The XML thing affects the unpacker engines that are used. ALL files (regardless of their extensions) are feeded to the engines, regardless of their extension. HOWEVER, the Standard Shield of course only hands to the engines files with the extensions in the list.
In other words, if there's TXT in the extension list, and there's a file.txt that is in fact a ZIP, it will be decompressed. However if there is file.zip and ZIP is not in the extension list, it will not be decompressed?
Capisce?