\xmlstrip doesn’t seem to work)
and you have to use a combination of \removeunwantedspaces and \ignorespaces to remove them.
It is a pity if \xmlstrip does not work. It is of course fairly essential that the whitespace between the tags can be ignored. I sincerely hope this will be looked into. Or could this be a special effect related to either the use of a buffer as
source or to the embeddedxtable structure?
However, it doesn't seem the whole story. I removed all whitespace between the tags and the \unskip's from the code. In the result below you can see that removing the whitespace between the tags removes most of the spurious spaces, but not all
of them. Another picture has the = embedded before the \xmlflush in \startrow and shows that still spurious space is injected. To me it looks if every row gets an extra space: three of them before the table and the last one after the table (but here I am guessing).