Yes xml is a bit complex to get it the first few times but once figured out it's just a way to too the sim to look for auxiliary folders-wherever they are for the sim to fire up when it's started.
Same as adding references to the SIM's cfg files that are located in the sims C:\ProgramData folder. They work the exact same way. Simply they just point to additional paths for the sim to load.
I use xml for some stuff as well as use the sim cfg files to set up all the paths for my add-on pieces from scenery to simobjects to effects, gauges, sound, world alt/afcads/adex files, ai traffic files which are normally steered to scenery-world-scenery, but they don't have to go there at all but all reside outside the sim.
It's easy to run one or more add-ons drives and simply add these path locations via add-on.xml files for each or by using the sim cfg files.. and easy to build as many paths as you want, and it will load every time.. or turn them off and they won't.. And the sim root files aren't touched at all.
"They" made a big deal out of the xml "doing it the correct way" they say, but it's really not necessary at all and the xml are way more complex than they ever needed to be.. just my opinion.. and I use both xml for some stuff as well as cfg files for other stuff.
So true- no add-ons have to be in the sim root at all except the Default SIM files: except for a few exceptions.. IE: ORBX but they are trying/starting to go outside the sim too.
Yup many Devs/vendors are on completely different methods on how to setup stuff and their installs.. ORBX has done just one airport scenery that can use xml to set it up. But the rest of the Orbx stuff still goes into the root sim and overwrites everything like a few other devs do IE: REX, Aerosoft, etc. etc etc etc
One day all might be on the same plain! (In the mean time, I custom install each add-on piece to where I want it and just set the locations via xml or by sim cfg). (I find there is actually more control of scenery order and layering via the Scenery.cfg and FTX Central insertion points than via xml files but both do work).
Long winded - but still to stay- there is lots of way to skin this cat - none are wrong and if done correctly all work perfect!